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Outline chapter 7 market segmentation and target marketing
Outline chapter 7 market segmentation and target marketing
Market segmentation and its role in marketing
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When customers walk into a Nordstrom store, they know exactly what to expect. High quality products, clean displays, and helpful employees are just a few of the expectations that are met everyday in Nordstrom stores. Nordstrom created a proposition based off of high levels of customer service that keep customers coming back for more. The retail strategies that Nordstrom employs help differentiate itself from other stores while attracting more customers and building a strong competitive advantage. The positioning choices that Nordstrom employs help differentiate itself from its competitors. The biggest strategy that Nordstrom uses to differentiate itself is by providing exceptional customer service. Nordstrom prides itself by delivering consistently extraordinary customer …show more content…
service that creates positive store perceptions. They try to constantly exceed customer expectations to build their brand reputation and customer equity. Customers expect high quality service from Nordstrom employees, and when customer expectations are consistently met, customers give back value in the form of increased sales and store loyalty. Customer service helps differentiate Nordstrom from other retailers such as Target because Nordstrom wins over customers by offering greater customer value in the form of higher customer service, while other retailers such as Target offer greater customer value by offering cheaper prices with less service. Another retail positioning strategy that Nordstrom employs is providing high-end brands and products. Nordstrom differentiates itself by stocking higher quality name brand items on their shelves. This helps set Nordstrom apart from other retailers that sell lower-end merchandise. Nordstrom wants to represent itself as a luxury item retailer that provides high quality products for customers who value quality and high-end brands the most. The intention behind Nordstrom’s retail positioning strategies of providing higher quality customer service and merchandise is to capture value from customers who value those characteristics the most.
Nordstrom differentiated itself from other retail stores through its products and services. By providing more high-end and specialized merchandise, Nordstrom is able to attract more customers who value more luxurious brand-name goods. The quality of Nordstrom’s products separates it from other retailers who provide less quality and selection in their products. Nordstrom developed a competitive advantage by providing better quality products that justify a higher price by using a more-for-more value proposition where a higher price is charged for higher quality. Nordstrom’s strategy of providing excellent customer service also helps attract new customers through word-of-mouth advertising. Customers who go to Nordstrom stores and have a wonderful experience due to helpful well-trained employees will be likely to tell a friend about their experience and continue to shop at Nordstrom stores. This creates a competitive advantage by offering greater customer value through outstanding customer
service. Overall, Nordstrom creates value for their customers by combining remarkable customer service with high quality products. They were able to differentiate themselves from other retailers through their products and services to keep customers loyal to their company. Their differences in quality provide more value for customers, creating a clear competitive advantage for years to come.
Nordstrom and Nordstrom Rack are different retail operations in terms of their choice, pricing, store service, and store atmosphere customer intimate firms, which excel in serving the specific needs of the individual customer well. There is less emphasis on efficiency, which is sacrificed for giving more precisely what is wanted by the customer. Reliability is also stressed. Nordstrom is an example of this discipline. Nordstrom must meet some standards of cost-effectiveness. When customers evaluate the quality of a product, they commonly measure it against two kinds of attributes: those related to quality as excellence and those related to the quality of reliability. From a quality as excellence perspective, the important qualities are things such as a product’s design and styling, its aesthetic appeal, its features and functions, the level of service associated with the delivery of the product,
Macy’s intended to deliver enhanced shopping experiences to its consumers through dynamic department stores and online sites. In this regard, the company developed a North Star strategy that allows it to improve its sales growth and to develop its existing core activities. The company’s consumer research monitors, analyze and anticipate their needs and wants based on the changing market trends. This allows it to strengthen its customer base and also helps it in identifying new markets and customers. Macy’s also identifies different styles and designs based on various occasions and events that allow it to capture the changing preferences of its customers. The company also celebrates various iconic events to interact with its customers which
Kohl’s also boasts a loyal customer base and strong brand equity. These strengths are critical to offset their weaknesses. Flaws include an imbalance on sales for men’s products and a lacking online presence. (Kohl's Corporation, n.d.) Another way that Kohl’s is actively counterbalancing their negatives is by capitalizing on opportunities. Kohl’s has found that their beauty sections are an immense source of opportunity. As a result, the company is expanding those departments in an effort to capture those sales that would otherwise go elsewhere. (Wahba, 2014) Finally, Kohl’s keeps the knowledge of their threats at the forefront of their decision-making. They understand that their coupon system can be abused and cause profit losses. They also recognize that price wars in their industry can also be very damaging. As a result, they are working towards more secure methods of offering savings and strategically making efforts to remain the leader for price setting. (Wahba,
This nationally recognized mass merchandiser that stood as Kohl’s other leading adversary in the market has everyday low prices that were able to compete with Kohl’s promotional events. Wal-Mart also outdid their competition when it came to number of store locations around the country. The weaknesses of this reputable company come to light when shoppers are looking to buy clothes and are not presented with nearly the selection that the department store can offer. Also, their service is not considered to be as helpful as the department stores that can input more expertise when trying on
Target stores, inc.is a sister company of Dayton Hudson Corporation and started in the year 1962 the same year as two other large retail stores Wal-mart and Kmart. Target has always operated with the motto “ Expect More and Pay Less” target is the third in the big three in U.S. falling behind Wal-Mart and Kmart.a major part of target's success comes from its ability to bundle bargain prices with fashionable name brand merchandise with excellent customer service. Dayton’s department store started looking into Target as a discount chain in the year of 1962 when the company saw a rising in public demand for lower priced merchandise in a family friendly and convenient environment. The name target along with the bulls eye logo were selected for the company's visual impact also to show that target aims at offering
Present day Federated consists of both Bloomingdale’s and Macy’s stores and operates in 34 states as well as Guam and Puerto Rico. While Bloomingdale’s and Macy’s provide both private and national brands and are similar in merchandising categories (men’s, women’s and children’s apparel, home décor, shoes, beauty, and accessories), they differ greatly in culture. Bloomingdale’s, being more upscale, targets consumers that are more concerned with trend and quality than they are price. Macy’s targets the more value oriented consumer and represents a broader Federated clientele. Macy’s represents 423 of the 459 Federated locations while Bloomingdale’s represents only 36 locations. Because I can better relate to the value conscious consumer of the Macy’s division and because they represent such a large portion of Federated, I will further explore their current characteristics and behaviors that suggest that they possess qualities of both monopolistic competition and oligopolies.
Nordstrom retail stores have large hallways, and everything is presented in a very classy manner. The color scheme includes pale yellows, whites, and gold, to provide a more elegant appearance in the store in order to make the shopped feel special. The design is also seen through product organization. Compared to stores like Macy’s, which organize their products based on brand, Nordstrom organizes their products based on lifestyle. Because of this, it is easier for shoppers to find clothes similar to their style as opposed to by brand. In effect, shoppers will purchase more products. This also is a type of experiential retailing, where Nordstrom customers are able to experience the elements of their lifestyle within one section. More so, the product presentation will draw people’s eyes to products, even if they are not looking for it. This gives Nordstrom a competitive advantage in relation to other similar retail stores because it makes their store look more glamorous and high-end. While other stores may focus on value, Nordstrom utilizes the retail positioning strategy to make a customer feel more high-end and
Nordstrom is one of the top retailers in the United States. With a solid brand image and a sound financial situation, Nordstrom is relentless in their expansion in the US, and are beginning to expand into international markets. Nordstrom takes pleasure in providing state of the art client support and having experienced sales people. In order to hold their position as the most successful high-end retailer in the United States, Nordstrom must continue to figure out ways to improve their brand image and customer satisfaction. Nordstrom’s current business working strategy is successful but I believe there are a few ideal solutions that the organization could apply to further enhance the organization. Due to the aggressive characteristics of the fashion retail store market, it is crucial that Nordstrom preserves an aggressive advantage providing the highest level of customer support as possible.
Additionally, brand equity, the company’s reputation, and Best Buy’s internet presence and website are also valuable intangible resources. In fact, the article mentioned that Best Buy has the 11th largest e-commerce website worldwide. Best Buy’s core competency lies within the company’s focus towards “customer-centricity attained thorough the in-depth data analysis and systematic customer segmentation.” To restate that, Best Buy differentiates themselves from their competition by providing expert advice and service at prices that compete with competition.
Nordstrom segments are broken down into preference segments. There are three segments that Nordstrom has containing the following: homogeneous, diffused, and clustered. Homogeneous is a market with no natural segments. Diffused is a market with evenly distributed preferences with no concentration. Finally, a clustered market when natural segments exist and may be effectively targeted. Nordstrom’s segments focus on inside
The company had to be the second largest retailer shop in the US; it has many advantages that come along. The customers well acknowledge the company and its brand have been well established.
In general merchandise retailing, Wal-Mart’s primary competitors are Target and Kmart. Retail superstores such as Circuit City and Bed, Bath, and Beyond, also provide retail competition. A survey found that the majority of respondents favored Wal-Mart over stores like Target and Kmart. Respondents claimed Wal-Mart offered lower prices, better variety and selection, and good quality. The needs of consumers is an important economic feature in all competitive environments. What attributes (price, variety, quality, etc.) prompt buyers to choose one retailer over another is very important in the competitive landscape.
With Nordstrom, everything starts with the hiring process. Their hiring strategy is to recruit sales employees who are motivated, but also nice (Spector
A firm 's competitive advantage is achieved through offering customers a greater value, either by way of lower prices or by providing greater benefits and service that justifies a higher price. Nordstrom strengthens its competitive advantage and generic strategy through cost leadership and differentiation in order to differentiate themselves from other high end retailers. Nordstrom has consistently maintained a unique reputation from their establishment in 1901 to the today. Since developing a strong competitive advantage from inception, Nordstrom has been able to adapt to changing environments and market conditions to maintain their success. Nordstrom has set the bench mark in the retail sector through customer service and product quality.
Few companies create such controversy as Walmart has done with its approach to maintaining low costs for everyday items. People either love Walmart because of this approach to keeping prices down or hate it due to the effects it has on the economy. There are a lot of arguments surrounding the minimum wage and employee rights at Walmart. There seems to always be a news article about some employee protest about the wages or how they are treated. Walmart is viewed as an enormous firm that does not take care of its employees because of its minimum wage, treatment of its employees, and how it deals with lawsuits.