Pricing and Retail Strategy Retailers rely on product positioning to bolster the value of their products. Determining product positioning requires the analysis of target customers, the market competition, the definition of competitive advantages, and the communications needed to deliver the chosen position to the consumer. Kohl’s is an example of a department store that has successfully deployed a pricing a retail strategy, which evaluates and incorporates price, place, product, and promotion. Pricing and Retail Strategy Kohl’s is best known for their promotion strategies. The company uses nearly every promotional tactic simultaneously. Direct mail coupons, electronic coupons, rewards programs, incentive programs are all part of Kohl’s everyday promotions. Additionally, they advertise with fliers in newspapers as well as online. A mobile application is also available for …show more content…
the store to tie all of those offers together for consumers as well. Furthermore, Kohl’s promotes their own store brands even more heavily than the popular brands. (Kohl's Corporation, n.d.) Kohl’s differentiates itself through the sale of private labels, or store brands. They collaborate with celebrities such as Jennifer Lopez, Vera Wang, and Lauren Conrad on co-brands. These special, exclusive to Kohl’s, brands incorporate the needed product mix to pull in the largest possible customer base. (Wahba, 2014) The perceived value of a product is, in part, set by the established price of the product. There is a direct, and proportionate, correlation between the perception of quality and pricing. (Shankar & Bolton, 2004, p.45) A 2008 study found that pricing is not the only component that requires attention. Researchers traditionally suggest using pricing strategies as a means to optimize decision making, but our analysis reveals that considering just this single element in the overall retail strategy may mask the impact of a closely related issue, that is, the formatting strategy. (Gauri, Trivedi & Grewal, 2008. P. 267). Kohl’s specifically chooses new brick and mortar locations that they are familiar with based on existing locations in adjacent cities or towns. Additionally, they provide for online sales through a store website in order to be readily available at any hour to consumers. Also, the online presence opens the door for those who do not have a location nearby. Kohl’s has put a great deal of thought and effort into their formatting strategy and positioned its products to be available away from their competitors located in malls. (Kohl's Corporation, n.d.) Competitive Strategy Not only does the company use its physical location to compete, Kohl’s also takes a leadership role in price setting among its competitors. Competitors like Peebles then follow with the Kohl’s price in mind. (Yan, 2009, p. 230) In order to compete with the competition online, Kohl’s offers a wider variety of merchandise than what is available in the brick and mortar stores. Additionally, the internet prices vary from those in the retail store. Situation Analysis Kohl’s strengths include a positive customer service experience and provide numerous savings opportunities.
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,
2014) Conclusion Marketing Mix at Kohl’s is one of the best in the industry. They actively seek to understand their position and react to of all elements of their retail strategy. They strategically market and price their products to create value and reach their target market. Kohl’s makes every effort to produce a pricing and retail strategy that effectively evolves along with their consumers.
According to Kantar Retail, most of Target’s shoppers are younger on average than its rivals, and more educated. That means it has to consistently offer something different and appealing; it emphasizes more on the latest-trend apparel, eye-catching home décor and exclusive designer merchandise than its competitors. This results in a willingness to pay a bit more for items by customers who are willing to pay a bit more. Moreover, this successful
JCPenney is a chain of American mid-range department stores that is based out of Texas that started over 100 years ago. JCPenny has been successful for most of its time up until the last three to four years. The company is trying relentlessly to overcome the lingering effects of the makeover that former CEO, Ron Johnson, had implemented in order for the company to take a new direction in hopes of increasing sales. The new CEO, Myron Ullman, has taken a close look into the markets demographic segmentation along with the income segmentation in order to attempt to return the retailer back to its old self, which is to appeal to middle-market customers. A couple issues of major concern for the company are the dissolving of Johnson’s Boutiques, the price of their products, and overall revenue.
Nordstrom’s retail positioning strategy provides it with the competitive edge it needs to differentiate it from competitors who also serve similar markets.
According to Alvin J. Silk, a positioning statement is designed to define who are a company’s customers, what set of needs does the product fulfill, and why is the product the best one to fill those needs (2006, p. 90). I found this question challenging because a positioning statement should define “the place the firm wishes to occupy in its’ targe...
Recommendations to achieve a sustained competitive advantage: Online, mobile, and store purchase will certainly increase customer traffic with the online and store combinations gives Target Corporation with a best possible low-cost price. A best-cost provider strategy allows Target to position itself and compete with low-cost providers such as Walmart. In addition, it employs a competitive strategy with a designer label along with superior supply chain, increased operational capabilities, and skilled employees. . The strategy of sending coupons are huge for a customer, so increase discount based on their purchase history and use the store brand credit card to attract more customers.
The positioning strategy that I think would be advantageous is using the marketing mix tools effectively. I think having an integrated and coordinated strategy for product, price, place, and promotion. Marketers can use this to maximize customers’ experiences and complete their process of positioning by outshining customer’s expectations in each area that is prominent to them. Fashion consumers want to change and seek what is new and exciting. A certain fashion doesn’t remain popular forever, so marketers need to anticipate and prepare for changes in consumer tastes.
It’s no surprise that lawsuits have been filed against some of these major retailer stores, but what is surprising is the outcome of some recent ones. Since 2000s there have been a number of litigations brought against Kohls with regards to the way they promote their pricing. However, until recently, most of these cases have been dismissed. In a California lawsuit filed in 2015 and in an article written by Rick Rommel of the Journal Sentinel, “Kohl's Corp., which routinely promotes its discounts off regular prices, has agreed to a $6.15 million settlement with California shoppers who alleged those discounts were false. A federal judge has preliminarily approved the settlement. Under its terms, Kohl's will offer gift cards to people who, beginning
Some core competencies that must be exploited are: Brand Kmart is an existing well-known and trusted national brand in USA Kmart has private label and designer clothing that is well endorsed Infrastructure Kmart has a large number of well-located, low-cost, leased stores in urban far away from competitors through out the country ( Appendix B ). Staffing Confidence by the market in Kmart is created by the achievements of its staff and management. With the turn-around strategy in place, new blood has been put into the top management structures. In any renewal there will be retrenchment as unprofitable stores are closed. This can be used as an opportunity to retain and move high performing staff to where they are needed and to get rid of non-performing staff. Anderson the chairperson of Kmart is well supported by Wall Street and the board of Directors. These new staff members enter the company with needed skills to address problems in certain areas that previously were poorly managed such as inventory control and merchandising. Store locations, layout and Performance Stores conveniently located away from competitors like Wal-mart and Target therefore less to compete for customers face-to-face. There are 250 non-performing stores who have already been identified as being more cost effective to close than continue with running costs. Expertise exists in-house for the planning of store layout and appearance to meet different customer segments. This concentration of effort will enable focus on key areas Technology Kmart has already invested in good retailing systems. The system can be use to control inventory, supplier payments, track customer buying and monitor income versus profit margins across all stores. Research and Development The planning department is well established and in cross-functional to provide various perspective. The planning department to ensure that strategies at all levels are executed can further use the access to past data and knowledge of changes in buying patterns. Financial Backing JP Morgan Chase has agreed to support Kmart to avert the current threat of closure due to bankruptcy.
Competitive Positioning is defined as how you will differentiate your products or services thereby creating a value for in the market. A good positioning is influenced by market profile, customer segments, competitive analysis and methods of delivering value. (Marketingmo, 2014)
When analyzing an organization’s target market, the first step is to understand the business and what they hope to achieve through their marketing strategies. Targeting and positioning strategies consist of analyzing and identifying segments within a given product-market, choosing which segment or segments to target, and developing and implementing a positioning strategy for each targeted segment (Cravens & Piercy, 2009). The company’s target market determines what customer group or groups the company wants to serve (Cravens & Piercy, 2009). Analyzing IKEA’s target market allows the company to determine if their marketing strategies have successfully targeted their intended customer group or groups. Discussing the company’s positioning strategy helps determine if the strategy is effective or if the company must make improvements strengthen their positioning strategy. The company must determine if their targeting and positioning strategies may be lacking. If the company’s targeting and positioning strategies are lacking, the company must determine what they must do to strengthen their targeting and positioning strategies.
Pricing is an important aspect of every business. Chief Financial Officer’s (CFO) use pricing to create financial projections, establish a break-even point, and calculate profit and loss margins (Power Point, 2005). It is the only element in the marketing mix that produces revenue. Price is also one of the most flexible elements of the marketing mix as it can be changed very quickly. This is usually done to beat competitor prices in an attempt to fix the product’s market value position very low (Anderson & Bailey, 1998). After all, high prices make it difficult to become the market share leader. The leading US retailer, Wal-Mart, is an expert at low product pricing as evident in 2004 with $250 billion dollars in sales to their 138 million weekly shoppers. However, they are also responsible for reducing prices so low that it drives specialty stores out of business. This is the effect Wal-mart has had on many toy stores and has almost closed the doors of the famous toy store Toys “R” Us Inc.
Market positioning is how a company wants their customers to perceive their product or service in relation to their competitors and what marketing strategies they should adopt to reach this perceptual goal. When developing a market position they select the most persuasive, meaningful and unique points of difference that will allow them to compete for the largest number of potential customers. Some companies develop a 'me too ' strategy and position themselves close to their competitors so prospects can make a direct comparison when they purchase. Other companies develop marketing strategies which position them well away from their competitors. Offering a benefit which is superior depends on the marketing mix strategy that each company uses.
In order to understand the context of what type of positioning a company can take as part of its competitive strategies this paper below will examine how Prada fits in to Porters’ concepts of generic strategies and competitive position as well as Treacy and Wie...
It includes activities such as communicate the features, benefits of the product and image to the actual and potential customers. Positioning is how to differentiate in the mind of the customers. Differentiation is defined as a company seeking to serve and creation of a different advantage or a competitive edge that will enable the firm to serve the target market more effectively than the competitor. Positioning means the activity of making position or image in the minds of customers. Positioning is the process of describing an image of company’s product and its customer relation in the minds of customers. Philip Kotler said “Positioning is the act of designing the company’s offering and image to occupy a distinct place in the target’s mind.” Image is the picture of an organization and its products and services perceived by target group. The types of image are Current Image: The way that a company is being seen by customers, Mirror Image: The way that a company thinks it is being seen by customers, and Wish Image: The way that a company would like to be seen by customers. The objectives of positioning are create a different place, development and redesign, appropriate action and reason of buying. Positioning involves three tasks. They are identifying differences, selecting the right differences and communicating. Product differentiation, people and image are identifying differences. Selecting the right differences are
Kohl’s provides a low cost structure by applying a concept of centralized buying, distribution, and advertising, which enables the retailer to pass on the savings to the consumer. Kohl’s is using the marketing slogan, “the more you know, the more you Kohl’s”; the retailer will continue to focus on the value of shopping at Kohl’s.