Scenario 5: Traditional Department Store A traditional department store chain is

Question

Scenario 5:

Traditional Department Store A traditional department store chain is facing greater competition from full-line discount stores, specialty stores, and Web-based retailers. This firm is especially concerned about the heightened vulnerability of its furniture department to competition from a variety of formats. It is worried about the effects of the low prices and immediate availability of goods at stores like Ikea, as well as the availability of in-home decorator services at independently-owned home furnishing stores.

The chain’s furniture is displayed in room settings. This format better enables shoppers to conceptualize what the furniture will look like in their homes. It also results in the sale of accessories such as lamps, paintings, and throw pillows.

Much of the chain’s furniture is moderately priced, well-designed, and available in a variety of fabrics and finishes. The chain relies on well-known manufacturers with excellent reputations for product quality, as well as delivery time commitments. Unlike many discounters, all of the chain’s furniture is available in a variety of sizes, fabrics, and finishes. Also, unlike Ikea or category killers such as Bed Bath and Beyond, the firm does not sell low-quality “ready-to-assemble” furniture.

To reduce price competition, the department store chain typically requires its suppliers to sell it exclusive merchandise. This often consists of a selection of unique fabrics, finishes, leg designs, and even sizes. In other cases, the firm requires that its vendors assign unique model numbers to its goods. Thus, a customer seeing a sofa in a department store would either be unable to purchase a comparable item at a lower price or have a difficult time locating the good.

The chain’s employees come from a variety of backgrounds. Some of its staff have either significant experience as interior decorators or have a flair for decorating. While others may be excellent salespeople, they have much less knowledge of fabrics and are less comfortable developing room arrangements or selecting coordinating or contrasting fabrics.

Although many specialty stores offer in-home interior decorating assistance, Web-based merchants and discounters do not provide this service. While the fee for these services vary, many specialty stores charge a fee of $100 to $200 per visit to confirm that the merchandise ordered is appropriate for one’s home. This fee may be waived if a purchase exceeds a given level (such as $2,500). The department store chain offers only in-storebased services (such as confirming that the sofa is the proper color based on viewing a fabric sample of a chair that the client owns).

Complete The Overall Strategy for the particular organization:

Overall Strategy Controllable variables

·What is the Location strategy?

Uncontrollable variables

· What is the Legal environment?

. What is the Technological environment?

. What is the Economic environment?

Overall Strategy. Overall, this section should provide detailed insight and description as to how the organization is going to reach its objectives. Controllable variables and strategic actions for the retailer should be detailed. Consider what opportunities among the 4P’s that the retailer can capitalize on to grow its business. Provide substantial detail to support your strategic recommendations. Uncontrollable variables should be analyzed for their potential impact on the retailer’s business decisions. Recommendations as to how the retailer can address uncontrollable variables are crucial.

Explanation / Answer

4P’s of marketing used in Retailer’s strategy – product, place, price and promotion

Retailers promote awareness and interest among their consumers about their goods and services.

4P’s

Four types of pricing strategies used by retailers like :

The controllable variable in formulating the strategy here are sales people skill, interior home assistance, experience level of employees.

The location strategy should be based on – nearness to the customer or potential market, or near to the raw material availability.

There are many uncontrollable variables like

Legal Environment – this decides the legality involved in dealing in a particular market.

Technological environment – the kind of technology a retailer is using in communicating the information from buyer to the ultimate customers, how quick is the adjustments made at the time of purchase like settlement of fees based on the quantity bought (such $ 2500).

Economic Environment – is related to the economic policy set by the government like how easy to get a loan for purchase, rate applicable at the time of credit purchase and so on.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.