Date post: | 21-Oct-2014 |
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Business |
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A
CASE
PRESENTATION
ON
Presented to:
Prof. K. Ravindran Presented by:
Pranay RagabhagatDeepak R GoradMunaf ShaikhKalpesh BhasgareShrund kalseAmol Kakde
271 kmart opened
1976
Kamrt acquirees border inc.
1991Kmart raises 1$1 billion
1996
1992
Ended relationship with suppliers
kmart files for chapter
11 bankruptcy protection
KMART | TIMELINE
2
Firststore
2002
Kmart opens store in
maxico & singapore Big kamrt
store format intorduced
the u.s. Bankruptcy
court approves the comapny’s reorganisation
plan
Kamrt buys walden book comapnt
1984
The Ten Deadly Sins
Brand Mismanagement
Not Knowing Its Customers
Underestimating Wal-Mart
Lousy Locations
Ignoring Store Appearance
Technology Aversion
Supply Chain Disconnect
Loss of Focus
Strategy du Jour
Repeating the Same Mistakes
Deepak R Gorad
“The golden rule is that you don’t wait until something is broken to fix it. Kmart never
believed this. Unfortunately for Kmart, as its brand name faltered, so did its sales. Since nearly two-thirds of most customer purchases are driven by the brand, as brands weaken, so do purchases.
Kmart broke the
“golden rule
of retailing,
Poor Positioning
It‟s not about being better,” he
says. “It‟s about being different.”
Determine what it is that makes
Kmart unique, in a good way
“Kmart used to have a private label that had a K in front of it. “That really is a total indictment that you can’t even put your own label on a product. That your brand equity is so pathetic that you can’t even brand your own products.”
•“One of the key problems of Kmart is that they have not created
• a niche outside of pricing.
Lack of a niche
• communicating poorly with its suppliers and
• shareholders
Lack of Communication • Failure in
targeting & positioning
Advertising
What Today’s Consumers Want
clean, well-maintained stores, visible prices, and
easy-to-navigate layouts” matter more
hassle-free
returns policies
“prices that don’t fluctuate
day-to-day” to the absolute lowest
price.
“consistently good merchandise
quality” and don’t expect
top quality
convenient
store location
There are three ways to grow a business
sell to new customers
sell a greater quantity to
existing customers sell higher
value products and services to
existing customers
Munaf Shaikh
Key Drivers for Footfall Improvement
Quality of
Products
used
Overall
Service
Quality
Ambience and
Hygiene at
Salon
Overall
Quality of
Service by
Service
Provider
Ease in
scheduling
an
appointment
Proximity
Top 2 Box Summary
Importance of Factors
Reception Overall Quality
of
Service Operator
who attends you
Value for Money
KEY FINDINGS( Derived from Online Surveys and Professionals in Industry)
Key Drivers Obtained
Reliability Responsiveness Assurance Empathy Tangibles
Kmart doesn‟t have customer focus
Loyal Kmart customers preferred
promotional shopping over „consistent
value.‟That‟s why they shopped at Kmart
in the first place.
Kmart‟s early customer was the low- to middle-income
consumer Those customers have been seduced by Target
and Wal-Mart and will never go back
in 1983,most attractive customer group
baby boomers
$20,000 to
$35,000
25- to 44-year-old college
developed a “culture of expansion, where expansion was the
goal, not serving the customer.
Kmart completely lost sight of its customer
too busy
opening new stores.
Amol Kakde
A Collection of Stores
Scaling Back
The Fallout
Population
Shifts
No Relocat
ion
Ignoring Financial Realities
No Takers
“Kmart used to be out of stockon about 20 percent of its inventory, which they seemed to feelwasacceptable
Kmart does not win for pricing, product assortment, service,easeof shopping or an enjoyable shopping experience,”
Overwhelmed EmployeesFindingemployees for assistance is
often hard not because they are working in the back, but because
there simply aren’t very many on the clock
Kalpesh Bhasgare
The Supply/Demand Disconnect
results in higher
inventory carrying
costs, poor buying
decisions, and
it has resulted in
lower sales and lower
profit margins per square foot
as its regular out-of-stock notices on hot items indicate,whilecausing an overflow of less popular products
Lack of a powerful
information system
Too Low a Priority
Without knowing its customers and their needs, Kmart is unable to effectivelystock merchandise in a timely manner to meets those needs
Kmart should have gotten to know its customers on a store-b ystore
Personal Needs
External Communicati
ons to consumers
Expected Service
Perceived Service
Service Delivery
Translation of perceptions into service-quality specifications
Past experience
Word of Mouth
Communication
Management perceptions of
consumer expectations
Consumer
Marketer
Gap 1
Gap 2
Gap 3
SHRUND KALSE
10 recommendations for getting back on track.
• They have to go back to where they’re profitable and get out of the areas where they’re not profitable
Scale Back
• narrowing its focus to the highest- value, highest-opportunity consumer for its particular brand image. That niche could be celebrity brands
• using micromerchandisingto tailor its inventory
Carve Out a Niche
• Kmart’s other private-label brands also need to be highlighted and showcased, Martha Stewart brand name
Promote Its Brands
• The company also needs to give its CIO more authority to do what is needed with the entire IT system, as well as championing the cause of improved information functioning company-wide
Get Ahead of the Information Technology Curve
• new design is an excellent startat implementing needed cosmetic and layout improvementswithinKmart stores.
Expand the Store of the Future—Quickly
10 recommendations for getting back on track.
•Employee incentives need to be expanded to benefit associates who come into direct contact with customers
Boost Employee Incentives
•Wal-Mart can coexist
•as long as Kmart finds a way to differentiate itself from its competition.
differentiate from Wal-Mart
•Ask customers directly what they like and don’t like about Kmart’s merchandise,itscheckouts, or its in-store restaurant.
• let customers know that
• the changes they suggested were actually implemented
Find Out What Its Customers Want
•Once Kmart fully develops its plan for the future, stick with it
• longer than a season, or a year, or a CEO.
Stick with a Strategy
• The corporate culture needs to be
• adapted to allow for new thinking, new approaches, and new
• ways of doing business. Kmart needs to be willing to emerge
• from the conservative corporate mantle that has held it back
Foster Creativity