THE HOME DEPOT
The Home Depot
Brand Audit
Saul Mendiola
Professor Haworth
MKT 3320.001
12/16/14
THE HOME DEPOT
I.
Brand Inventory.
A. Company:
The Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank. Along with
investment banker Ken Langone and merchandising guru Pat Farrah, the founders’ vision
of one-stop shopping for the do-it-yourselfer came to realization when they opened the
first two Home Depot stores on June 22, 1979, in Atlanta, Georgia. The first stores, at
around 60,000 square feet each, were big warehouses that dwarfed the competition and
stocked 25,000 SKUs, much more than the average hardware store at that time. Empty
boxes piled high on the shelves gave the illusion of even more product. As of 2014, The
Home Depot has more than 2,200 convenient locations throughout the United States
(including the territories of Puerto Rico and the Virgin Islands), Canada, China and Mexico.
Stores average 105,000 square feet with approximately 23,000 additional square feet of
outside garden area. The Home Depot, Inc. is the world’s largest home improvement
retailer based on Net Sales for the fiscal year ended February 2, 2014 ("fiscal 2013")
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Financial Statements*
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In August of 2014, Home Depot announced that longtime CEO Frank Blake will step down
on November 1. He was to be replaced by Craig Menear, the company’s then U.S. retail
president. Menear oversaw the company’s supply chain network, global sourcing and
vendor management, as well as its marketing and digital business. Since joining Home
Depot in 1997 Menear has served in various high level merchandising roles including,
most recently, executive vice president of merchandising.
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Frank Blake.
Craig Menear.
B. Category and Competition: The Home Depot competes mainly based on customer
service, price, store location and appearance, and quality, availability and assortment of
merchandise. In each market it serves, there are a number of other home improvement
stores (Lowe’s is considered to be the company’s major competitor), electrical, plumbing
and building materials supply houses and lumber yards. With respect to some products
and services, it also competes with specialty design stores, showrooms, discount stores,
local, regional and national hardware stores, mail order firms, warehouse clubs,
independent building supply stores and, to a lesser extent, other retailers, as well as with
installers of home improvement products.
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It is good to mention that the company’s business is subject to seasonal influences.
Generally, the highest volume of sales occurs in the second fiscal quarter (June-August)
and the lowest volume occurs during the fourth fiscal quarter (December-February). This
can be attributed to weather conditions in the areas that allow homeowners and
contractors to work on their home improvements and new constructions.
The Home Depot maintains a global sourcing program to obtain high-quality and
innovative products directly from manufacturers around the world. It has three sourcing
offices located in the Chinese cities of Shanghai, Shenzhen and Dalian, as well as sourcing
offices in Gurgaon, India; Rome, Italy; Monterrey, Mexico and Toronto, Canada.
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C. Products Within Category for the Brand:
Home Depot stores inventory consists of up to 40,000 different kinds of building
materials, home improvement supplies, appliances and lawn and garden products for all
project needs. Selections may vary from store to store because The Home Depot stores
are always stocked with merchandise that is localized to match area's specific market
needs. In February 2012, In need of an opening price-point private-label brand that could
extend across multiple categories, The Home Depot introduced the HDX brand. Keeping
a close connection to the retailer's rich brand name and iconic orange color, the HDX
brand was designed and built on a foundation of “Trusted Value,” delivering premium
products at an affordable price. The launch included a video to educate store associates
and bran guidelines to ensure consistency across a wide range of products.
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D. Brand Analysis for the Brand: According to Forbes, The Home Depot is ranked#43 in the
list of the most valuable brands in 2014. Home Depot’s new growth strategy is tied to Ecommerce growth, with mobile technology, orange apron-clad associates at Home Depot
stores are able to help customers find and buy items by offering them a broader array of
merchandise through access to the retailer’s extensive online inventory.
E. Consumer Profile the Brand: The Home Depot stores serve three primary customer
groups, and they have different customer service approaches to meet their particular
needs:
• Do-It-Yourself ("DIY") Customers.
These customers are typically home
owners who purchase products and
complete their own projects and
installations. Because of them, Home
Depot offers a variety of clinics and
workshops both to impart this
knowledge and to build an emotional connection with our DIY customers.
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•
Do-It-For-Me
("DIFM")
Customers. These customers are
typically
home
owners
who
purchase materials and hire third
parties to complete the project or
installation. Home Depot offers a
variety of installation services
targeted at DIFM customers who purchase products and installation of those products
from the stores, online or in their homes through in-home consultations. Installation
programs include many categories, such as flooring, cabinets, countertops, water heaters,
and sheds. In addition, Home Depot provide professional installation in a number of
categories sold through in-home sales programs, such as roofing, siding, windows, kitchen
and bath refacing, furnaces, and central air systems.
•
Professional
Customers.
These
customers are primarily professional
remodelers,
general
contractors,
repairmen, small business owners and
tradesmen. Home Depot
offer a
variety of special programs to these
customers, including delivery and willcall services, dedicated staff, expanded
credit programs, designated parking spaces close to store entrances and bulk pricing
programs for both online and in-store purchases. The company introduced Pro Xtra, a
new loyalty program that provides professional customers with discounts on useful
business services, exclusive product offers and a purchase tracking tool to enable receipt
lookup online and job tracking of purchases across all forms of payment.
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F. Advertising/Marketing Communications for the Brand: The Home Depot offers a low
price guarantee to beat anyone's advertised specials. And if for some reason you can't
find it in the stores, they offer 250,000 other products that they can special order for its
customers. The slogan "More saving. More doing." was introduced by The Home Depot
in March 18, 2009, replacing "You can do it. We can help." which had been used since
2003.
The Home Depot claims to be “The world leading home improvement store who provide
great customer service and have respect for all people”. This positioning statement
reinstates the fact that Home Improvement is the store to go to for any of your home
improvement needs. It also states that it has respect for all people, including women!
Many people have this assumption that Home
Depot is not the home improvement store to go
to if you are a woman, whereas Lowe’s would be
the best store for women. The goal is to position
the store as a welcoming place for both men and
women. Home Depot released the “Let’s do this”
campaign to motivate homeowners to take on
do-it-yourself projects around their homes. To
drive home the message, The Home Depot
needed something to tie the message together.
What one item could represent the projects
homeowners have? The answer: a bucket.
G. Media for the Brand: The Home Depot business has one of the most recognized brands
in North America. As a result, The Home Depot ® trademark has significant value and is
an important factor in the marketing of their products, e-commerce, stores and business.
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Home Depot is considered to be one of the efficient advertisers. This year so far, the
company has spent $25.1 million in advertising resulting in a 6.9% share, or roughly $3.6
million.
H. Promotions for the Brand: In 2008 Home Depot marketed its
“New Low Prices” campaign which featured rebates and
discounted prices on over thousands of products. Home Depot
also offers discounted prices via its online Savings Center where
it cuts up to 20% off products such as play sets, kitchen faucets,
and professional saws.
The company has established “special buys” prices
on appliances offering 25% discounts on products
such as Washer & Dryer sets, and 20% off on Water
& Ice Refrigerators.
Home depot also offers a 10% discount on a first purchase when opening a new credit
card account, as well as no interest if paid in full within 6, 12, or 24 months depending
on the amount spent with a minimum payments required.
Home Depot and longtime competitor Lowe’s are known to offer a 10% discount to
military members and their families, and in many cases veterans and retirees any day of
the year.
I. Internet and New Media for the Brand: Home Depot recently redesigned its web site,
which has led to increased site visits and higher conversion and customer satisfaction
rates. Visits to the site are up 20% year over year and conversion rates are up 30%. The
Search engine optimization also has been improved, with Home Depot creating unique
meta-data for content pages and product pages, In addition, the retailer implemented
auto-fill for its search box, resulting in significant improvement in site satisfaction rates
and conversions. The home also has a strong social media presence such as Facebook, in
which it has approximately 1.7 million likes, they also provode their visitor with
THE HOME DEPOT
promotions and links to photos and videos about its products and services. On twitter,
the executive’s team are prolific twitters. Their approach seems to be right out the
playbook: interact, engage and inform. Home Depot loves YouTube, the retailer posts
various how-to videos for the visitors and has approximately 75,000 subscribers.
J. Other
Pertinent
September,
Information:
2014,
Home
On
Depot
announced that hackers exposed 56
million credit and debit cards during its
months-long
security
breach.
The
company also stated it had eliminated
the malware behind the attack from its
payment systems. Card readers that encountered the malware, which Home Depot said
was a custom strain its security team had never seen before, were removed from service.
The company The Company offered identity protection services to any customer that has
used a card in its stores since April.
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K. Brand Value Discussion: The name Home Depot uses
a unique trademark, which identifies what the
company offers and distinguishes it from other
product category entries. Also Home Depot has some
exclusive brands that its major competitor Lowe’s
doesn’t have. The colors that the Home Depot uses
are Orange in the background with big white letters
that describes the name of the company. Home
Depot’s name is very eye catching and easy to remember
for consumers. Nowadays, it’s hard to think of home improvement without thinking of
The Home Depot. The Company’s growth, coupled with the trusting relationship they
have develop with each customer, has resulted in The Home Depot becoming a powerful
brand.
II.
Brand Exploratory:
A. In order to quantify and explore the depth and breadth of The Home Depot brand
awareness, a short survey was conducted by a few random individuals. The questionnaire
was as follows:
1. Do you know what Home Depot is and what they sell?
2. How often do you visit The Home Depot?
3. How was your shopping experience?
4. What comes to mind when you see/hear ‘The Home Depot’?
5. Ho w is the Home Depot brand exposed to you? If any.
We had ten participants responding to the survey, 50% of those being women between
ages 20-50. And 50 % were men between ages 20-55.
Results:
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Based on the results from question 1, all of the respondents stated that they are aware
Home Depot is retail store that sells products for home improvement.
For questions 2, it was concluded that man visit Home Depot more often, with an average
of 3 to 5 times a week. This can be attributed to the fact that most of them own a home
and take trips to the store for their daily home maintained. Some of them were also
regular visitors given that they work with contractors and remodelers. On the hand,
women had an average of 2 to 3 visits per month, it was interesting to see a big difference
among the different groups. Women also considered themselves as ‘seasonal’ shoppers,
meaning they only go to Home Depot on specific occasions such as, summer and
Christmas.
Question 3, all of the respondents said their shopping experience was pleasant, they were
assisted by one or more of the sales associates in the store. There was only one person
(male) who said he had a bad experience with the Home Depot, he was unhappy about
the amount time it took for him to receive his special ordered fridge.
For question 4, all participants provided a few words
describing their thoughts when the hear/see ‘The Home
Depot’. Some of the specific responses included: Work,
Lumber, Dirt, Concrete, Remodel, Garden and Paint. All of
these words fall under the category of home improvement.
Lastly, for questions 5, all participants stated that the Home
Depot brand is exposed to them through social and
traditional media. They said they have seen various commercial on TV, as well as ads for
special buys online.
B. Although it was a small sample of data, we can conclude the Home Depot brand is well
known among men and women of ages 20 to 50 year old. The brand does a great job at
exposing its business in social and traditional media.
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However, it appears that Home Depot key customers are professional contractors
(particularly men), who bring a bigger portion of the net sales. In order for the company
to attract more female clientele, the company might need to be retake and be more
aggressive on their existing Do-It-Herself workshops, which will empower women to take
their home improvement project plans from dreams to done.
THE HOME DEPOT
Citations

Berger, David. "The Home Improvement Retail Industry." Business and News RSS.
BidnesEtc, 6 Mar. 2014. Web. 10 Dec. 2014.
<http://www.bidnessetc.com/business/the-home-improvement-retail-industryanalysis

Gaston, Dave. "The Home Depot HDX." MSI – A Marketing Communications Company.
Home Depot Private Label, 21 June 2013. Web. 13 Dec. 2014.
http://agencymsi.com/work/the-home-depot-hdx-private-labels

Media, Forbes. "Home Depot." Forbes. Forbes Magazine, 5 Mar. 2013. Web. 10 Dec.
2014. http://www.forbes.com/companies/home-depot/

The Home Depot - Home." The Home Depot - Home. Home Depot, 6 July 2013. Web. 13
Dec. 2014. https://corporate.homedepot.com

Cummings, Kellie. "Home Depot's Sloppy Mistakes Tarnish Its Once Bold Brand." The
Huffington Post. TheHuffingtonPost.com, 25 Sept. 2014. Web. 16 Dec. 2014.
<http://www.huffingtonpost.com/kellie-cummings/home-depots-sloppymistakes_b_5867068.html
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