Alexa Bergman
Lucy Colgan
Kyle Jensen
Kelsey Kramer
Julia McClellan
Kok Kit Sue
Christopher Thomas
Agenda
History
Current Big Picture
Revised Big Picture
Final Implications
2
History
S.S. Kresge
Corporation
officially
changes it name
to the Kmart
Corporation
Sebastian S. Kresge:
invests in 5-andDime convenience
stores, called the
S.S. Kresge Stores
1897
Kmart merges
with the Sears
Corporation in
hopes to obtain
the Sears customer
base
1977
March 1st 1962
First official,
“KMART”
store is
opened in
Garden City,
Michigan
2005
2002
Kmart
Corporation
files for
bankruptcy
3
Current Big Picture
Product
Segment
Price
Business
Objective
Marketing
Objective
Source of
Volume
Target
Place
Positioning
Promotion
4
Fundamental Entity
• Kmart as distinct brand under Sears
Holding Corporation
• Discount Retail Space
Core Competence
Core Competence
Maintaining/establishing
exclusive brands with
celebrities and designers
Strategic Asset
Exclusive
brands
only sold
at Kmart
Benefit
Unique
products that
drive
consumers to
Kmart
Goal: Provide quality, discount products through its exclusive brands.
Marketing Objective/Source of Volume
MO
•Acquisition
SOV
•Steal Share
7
Segmentation
• Demographics
– Females aged 28-49 years
– Emphasis on Hispanic
shoppers
• Attitudes & Behaviors
– Value low prices
– Engage in discount shopping
8
Targeting
• Meet Maria, 28
– Mother of 2 kids
– Lives in Raleigh, NC
– Works at Department
of Labor
– Discount shopper
– Interested in cooking,
spending time with her
family, and maintaining
a well-kept home
9
5-Box Positioning Statement
Kmart stores are
outdated and do
not fulfill my basic
shopping needs
When I shop at
discount retail
stores, I go to
Walmart or Target
Kmart offers
exclusive brands
like Sofia Vergara
to attract adults
Kmart meets my
shopping needs
and standards
Kmart is my first
choice discount
retail store
10
The 4 P’s
Product
Price
Promotion
Place
11
Product
• Offering a wide range of goods in the discount
retail sector
• Introduction of Smart Sense line by offering
quality products that cost 20% lower on average
• Introduction of exclusive brand lines, e.g. Bongo,
Joe Boxer, and Sofia by
Sofia Vergara
12
Price
• In discount retail market
• Offer low prices but not guaranteed to be
the lowest
13
Promotion
• Television Advertising
– http://www.youtube.com/watch?v=sQTwtFUcGUg
– Event and seasonally driven advertisements
• Shopyourway.com
– Online reward/loyalty point system
• In Store promotions through signs
– Promotes discounts, layaway, distinct
brands
• Weekly circulars
14
Place
• Retail Locations – currently 1,300 stores
– Warehouse of plethora of products
– 3 sub-retail brands which each offer additional
products
• Kmart
• Big Kmart
• Super Kmart
• Online Options
– English/Spanish
– Online Services, such as: Pick up in store, MyGopher
delivery service
15
Our Kmart Adventure
16
Big Picture Problems
Product
Segment
Price
Business
Objective
Marketing
Objective
Source of
Volume
Target
Place
Positioning
Promotion
17
Revised Business Objective
Core Competence
Skill at
creating a fun, family
retail expeience
Strategic Asset
Widest breadth
of family-oriented
products
Benefit
A familyfriendly retail
experience for
all ages
Play spaces for
Children
18
Revised Target
JOHN CLARK
Age: 42
Paramedic
DENICE CLARK
Age: 37
Dental Hygienist
Expecting a baby
KATIE CLARK
GREG CLARK
Age: 13
Loves Katy Perry, to
dance, trendy fashion
Age: 7
Loves baseball, action
figures, playing outside
19
Revised Positioning
Kmart stores are
outdated and do
not fulfill my basic
shopping needs
When I shop at
discount retail
stores, I go to
Walmart or Target
At Kmart there is
the widest
breadth of family
products and
experiences
Kmart is a onestop-shop with
products for my
whole family
Kmart is my first
choice discount
retail store
20
Revised Place
FOCUS: Retail stores that appeal to a FAMILY, FUN experience
EXECUTION:
1. Shut down current Kmart stores that are in poor
condition and decentralized areas
2. Renovate remaining stores to appeal to Family and Fun
- Ball Pit, Jungle Gym area
- Music Selection in fitting rooms
- Tablet Kiosks in aisle
21
Sample Place
22
Revised Product
FOCUS: Products that appeal to each member of the family
EXECUTION:
1. Expand Grocery department
2. Expand on household appliances
-utilize relationship with Sears
3. Further develop apparel lines for babies, toddlers
and juniors
4. Expand toy and games department
23
Revised Promotion
FOCUS: Promotions that market a FAMILY, FUN experience
EXECUTION:
1. Advertisements that demonstrate the new dynamic
variable
2. Move the weekly print circular to a digital medium
3. Seasonal promotions for kids
24
Sample Promotion
Everything for the American
25
Summary
• Kmart was lacking a dynamic variable
• We recommend to:
– Make dynamic variable a discount store that
provides a family, fun experience for shoppers
– Retarget to the family as a unit
– Renovate locations to offer the family
experience
26
Questions?
Thank you!
Discount Departmental
28
Supercenters
29
Supercenters
30
25-40:
“Department stores often target advertisement and marketing toward this
age group since they are more likely to have growing children and families
for which they need to purchase merchandise.”
–www.ibisworld.com
31
32
Product Differentiation
• Private labels or exclusive brands account
for about 20.0% to 30.0% of store
merchandise.
• 70.0% to 80.0% of merchandise is the
same across most stores in this industry.
33
Competitor Distinct Brands
• Walmart
– Great Value
• Super Target
– Archer Farms
– C9 by Champion
– Circo
– Merona
34
Driving Factors in Retail
As shown in the following Figure, young adults are considerably more likely to
report shopping at department stores and to do so frequently. The 25-34 segment is
clearly an especially important target for many department stores, as many within
this segment routinely shop within the channel.
35
In-Store Media
“According to Mintel’s exclusive consumer research, 43% of mass merchandiser
shoppers stated that it is extremely or very important to them that the retailers they
patronize provide ways for them to learn about new products and other topics of
interest. As such, the potential for this factor to influence sales should not be
overlooked” –mintel.com
“Of particular importance is the ability of electronic media to communicate the value
of various products, thereby reducing the common fixation on price. By educating
customers about the value of quality products, retailers can highlight store worth
while reducing price sensitivity.” mintel.com
36
Important Factors
37