Loyal Kmart Customers example essay topic

K-Mart Kmart is the #3 discount retailer in the United States behind Wal-Mart and Target. Kmart sells name brand and private label merchandise, mostly to low and mid - income families. It has more than 1,800 stores and currently employs more than 220,000 associates in all 50 states, Guam, Puerto Rico and the U.S. Virgin Islands and owns an e-trailer Blue Light. com. As of Jan. 30, 2002, Kmart had 124 Kmart Super centers that combine a full grocery, deli, bakery, video rental and 24 hour / seven -days-a-week availability along with the general merchandise selection of a Kmart discount store.

A core strength for the company continues to be the expansion of Kmart Exclusive brands such as Martha Stewart Everyday, Sesame Street, Jaclyn Smith, Kathy Ireland, and Route 66. These brands-nationally available only at Kmart-have progressively added to their assortments. Despite that, the company filed for Chapter 11 Bankruptcy protection on January 22, 2002, after a year in which its financial performance declined from unimpressive to bleak. The filing came a day after Kmart's major food distributor, Fleming Cos., said it had cut off most shipments to Kmart because the discounter failed to make its regular weekly payment for deliveries. Fleming said Kmart, its largest customer, owed $78 million. This bankruptcy filing let Kmart rid itself of unprofitable stores and shrink the payroll.

The company has closed 284 unprofitable stores and laid off about 22,000 workers to pare costs. Kmart stores have fallen as consumers have slowed their spending and as rivals like Wal-Mart Stores and Target have tried to siphon off Kmart's customers. In this paper, I will try to suggest some solutions to improve Kmart as a company as a whole and help increase its sales. First of all, Kmart needs to improve its marketing techniques.

The problem that it's facing right now is decreasing sales. What I think it should do is lower the prices. It will definitely attract more customers. For example, the reason that one of Kmart's biggest competitors, Wal-Mart is doing so well is because Wal-Martin known for its very low prices. Also, I think that Kmart should increase eye-capturing advertising. Not only should they increase the advertising, but they should try to appeal to different kind of customers.

Kmart should make sure that its advertisements attract not only middle-aged population-mostly housewives, but it ought to attract more hipper / younger consumers. In addition, it needs to provide better quality of items. One main reason why Target is a successful retailer is because it offers designer items and contemporary fashion at affordable prices. I believe that Kmart will have more high-class customers if it will be willing to improve the quality of items it offers. Kmart should also attract customers by offering coupons and discounts. For example, Ames offers 10% senior discount.

I'm sure that offering discounts will trigger more customers based on my own experience. I used to work for Associated Supermarkets and every Wednesday we offered 10% senior discounts, and by doing that we gained a lot of elderly customers, which drove our sales up. The other problem with Kmart is that its open to the same type of shoppers. They should attract more diversified customers. Kmart should do more to accommodate the increasingly diverse character of its shoppers. It needs to adapt its stores, from the layout to the stock to the personnel, to make them more welcoming to the immigrants.

In traditionally white neighborhoods, Kmart's customer base is 30 percent Asian and 20 percent Latino, and yet often they make no effort to hire people who reflect those communities, or they make no changes to the product lineup. Kmart should hire more diversified employees like Advantica does. Advantica's workforce is highly diverse. Also, in order to catch the attention of many immigrants, it should be willing to advertise in different languages.

For example, Denny's does advertising for Spanish customers. Kmart should carry products based on ethnic neighborhoods. For instance, in areas with large numbers of Asian shoppers, the stores should stock plenty of clothes in petite sizes and have signs that make clear, without words, where various products can be found. Store layouts shouldn't be confusing, they should be logical and employees should be willing to help shoppers understand the self-checkout registers that Kmart has installed in many stores. In addition, Kmart should focus on Spanish-speaking and African-American shoppers because as research indicates, many of them are loyal Kmart customers and more than 55 percent of all Hispanics in this country live within 15 minutes of a Kmart store. Kmart must advertise in Spanish, hire Spanish-speaking employees and carry more items that would attract Hispanic customers.

As for African Americans, Kmart should be carrying special products for them, for example they require different hair and skin products. Since they love music so much, the company can use famous black singers to advertise for Kmart. Most likely, this approach would appeal to the desired audience. Another thing that would benefit Kmart is improving its management techniques. There is a poor Employee-Customer relationship. And it's a very important component of a successful company.

Improving it will definitely benefit a company as a whole. Kmart can do a lot to correct this problem. It can for example, offer outstanding training. Besides that, they should make a job training an ongoing process. Target offers an excellent training, and promotes "fast, fun and friendly service". This works for them, because they have a great Employee-Customer relationship.

Kmart should also consider giving employees incentives. Incentives in the form of commission, for example, really motivate employees to their best, because they know that the more they sell, the more they earn. For instance, Bloomingdale's offers commission in addition to the base salary to its employees. Working there as a sales associate, I can note that its employees are always polite, friendly and helpful, because we knew that our earnings depend on how well we sell.

Kmart may also motivate its employees through recognition awards. They can for example, give "Employee of the Month" award and post a picture of that best employee for everyone to see. This technique would really encourage employees to do well. Every employee would want to be the employee of the month, and will strive to do his / her best. Another way to offer help to customers is what actually Target does.

At the end of most aisles, Target stores have a red service phone that shoppers can use to get help in finding necessary items. Kmart should also watch its employees through cameras and see how well they perform their duties and how effective they interact with customers. Firing poor performers would alarm others and they would improve. In addition, the company should offer customers a customer service number that they can use to make complaints or praises. For example, Aldo, a shoe retailer, always gives its customers a card, which has the name of the sales associate that was helping that customer and a customer service number for the purposes mentioned above. One last suggestion that might improve an Employee-Customer relationship is actually grading the employees like Target does.

Target managers grade store employees regularly - green is good, yellow is alarming, and red is trouble. A store with too many red grades, gets a special visit from a district manager, who then returns at 11-day intervals until he or she sees improvement. Another factor that might have caused bankruptcy is its poor management. I think what Kmart needs to do to correct the problem of poor management is to fire all the bad / inefficient managers with new highly qualified managers. They might have new ideas that will help Kmart enhance the ability to successfully lead itself through the reorganization process and emerge from bankruptcy. Kmart is very widely known by people living in the United states.

I think Kmart should take itself to different countries, it should close out all the unprofitable stores in the United States and instead open some stores abroad. For example, Wal-Mart has stores in nine foreign countries and now goes to Japan. Also, Exxon Mobile's 69 percent of total sales are foreign sales. So Kmart should also expand more into the global arena.

I believe, and really hope that the ideas that I gave will improve Kmart and help it emerge from bankruptcy, although I realize that the change will not happen overnight, it will at least take a couple of years.