Super K Mart Center example essay topic

Upper management of K-mart must create a public image makeover in order to attract customers from the smaller, but more affluent upper middle class. Proper decisions by upper management will have the desired impact on imaging and positioning. This will cause K-mart to occupy a distinctive place in the target market's mind. The goals must be carefully set in order to attract customers with higher incomes, and at the same time, not alienate those already shopping at discount stores. New programs designed to help change the store's image include, for instance: 1.

A new advertising campaign in which designer Martha Stewart uses K-mart products to decorate her farmhouse 2. Use of pro golfer Fuzzy Zeller in ads to promote golf equipment 3. Co-sponsorship of a race car driven by Mario Andretti 4. In-store greeters and a toll-free customer response number. K-mart has also been working to be identified with fashion.

Everything the stores carry will be considered fashionable, chic and popular. According to the case study, the efforts towards this goal have been successful. K-mart increased sales by 7.8 percent during 1992. The nature and extent of change will be decided by upper management and formulated in the offices of K-mart's headquarters, where the retailer's management team will evaluate every aspect of the company's operations. A revival is not implausible.

After all, K-mart follows in the footsteps of such chains as Sears, JCPenney, and Montgomery Ward, all of which have accomplished turnaround feats of impressive magnitude. But despite the evidence of past turnarounds by similarly beleaguered chains, the thought of K-mart making such a radical change successfully seems remote. After all, generations of customers have the image of K-mart as a cheap discount store burned into their brains. The "blue light specials" invoke images of desperate shoppers madly running into or over each other to get their special buy.

That image will most easily be changed in the children of K-marts present shoppers. K-mart's chief attribute in the highly competitive discount store arena is convenient locations. Unfortunately, location alone may not be enough for the Troy, Michigan-based retailer that invented discount store retailing 33 years ago. K-mart needs more; it needs a new focus and a new image, and it needs them quickly. At a similarly difficult juncture in Sears' history, the Chicago-based retailer had more going for it than does K-mart. Sears chairman Ed Brennan hired a well-respected chief executive, Arthur Martinez, who executed a masterful turnaround program.

Martinez instituted the successful "Softer Side of Sears" ad campaign; sold off Sears' huge franchise-making but money-losing catalog operation and redirected catalog customers into the stores; emphasized credit opportunities through the company's Sears charge; and stressed the retailer's golden reputation with consumers in hard lines and durables, especially with its Kenmore, Die-Hard and Craftsman labels. K-mart's task is just as daunting, if not more so. And its list of attributes as perceived by consumers appears slimmer than Sears' was. As a result, the chain may be forced to reinvent itself into a different kind of retailer, one outside its roots. Unlike Sears, K-mart doesn't have a huge catalog operation to mine, nor credit customers with whom to communicate. Its hundreds of old, sub-par stores have left shoppers with a dated image of the retailer -- even though its new discount store prototype and Super K-mart Center programs are outstanding.

According to George Rosenbaum, president of Leo J. Shapiro & Associates, a Chicago-based consumer research firm, the future of K-mart could be two-pronged: one in super center retailing through Super K-mart Center, the other a strategy for reinventing the discount stores. The super center, or combo retailing has been very successful for Wal-Mart. Maybe this can work for K-mart as well. Sales figures point to K-mart's less-than-stellar productivity statistics: less than $150 per sq. ft. of sales compared to more than $300 per sq. ft. for Wal-Mart and $225 for Target.

The reason: Wal-Mart has the price / value equation sewed up with consumers, and Target firmly holds the fashion / quality position. This makes the challenge even more daunting. K-mart could maintain its power retailer position by rediscovering its niche in apparel, strengthening its home decor departments, growing the super center division and finding the right marketing and advertising message to convey its new image and identity. Kmart can utilize the opportunity of bargaining power with their suppliers by purchasing by opening more stores and purchasing more goods. They can also invest in the their suppliers to ensure quality and efficiency. This can lead to a long-term relationship with the supplier and eventually lead to savings for Kmart.

Kmart can leverage the strength of customer service by consistently improving and conforming to the customers needs. Perhaps by having complaint forms for customers to fill out so they can read first hand what they a re doing wrong. Recommendations Kmart should focus on the growth of their business and not focus too much on their competitors. Keeping their prices at a competitive level should do enough to keep profits up. When a company loses focus on their strategies because they are watching the competition too closely, this will lead to the competition to obtain their customers. Kmart should also adopt the Just in Time inventory system.

This alone can save them probably millions in holding costs. Perhaps with Kmart joining the Worldwide Exchange will show them better ways to keep stock. I would recommend that if an investor owns shares in Kmart stock, I would recommend that they sell their shares. I feel that Kmart is a big and powerful company, however, I do not think that Kmart has much growth opportunity with Wal-Mart and the other competitors in the industry around.

On the other hand, since Blue light. com is doing satisfactory for itself, I say that Kmart expand on that area and form a separate entity. If that happens, I say buy that stock..