Drgorad retail mgmt case prsrn kmart

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  • 1. A CASE PRESENTATION ON Presented to: Prof. K. Ravindran Presented by: Pranay Ragabhagat Deepak R Gorad Munaf Shaikh Kalpesh Bhasgare Shrund kalse Amol Kakde
  • 2. 271 kmart opened 1976 Kamrt acquirees border inc. 1991 Kmart raises 1$1 billion 1996 1992 Ended relationship with suppliers kmart files for chapter 11 bankruptcy protection KMART | TIMELINE 2 First store 2002 Kmart opens store in maxico & singaporeBig kamrt store format intorduced the u.s. Bankruptcy court approves the comapny’s reorganisation plan Kamrt buys walden book comapnt 1984
  • 3. 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
  • 4. Deepak R Gorad
  • 5. “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
  • 6. 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
  • 7. Munaf Shaikh
  • 8. 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
  • 9. 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.
  • 10. Amol Kakde
  • 11. A Collecti on of Stores Scaling Back The Fallout Popula tion Shifts No Relocat ion Ignoring Financial Realities No Takers
  • 12. “Kmart used to be out of stockon about 20 percent of its inventory, which they seemed to feelwas acceptable Kmart does not win for pricing, product assortment, service,ease of shopping or an enjoyable shopping experience,” Overwhelmed EmployeesFinding employees for assistance is often hard not because they are working in the back, but because there simply aren’t very many on the clock
  • 13. Kalpesh Bhasgare
  • 14. 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,while causing 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
  • 15. 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 Communicati on Management perceptions of consumer expectations Consumer Marketer Gap 1 Gap 2 Gap 3
  • 16. SHRUND KALSE
  • 17. 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 micromerchandising to 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 improvementswithin Kmart stores. Expand the Store of the Future—Quickly
  • 18. 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,its checkouts, 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