Scenario 5: Traditional Department Store A traditional department store chain is

Question

Scenario 5:

Traditional Department Store A traditional department store chain is facing greater competition from full-line discount stores, specialty stores, and Web-based retailers. This firm is especially concerned about the heightened vulnerability of its furniture department to competition from a variety of formats. It is worried about the effects of the low prices and immediate availability of goods at stores like Ikea, as well as the availability of in-home decorator services at independently-owned home furnishing stores.

The chain’s furniture is displayed in room settings. This format better enables shoppers to conceptualize what the furniture will look like in their homes. It also results in the sale of accessories such as lamps, paintings, and throw pillows.

Much of the chain’s furniture is moderately priced, well-designed, and available in a variety of fabrics and finishes. The chain relies on well-known manufacturers with excellent reputations for product quality, as well as delivery time commitments. Unlike many discounters, all of the chain’s furniture is available in a variety of sizes, fabrics, and finishes. Also, unlike Ikea or category killers such as Bed Bath and Beyond, the firm does not sell low-quality “ready-to-assemble” furniture.

To reduce price competition, the department store chain typically requires its suppliers to sell it exclusive merchandise. This often consists of a selection of unique fabrics, finishes, leg designs, and even sizes. In other cases, the firm requires that its vendors assign unique model numbers to its goods. Thus, a customer seeing a sofa in a department store would either be unable to purchase a comparable item at a lower price or have a difficult time locating the good.

The chain’s employees come from a variety of backgrounds. Some of its staff have either significant experience as interior decorators or have a flair for decorating. While others may be excellent salespeople, they have much less knowledge of fabrics and are less comfortable developing room arrangements or selecting coordinating or contrasting fabrics.

Although many specialty stores offer in-home interior decorating assistance, Web-based merchants and discounters do not provide this service. While the fee for these services vary, many specialty stores charge a fee of $100 to $200 per visit to confirm that the merchandise ordered is appropriate for one’s home. This fee may be waived if a purchase exceeds a given level (such as $2,500). The department store chain offers only in-storebased services (such as confirming that the sofa is the proper color based on viewing a fabric sample of a chair that the client owns).

Complete The Overall Strategy for the particular organization:

Overall Strategy Controllable variables

· Goods/service strategy

· Location strategy

· Pricing strategy

· Promotion strategy

Uncontrollable variables

· Consumer environment

· Competitive environment

· Legal environment

Overall Strategy. Overall, this section should provide detailed insight and description as to how the organization is going to reach its objectives. Controllable variables and strategic actions for the retailer should be detailed. Consider what opportunities among the 4P’s that the retailer can capitalize on to grow its business. Provide substantial detail to support your strategic recommendations. Uncontrollable variables should be analyzed for their potential impact on the retailer’s business decisions. Recommendations as to how the retailer can address uncontrollable variables are crucial.

Explanation / Answer

Overall Strategy Controllable variables

Goods/service strategy :

The goods startegy defines the kinds of goods and services the firm offers to its customers. Unlike many discounters, all of the chain’s furniture is available in a variety of sizes, fabrics, and finishes. Also, unlike Ikea or category killers such as Bed Bath and Beyond, the firm does not sell low-quality “ready-to-assemble” furniture.

· Location strategy

The location in general of the traditional store chain.The specific area its located, the income levels of the population are critical factors that decribe the range of sales that can be expected.The population density and the type of neighbourhood ,relative access to competitors's store and transport facilities also play a crucial role in determinning the location of the store.

· Pricing strategy

The chain’s furniture is displayed in room settings. This format better enables shoppers to conceptualize what the furniture will look like in their homes. It also results in the sale of accessories such as lamps, paintings, and throw pillows.Much of the chain’s furniture is moderately priced, well-designed, and available in a variety of fabrics and finishes

· Promotion strategy :

To reduce price competition, the department store chain typically requires its suppliers to sell it exclusive merchandise.The chain relies on well-known manufacturers with excellent reputations for product quality, as well as delivery time commitments.

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Overall Strategy Uncontrollable variables

Consumer environment:

· Competitive environment:

The effects of its competitior's of the low prices and immediate availability of goods at stores like Ikea, as well as the availability of in-home decorator services at independently-owned home furnishing stores. traditional department store chain is facing greater competition from full-line discount stores, specialty stores, and Web-based retailers

· Legal environment :

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Q ) Consider what opportunities among the 4P’s that the retailer can capitalize on to grow its business.

A ) The 4 P's of retail marketing are :

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