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Marketing Consulting Project
Current situation and marketing strategies for SEARS
The situation analysis should include in-depth discussion of the Customer, Company, Context, Collaborators, and Competitors (5Cs) as reviewed in the text. The situation analysis should begin with discussion of the company. A complete self-exam of the company, current mission, products and services offered, and strengths and weaknesses (as the first part of a SWOT analysis). The section on the Customer is particularly important, and students are encouraged to create a detailed description using demographic, geographic, and psychographic factors to describe the target consumer. Discussion of the consumer should include consumer decision-making (type of decision, consideration set, etc.), behavior, attitudes, perception, learning, memory, and motivation. The Context questions regarding trends in the economic, political, legal, technological and societal environments should be supported with secondary data regarding the current state, and projected future, of these environments. The Collaborators section should include networks of support functions such as suppliers and distributors. Secondary data should also support discussion of competitors and their strengths in the marketplace.
Expert Answer
History: SEARS, founded in 1886 in Chicago by Richard Warren Sears and Alvah Curtis Roebuck is headquartered in Hoffman Estates, Illinois. Sears was a primary seller of appliances, hardware and clothing. In 1925, it started as mail order Catalog Company and then they started opening retail stores. It was then bought by the discount store chain Kmart in 2005.
Current Situation (last few years):
- The stock prices has dropped drastically within the last few years
- Chairman, Edward S. Lampert scrutinised for raising prices, cutting costs, mismanagement of merger with Kmart
- Marketing budgets have been reduced
- Continuos drop in sales
- Failure of Sears Grand strategy (strategy for competing with small malls)
- Martha Stewart (a seller of home products at Kmart) have moved to Macy’s ( a competitor)
SWOT ANALYSIS (COMPANY):
STRENGHTS:
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WEAKNESSES:
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OPPORTUNITIES:
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THREATS:
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PESTEL ANALYSIS (CONTEXT):
| POLITICAL | The political environment and the policies of different parties in power in different parts of the world (where SEARS is working) affect the working of the company. |
| ECONOMIC | After the global economic crises of 2008, the consumer’s purchasing power has decreased. There has been an increase in the unemployment rate which has led to less buying power and inturn less sales. |
| SOCIAL | The social trends are very dynamic which means that they keep on changing and the company must change their products and policies according to the trends to be able to survive the competition. |
| ENVIRONMENTAL | The consumers all around the world are becoming environment friendly, so the company must market their products keeping the customers views about the environment in mind. They should produce their products with less environmental degradation for increased sales. |
| TECHNOLOGICAL | The technology becomes obsolete very fast. Many of the consumers are using technology to buy the products instead of going to real stores (buying online on Amazon) so the company must upgrade itself technologically to be competitive. |
| LEGAL | The legal environment of every country is different and for the smooth and efficient functioning of the business the company must comply with the legalities of every country it is having its operations. |
COMPETITOR ANALYSIS:
| SEARS | JC Penny | Kohls | HomeDepot | Target | |
| Range | Apparel, hardware, appliances, electronics | Majorly apparel, electonics | Apparel, Household items | Hardware, Appliances | Apparel, Household items, Perishable items |
| Revenue Growth | negative | very low | high | medium | medium |
| Image | Hardware store | Bargain Clothing | Good Apparel | Low price store | Good products at low rates |
| Pricing | Low to mid range | Low range | Heavy Discounter | Low to mid range | Low to mid range |
| Target Markets | women with age 25-55, and moderate income | Customers looking for mid priced product (all mid range products) | women and teens, but particulary gen X, low to mid income | mainly commercial contractors | women who look out for discount and variety retail |
COLLABORATORS (SUPPLIERS):
Sears biggest problem is not declining sales, its biggest problem is the lost trust of its suppliers. The companies that supply Sears with TVs, clothing are concerned about its ability to pay back its bills and some of these suppliers are cutting back on shipments. Which in simple words means that Sears is receiving less merchandise to sell. Due to continuously declining sales from the past few years it is reducing its physical footprint by closing its stores but if the suppliers cut down on shipments then all these efforts of Sears will go in vain.
CONSUMER ANALYSIS (reasons that Sears has lost its customers):
These are the main mistakes which led to Sears losing its customers:
- The first big mistake was in 1981 to move from its core competence (retailing) to financial and real estate services. This shift of focus gave its competitors to take up its market share.
- In 2006, it made its second mistake by restructuring itself into several small units.
- Third mistake was to sell brands like Lands End and many company stores .
- The fourth mistake was the way it treated its employees. They were under constant threat of being fired because of the unrealistic goals the company had set.
- Another major mistake was that it ignored its competitors and felt that it was invincible which led to its downfall.
Shifting focus from retail to real estate led to failure of Sears in understanding customer needs and losing out on customers. When it restructured, the units were headed by unexperinced retailers which further led to losing customers. It didn’t realise that customers were moving away and ignorance of competitor’s customer retention and attraction techniques further led to its downfall. Sears is iteself responsible for its plight.
New Marketing Strategies:
- Should reach consumers on personal level to rebuild relations
- Extensive promotions (Coupons, discounts etc.)
- advertisement (TV, radio, print, social media)
- External relations (sears executives in media, going live on social media etc)
- Internal Communication (make employees realize the need for better customer relations, training employees for the new approach and direction of the company).
