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Retail Business Analysis

Maria Carrillo

BUS620: Managerial Marketing

Dr. Lee Meadows

August 29th, 2011

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Retail Business Analysis

All organization need to invest in market research to be at the

forefront of its business. The marketing effort must take into

account market segmentation to build a strong marketing department.

These concepts apply to the retail industry, which have evolved into

a very competitive industry for which Kmart is a discount retailer

pioneer. Kmart is the third largest retailer in the US even after

filing chapter 11, that allows them to re-structure. For Kmart,

efficiency is the key concept on cost with the likes of Walmart and

Target. Therefore, Kmart needed to change their marketing strategy

that failed their customers before.

Kmart new strategy is to continue their partnership with brand-

names that appeal to their new target customers (Latinos and African-

Americans). Using market segmentation which “is the process by which

a market is divided into distinct subsets of customers with similar

needs” (Mullins and Walker (2010), p. 180). Segmentation was a key

factor in Kmart's failure because their inability to decide which

market to be in. Marketers representing Kmart need to find an

identity that will satisfy their customers. Some of the brand-names

they carried are targeted towards inner-city minorities; however,

Martha Stewart's fans are part of a different market. Marketers from

Kmart need to position itself as a low-price retailer for urban

multicultural communities to create an identity with the customers.

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The Latino / African-American market segment can become Kmart's

specific market and it can create a niche for its organization to

serve a community that is somehow neglected by its retail

competitors. Focusing on the segmentation strategy of this target

market can help Kmart to create customer satisfaction with this

segment of the market. It is a given fact that unless Kmart develops

a new marketing strategy, and defines an specific market; the future

does not look good. The organization was given time to re-structure,

but unless management makes an investment of time and resources to

discover an optimal target, positioning, and most important customer

satisfaction to create a reason for customers to stay with Kmart and

not with the competition, the industry pioneer will not prevail in

the retail business. According to Schroeder (2003) “the strategy for

operations function must be limited to the business strategy and

other functional strategies leading to a consistent pattern of

decisions” (p. 13). Kmart must follow this recommendation with their

marketing strategies.

Kmart need to concentrate in a selected market segment and

deliver satisfaction to the group needs and wants. Ultimately the

goal of any organization is to have long term customers. This

retailer must meet customers expectations to create loyalty and

repeat business. I believe that Kmart needs to deliver a unique

shopping experience to the selected market segment if the want to

stay in business.
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Reference

Huston, L., Lee, H., Shewchuck, C., Welsh, R. (2003) Kmart: A

Strategy of Survival, Economics of Competitive Strategy.

Mullins, J. W., Walker, Jr., O. C. (2010). Marketing management: A

strategic decision making approach (7th ed.). Boston: McGraw-

Hill Irwin.

Schroeder, J. E. (2003), Consumption, Gender and Identity,Consumption

Markets & Culture.