Sears And Roebuck Company
Business Marketing Term Paper Sears and Roebuck Company For this paper I will
be looking at an old established company, that has re-addressed its target
market. To increase penetration in the market and expand in new markets, Sears
has refocused its market concept. In the past Sears was where your grandparents
shopped for quality product. As they sat back and enjoyed the comfort of their
brand name and reaped the benefits, other companies sliced away at the market
with new concepts in advertising until about five years ago when Sears woke up
to a lagging profit margin. Sears began a recovery to regain market shares lost
through complacency. To do this they gathered their staff and commenced to focus
on new innovative techniques to cater to the needs of their consumers. First
they looked at the production which was well established but could be
streamlined. Some items could be eliminated or replaced by other brand name
products to give the consumer a broader choice of items.
For example they sold
the Advantis computer branch to IBM when the projected competition would limit
revenues in this area. They also negotiated lucrative contracts with brand name
companies for the exclusive retailing rights for their product, an example of
this is the Nordic Track home fitness equipment in January of this year. They
targeted school age children with the new styles, which they refer to as the
“Relaxed Uniformity” which increased sales in July of 1998. This helped bring in
the younger and health conscious consumers who did not feel that the Sears brand
name was right for them. This stream lining effort would include shutting down
some of the lagging catalog sales offices. This allowed them to establish more
competitive prices in the market and better returns for their shareholders. This
led to an increase in domestic revenues by 4.2 percent in 1998. The next areas
they looked at were the location of their stores and the placement of the
products in their stores. Some of the older stores which did not have a profit
margin that warranted the expense of their upkeep where eliminated to cut
overhead expenses. In addition, using trend analysis focusing on consumer
habits, they took a hard look at the layout of the stores to see if they could
improve sales through a better display or more efficient floor plans. Sears
decided to set up displays, which bring the consumer walking by into the store
and the product that has the return buyer’s interest in the back of store.
