Outline
Lowe’s home improvement company is one of the leading distributors and suppliers of household appliances. It has continued to establish more branches nationally and internationally. The contributing factors of its growth are its vision of fulfilling the needs of its customers. True to their words, the company continues to invent means and procedures that will make their products more accessible and appealing to their customers. The company is making good use of the media and modern technology to advertise and market its products. Despite the many competitors, the company still holds a commendable share in the market through the high-profit margins it has recorded.
Introduction
Lowe’s home improvement is a company that majors in household products. It is one of the household companies that has observed an increased number of customers. Since its inception in 1921, the number of customers has continued to increase which has made the company establish many more branches. Among the activities of this company is selling household appliances for repairing and general maintenance of the house. It is also a company that acts as an agent to sell houses. The company deals in more than forty other items including those that can be provided upon request by customers. One of the major reasons why this company has experienced such an upward trend is because of the marketing strategies that they employ. (Wright, 2003)
Major marketing decisions of Lowes Home Improvement
One of the major marketing decisions was to capture their customers through the internet. The company has a website that displays the details of its products and also directs them on how and where they can get the products. Through this website, the customers can also give their views on how the company can improve the products that they are offering. Purchase of these products online is possible which makes it easy for international customers (Golin, 2003). Shipment of these products is organized by the company to the customer’s destination. Many more improvements are being made to the website to serve the customers even better.
To beat the rising competition in the market, Lowes Company ensures that, their prices are ten percent lower than the price of similar products in other shops. Whenever they receive any information that a similar product that they are dealing in is selling at a lower price, they counter it by cutting down on their prices. This strategy has helped the company to maintain and increase its customers.
Customers who wish to acquire a certain property but can not do it due to insufficient funds can be financed. This is usually done through the Lowes project card launched in 2005, the propriety card, and the co-branded visa card. The project cards are for financing major projects of the customers, they offer up to thirty thousand, an amount that can be repaid in up to a hundred and twenty months. To maintain the growing number of African-American and Hispanic customers, the company has launched multicultural marketing styles. Through regular contact with their customers, they seek to know their tests and make the necessary improvements to suit their needs.
Among the marketing channels that are used to promote the products of this company are national television, home, and garden television. The company also uses the radio, email, magazines, and newspapers (Wright, 2003). Using this reliable means, the customers are informed of the activities and the new prices of the various products. The customers of the company may also join and be part of the various clubs offered by the company like; Lowes woodworkers, Lowes garden, and Lowes fan clubs. The company provides gift cards of different nature to enhance the customers’ purchases.
Growth
Since its inception in 1921, the company has gone through a series of growth. Major changes have taken place under the demand of the market. From a home retail chain in the past years, the company now focuses on establishing bigger stores of a hundred thousand square feet. Apart from the home appliances that the company was producing, it allowed the contractors who were infrequent contacts with the customers to make some special orders on the items that they did not have. Through such procedures, the company expanded and enhanced its production line. The company is now a proud owner of over one thousand, three hundred and eighty-five stores distributed in forty-nine states of the United States and at least eleven regional distribution centers (Yost, 2007). It has around a hundred and fifty-seven full-time employees and an additional fifty-three thousand part-time ones.
The vision of this company is to be the first choice of customers when selecting home appliances, to earn the trust of their customers by meeting their needs, offer the best prices for their customers, and the services that will make life easier. By 2006, the company had been approved of four hundred new locations; twenty-five percent of these locations are for the metropolitan market while the remaining sixty-five will be for the hundred top markets. In 2006 alone, the company managed to open a hundred and fifty-five new stores and over one hundred and fifty new ones in 2007. The other motivational means that the company uses to maintain and attract customers are; adding new displays to their stores, making various improvements on the signage, producing more items, and renovating their buildings. (Wright, 2003)
Apart from the above improvements the company has expanded its growth in the past thirty years by innovating new market trends to reach their customers. By the use of modern technology, the company has used the modern means of communication to advertise the activities and products of the company. Through the internet, the company has been able to make the products not only accessible to its international customers but also the possibility of them purchasing these products online. The customers can log on to the company website and find out the prices of the various products on display and also make orders for the products that are not displayed.
Customers can also access the company by use of mobile phones. Through the customer care lines that are available to all, customers are free to make inquiries concerning the services provided by the company. They can also be helped to clear their doubts concerning the prices and services of the goods. Both the national and international customers can be told how and where to get certain product goods and services.
To enhance customer satisfaction, the company allows the customers to use unique products by allowing them to make special orders through a special order sales program. The company ensures that these orders are met within three business days. A flexible initiative program has been launched to ensure that the items that have been specially ordered reach the prospective customers on time.
The products of this company have also continued to be improved as the years go by. The company is aimed at meeting the needs and tests of the customers. Modern models have been designed to suit the ever-changing customer needs. Some of the brand names that the company specializes in include; Samsung, John Deere, Troy-Bilt, Pella, Kitchen aid, Jenn-air, and others (Wright, 2003). There are also some brand names that are exclusive to Lowe’s stores, the product categories are for doors, lighting, windows, paint, tools, and flooring. These brands are; perfect flame, American tradition, premier living, portfolio, Mohawk to mention but a few.
To facilitate the transportation of their products and to ensure a steady supply of the goods, the company has eleven distribution centers regionally and additional twelve flatbed distribution leases and centers. Each regional distribution centerSome brand names have an average of a hundred and twenty-six stores that efficiently distribute the stocks from vendors. The flatbed distribution centers are for products that require special handlings like ladders, building materials, irrigation pipes, boards, lumber, and many more. (Yost, 2007)
Lowes Home Improvements competitors, Sears and Menards
Despite the efforts of Lowes to provide quality services to its customers, the company has faced serious competition from two main companies. The companies, namely; Sears and Menards are engaged in a similar line of products as Lowes home improvements. These companies have also made progressive improvements in their operations to have a share in the market. Due to the increased demand for household appliances, the companies are taking advantage of the many regions that the company is yet to establish branches and taking up the share.
The company has had to compromise with the cost of some of its products to fit in the competitive market. With its principle of reducing the product by ten percent for any reduction by a similar company, it has faced a greater responsibility of honoring the promise to satisfy its customers. The company also receives overwhelming orders from the customers of which unless it fulfills, will lose customers.
Menard was founded by John Menard in 1972. The company currently has a total of two hundred stores in ten states of America. It is the third-largest home improvement dealer in the United States. In the scramble for the share market with Lowes, Menard began establishing larger stores measuring a hundred and sixty-two thousand in 2000. In 2003 a store measuring 225 000 feet was established in Chicago and another one measuring 250 000 square feet was erected in Indiana in 2005. The company also built manufacturing plants in Lowe and Ohio. Apart from the home improvement industry, John Menard also owns ‘team Menard’ which is an Indy car racing team. Through this team, the company has managed to market its products at both the local and international levels.
Sears Holdings was formed in the year 2005 after the two companies, sears Roebuck and Kmart merged. It is the third-largest retailer in America with an average of 3798 stores across the nation. It is a company that gives Lowes serious competition in the share of customers. In North America, Sears is the leading retailer outlet in home appliances. The key brands of this company are; Kenmore, Craftsman, and Diehard. Compared to Lowes, sears is the largest service provider in repairs with recorded annual calls of thirteen million. This company gained more of its strength in the mergers, thus putting it in a better position to attract more customers.
To deal with such increasing competitors, the Lowes home improvement company continues to enhance its vision and promises by offering its products at a much lower price and interacting with their customers as frequently as they can to provide them with the services that they need (Yost, 2007). The company is only faced with the challenge of the already existing similar stores as there is no sign of a new competitor immerging. This is due to the high capital requirements for a national home improvement company. This places the company at a somewhat prepared challenge that it needs to deal with
The company however faces some moderate competition from other substitute companies that deal in a particular line of production. Such companies include; Maytag appliances, Wal-Mart, and Costco. Most customers also prefer electricians and plumbers who are trained in the field to install and repair their appliances which will make the company lose some of its customers.
One of the main challenges of Lowes home improvement company is that it is mainly a distribution center. It has to buy its products from about seven thousand vendors. The other bigger home builders companies may prefer to sell their products directly to their customers by establishing their retail outlets. This means that, if the companies supplying products to Lowes decide to establish their outlets, then the company may not have much business to do. All in all the company remains to be preferred by many customers and its profit margin has continued to grow. It is also determined to establish more branches nationally and internationally. It is expected that if the company continues to utilize modern technology in its marketing strategy, it will attract many more customers. (Yost, 2007)
References
Golin A. Trust or consequences: AMACOM Div American Mgmt Assn, 2003 pp 18-25.
Wright J. Fixin’ to Git: Duke University Press, 2003 pp 20-30.
Yost M. The 200-MPH Billboard: MBI Publishing Company, 2007 pp 9-15.