Executive summary
The report examines the marketing mix applied by Nordstrom Inc., which is one of the retail chain stores in luxury products. Retail chain is one of the highly competitive industries particularly among firms dealing in luxury and fashionable products.
The report provides recommended marketing mix as one of the consumer behavior principles to be applied by sales management of the company to enhance its competitiveness. The report is based on the marketing survey data collected from the customers, employees, and managers of different chain stores of the company in various states.
Nordstrom Inc. is one of the American upscale chain stores retailing in fashionable products ranging from accessories to women and men’s wear. From the beginning, the company was known for its specialty in shoes. However, the company has expanded its product range and currently retailing in all manner of fashionable products including accessories, garments, ornaments, and bouquet. The company has not only expanded in terms of product range but also in geographical coverage.
Currently, the company is operating retail stores in over thirty-three states in the USA and plan to open another line store in Canada. Nordstrom Inc. is the luxury products retailer that has the largest number of stores as well as geographical spread compared to the major competitors such as the Bloomingdales and Marcus. The company is currently leading in terms of market share with over forty-five percent.
The product strategy recommendation
The company deals in varieties of fashionable products ranging from both women and men’s wear to jewels. As such, the company should utilize its innovative capabilities to ensure the development and sale of new products that offer varied choices for customers (Kotler & Armstrong, 2013). Moreover, the auxiliary functions of the products should be improved to suit the customer needs and bring convenience, which is a mixture of value and quality.
Further, product differentiation is critical amid intense competition particularly in new markets where the company plans to establish new stores. The company should differentiate its products in terms of augmented value, placing and pricing. In other words, the company should ensure that the products have additional value beyond the expectations of the customers (Kotler & Armstrong, 2013).
Moreover, the products should be placed at the customers’ convenience. In essence, the firm should ensure that the customers receive their desired products at the right time and place even if it means delivering the products at the customers’ doorsteps.
In the presence of increased competition, the company should ensure that its products are affordable to the target market. The affordability of the product should be accompanied by the form differentiation. The company should ensure that the products are displayed according to the sizes and reflect shapes that are considered by the customer as of superior quality (Kotler & Armstrong, 2013).
Moreover, according to the customers, the products should be given the right specifications or conformance quality. In fact, the customers’ expectations are that the products should meet the specified functions or add beauty according to the specifications.
Most importantly, the firm should stock stores with durable products particularly those targeting older age segments. Unlike fashionable products that target the middle age groups segment, the older age prefers products that are durable and of high quality. Since style goes with beauty and quality, the store should ensure that its products are the most stylish in terms of looks and feelings.
Moreover, the style should also be accomplished with appropriate designs that appeal to the customers (Solomon, 2012). Generally, product differentiation in terms of form, features, performance quality, durability, reliability, style, and design are critical for the company amid intense competition.
Price recommendations
As indicated, Nordstrom Inc. faces stiff competition from various fashion and apparel stores as well as small retail shops. Therefore, pricing differentiation strategy provides a critical competitive advantage.
Apart from the product range, the store should also have the right price for its products to encourage the purchase of products so that the company can realize increased profits (Cole, 2013). In essence, price is a critical element in the marketing mix since it creates sales revenue. Price is not only used in the marketing mix but also the product development as well as managerial decisions.
Theoretically, prices of items are determined by the consumers’ willingness to pay (Kotler & Armstrong, 2013). However, costs involved in the production, sales, distribution, and management should be considered. Most importantly, the firm should consider the value of the product and the motivation of the customers to pay for the product. In other words, the prices of the firm’s products should be perceived by the consumers as commensurate with the value or quality of the products (Kotler & Armstrong, 2013).
As expected, the quality and value addition attract high prices. However, prices of the company’s products should be middle-high with some of the products targeting high-end customers while others are supposed to be made for low and middle incomers. The high-quality low-prices strategy should be applied particularly to outperform the competitors.
In addition, the product and pricing strategy should be aimed at widening the spectrum of customers the company is targeting (Solomon, 2012). Before, the company was targeting customers at the high-income level. Nevertheless, with the entry of more competitors, the company should widen its scope and capture middle and low-income clientele.
Distribution recommendations
The firm marketing management should realize that creating the right marketing mix also involves offering the products at the right place and time (Cole, 2013). In other words, clients should get the products when are in need and at the most convenient place. Therefore, the business should ensure that the products are stored at the right quantity and distributed within the shortest duration.
The firm should ensure that the products are made available to the clients at the cheapest costs possible. Essentially, the company should choose the distribution system that is less costly and convenient. In principle, the distribution system should have an insignificant effect on the final prices of the products (Solomon, 2012).
Since customers are very sensitive to the prices, the company should adopt the business to the customer distribution channel. Business to customer distribution channel enhances direct contacts with clientele and reduces the distribution costs that would negatively affect the prices of products. In other words, the company should open stores near their target customers to ensure direct distribution of the products (Solomon, 2012).
Direct interaction with the customers would also enable the company to develop products that suit their needs. Moreover, the direct sales of the products will enable the company has expanded market share. However, the company’s stores, both physical and online are still limited. Therefore, the company should expand its distribution stores to reach all manner of customers.
Marketing communications recommendations
Marketing communication mix involves the activities and processes through which the business communicates the presence of the products to the potential and existing customers (Kotler & Armstrong, 2013).
In most cases, businesses utilize promotional methods including advertising, sales promotion, public relations, and direct marketing to enable the potential and existing customers informed about existing products. However, the business should utilize the most appropriate communication mix that would optimize the sales’ goals.
Nordstrom should utilize a mixture of various promotion strategies including advertising, public relations, sales promotions, and personal selling. In particular, the retail chain should emphasize on personal selling since customers need direct touch with the company sales personnel for further clarification on certain products. Personal selling would be the most appropriate particularly on the racks and the chain stores’ floors.
However, the firm should also utilize innovative advertising to attract and inform its customers about the company products both in mass and digital media. Besides, the company should utilize corporate social responsibility to appeal to many people as a method of maintaining its public relations. The success of the company on public relations will improve goodwill and attract public attention. Further, the company should provide special offers as a good way to stimulate and retain its customer’s loyalty.
Conclusion
Even though the company has been using various marketing mix strategies, according to the study findings, Nordstrom should enhance the utilization of various marketing mix strategies to position its products in the highly competitive apparel and fashionable products market. The firm should include in the marketing mix the current product and pricing strategies, placing strategies and communication strategies.
References
Cole, A. (2013). The implications of consumer behavior for marketing: A case study of social class. Munich: GRIN Verlag.
Kotler, P. & Armstrong, G. (2013). Principles of marketing. Upper Saddle River, NJ: Pearson Education.
Solomon, M. R. (2012). Consumer behavoir; Buying, having, and being. Upper Saddle River, NJ: Pearson Education.