Business Report - Kmart 31280680
This business report has been created for Kmart Australia in regards to their marketing strategy. Since opening its first Australian store in 1969, Kmart has experienced a near fatal bankruptcy issues and little break through in the market. However, the business is now nationally for everyday products at the lowest prices and is one of the most profitable discount stores due to its rebranding. In recent years, Kmart has experienced an exponential growth in sales and increase of market percentage. In the last eight years, Kmart has averaged a compound growth rate of 120%.This is due to its new EveryDay Low Price (EDLP) pricing strategy and mass digital promotion style brought on by its new management. This report will show why Kmart’s current marketing strategies are effective.
Kmart’s main promotional strategy is through mass media advertising via TV and internet based ads and marketing campaigns. The reinvention of Kmart’s promotional strategy has been a success and has reinvented how consumers perceive the brand by aiming for an image of pride to shop rather than because of a lack of means. The development of the brand image from a discount store to an everyday low price store has been achieved by their promotional strategy by creating what is known as the ‘cult of Kmart’. The aim for Kmart’s new advertisement has been achieved shown by comparing store visits levels before promotional changes. “Total annual visits increased by 20% over the next two and a half years, while the number of items sold increased by 42%. Last, EBIT increased by 30%.” [footnoteRef:0] [0: "1 Repositioning Kmart - UQ Business School." https://www.business.uq.edu.au/sites/default/files/events/files/john-roberts-abstract.pdf. Accessed 17 Nov. 2018.]
The new range of advertising encompasses TV and youtube ads focusing on the new EDLP strategy during family programs and prime times for children’s programs. To achieve customer interest, Kmart uses high energy songs, unique camera work and directly focuses on the prices of products. In addition, Kmart often uses children as models but also ranges to groups with differing ages to attract families. The business also features children with disabilities, some with down syndrome, hearing aids and ankle braces who model a range of ‘back to school items’. They also advertise typically “gender specific” items to both genders by using both male and female models. This has created a reputation of being inclusive and therefore, more attractive. Kmart’s reinvigorated promotional strategy has proven to be successful in creating consumer interest and loyalty. In addition, Kmart has seen great social media success and enthusiastic responses in its products from dedicated social media accounts showing off products with “Kmart hacks”, styling tips and tutorials. This free publicity has assisted Kmart in spreading brand awareness as social media interest has gone...