Strategic Marketing, MKT 501
Module #4 - Case Assignment
"Product Promotion: Kmart & Heineken"
Product promotion and target marketing is clearly the approach taken by the two companies in this modules reading. Although Heineken and KMart are promoting two completely different types of products they are "targeting" their promotions to specific markets.
For years, Kmart has struggled to find a niche between Wal-Mart's low prices and Target's cheap chic. Kmart's biggest failure was last year's price war with Wal-Mart which helped land the company in bankruptcy court. Now, in its bid to survive, Kmart is latching on to the one advantage it has over its discount rivals: stores in heavily populated urban areas. That means catering more to multicultural consumers, who already make up nearly 40% of Kmart's sales. With 40% of Kmart's annual sales coming out of the pockets and purses of African-American, Asian, Latino and Native American shoppers, it's no wonder that chairman Jim Adamson views multicultural urban markets as a key niche in which the retailer can differentiate itself from the competition.
"No other retailer gets as high a percentage of its sales from multicultural customers," says Adamson, referring to Kmart's main competitors, Wal-Mart and Target.
KMart is currently trying to save as many urban market units as possible. Despite its recent retail bankruptcy filing in January, Kmart has been quietly increasing its efforts to entice a more multicultural customer base for the past year. By creating a new ethnic merchandising position, hiring an agency to handle advertising to ethnic communities, and debuting new "Slice of Life" TV commercials directed by Spike Lee, Kmart recognizes it must better understand and meet the needs of a wildly diverse customer base. Kmart is not alone among retailers trying to serve a nation of consumers that has changed dramatically in...