Variety Wholesalers Competition
Now Viewing Variety Wholesalers's competition in: Discount Stores (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who are the company's typical customers? - Because discount department stores carry a wide variety of merchandise, customers span a broad demographic. An important customer group is value-oriented women 25 and 54, particularly those with children.
How does customer income affect the company's operating strategy? - Customer income can vary: Wal-Mart customers tend to have lower incomes, while Target's tend to be more affluent.
What are the company's most effective marketing vehicles? - Marketing and promotional vehicles include TV, print, and newspaper advertising; newspaper inserts; and direct mail.
How important are advertising allowances? - Companies may receive advertising allowances from suppliers for product-specific promotions.
What are the company's most popular merchandising events? - During themed merchandising events, such as Super Bowl or Valentine's Day promotions, stores may build elaborate product displays to create excitement and drive sales.
How does the company encourage customer loyalty? - By offering special rewards and discounts to proprietary credit card holders, Target encourages customer loyalty and frequent purchases.
What role does the Internet play in the company's marketing strategy? - While discount department stores were slow to embrace the Internet, companies now operate retail websites, which complement in-store merchandise, advertise promotions, and help drive traffic.
How is the company's website linked to the company's stores? - Discount department store sites may offer web-only promotions, allow customers to check product availability or pick up or return Internet purchases in stores. Some companies have used Internet sites to identify sales trends in advance of when merchandise hits retail.
What is the average discount for merchandise in the company's stores? - As part of a value-based strategy, Wal-Mart uses everyday low pricing (EDLP), with discounts of about 20 percent.
What is the company's competitive advantage? - Discount department stores carry a wide range of merchandise and compete with a diverse set of retailers, including department, drug, grocery, off-price, outlet, and specialty stores; warehouse clubs; and Internet and catalog retailers.
Competitive Landscape
Population growth and consumer spending drive demand. The profitability of individual companies depends on efficient supply chain management, effective merchandising, and competitive pricing. Large companies dominate the industry, and enjoy advantages in purchasing, distribution, and marketing. Average annual revenue per worker is $175,000.
Business Challenges
CRITICAL ISSUES
Competition from Alternative Retailers - Because discount department stores carry diverse merchandise, companies compete with a wide variety of retailers. Department and specialty stores periodically mark down merchandise, resulting in comparable or better pricing. By offering deep discounts on a limited assortment of goods, outlets, off-price stores, and warehouse clubs attract price-conscious consumers and bargain hunters. Internet retailers can offer extremely competitive pricing due to low overhead. For groceries, supermarkets are typically more convenient and provide better selections.
Dependence on Consumer Spending - Consumer spending drives sales of many key categories in discount department stores. While sales of consumables, such as toothpaste, shampoo, and paper towels, are fairly recession-proof, discount department stores depend on other more economy-sensitive categories, such as apparel and toys, to increase a customer's total purchase. When money is tight, consumers make fewer impulse buys. During the last recession, discount department store sales decreased almost 2 percent, while total retail sales grew.
Industries Where Variety Wholesalers Competes
- Retail
- Discount & Variety Retail(primary)
