Lowe's Case

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MBAS831 Aug. 2012, Case Assignment, 10071193 1. Challenges faced by Simpson and his team: Lowe’s initiative called the next generation installed sales (NGIS) is a relatively new

effort by Lowe’s to expand their service offerings to become an end to end solution provider for customer’s kitchen remodeling projects. The main challenges faced by Simpson were how to move into kitchen remodeling business? and how to position Lowe in the market? Another challenge was how to reach the customers. With NGIS there is a greater emphasis on customer interaction, this can be achieved by creating an integrated marketing communications plan that would combine the traditional as well as emerging marketing communications channel. The key challenge here was to create the integrated marketing communication plan with the right mix of traditional marketing & digital marketing and choosing the best digital marketing tactics among the various choices available. The NGIS initiative calls for a different approach to customer management, traditionally customer interaction was minimal but with NGIS there is a greater customer interaction and how to handle this customer interaction was a major challenge as Lowe’s do not have expertise in this area. In NGIS process, Lowe’s would coordinate the project from start to finish (and beyond) by involving third-party contractors. Each independent service provider would undergo the rigorous training in the Lowe’s way. Managing the entire thirdparty contractor client interaction represented a challenge and risk to Lowe’s. In the customer survey (Case Exhibit 4 – 9) only 8% of customers preferred Lowe’s. The key challenge to Simpson and his team was to change this perception. Research into preliminary customer experience map (Case Exhibit 5) reveals that the customer interaction with Lowe’s at the initial Incubation/Visioning phase as well and the post completion phase is non-existence. Simpson and his team need to change this and actively engage the customer during the initial and post completion phases. How to do this represented a challenge to Simpson and his team. In the customer buying cycle, the initial long incubation period that typically preceded a kitchen remodeling project is very important. Lowe’s need to stay on top-of-mind for perspective customers and this represented a challenge as to how it could be achieved. Further drilling down, Simpson and his team need to figure out what was the customer decision process for a kitchen remodeling project and what information and messages were customers looking for at each stage. Knowing the customer decision process and providing them with relevant information is a challenge that Simpson and his team faced. Another 1|Page

MBAS831 Aug. 2012, Case Assignment, 10071193 major challenge that Simpson and his team faced was to tailor the marketing campaign to the customer experience at each stage of the buying cycle. 2. Competitive Landscape & Lowe’s reaction to the competitive landscape: The U.S. kitchen renovation market was worth $17 billion and growing annually. The kitchen renovation market 75% of kitchen remodeling projects were done by professionals and 25% were done by home owners. The home renovation industry was a highly fragmented one with 30% of market belonging to small private players and the rest to professional companies, home product retailers and kitchen design and installation boutiques. The major professional players were Home Depot, Menards, Sears, Ikea and Studio 41. Home Depot had the first mover advantage as they entered the market by 2005. They primarily targeted the lower income groups. Menards were primarily concentrating on material supplies. Sears was focused on appliance sales rather than kitchen remodeling. Ikea had captured a significant share of the kitchen renovation market but they offered their services only in the areas of related carpentry, plumbing, and electrical work; floor installation (Case Exhibit – 3). Studio 41...
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