1. Situation Analysis
First one must analyze the capabilities of the firm and its ability to develop and implement a successful promotional program. The successes and failures of past programs must be analyzed as well. Pier 1 Imports kept its focus throughout the years. Pier 1 opened its first store in 1962 in San Mateo, California. Its objective has been to offer the consumer distinctive items. The company has been successful with that marketing plan. The company started in 1962 with one location, and today Pier 1 has more than 1,200 locations. Since the company has been around for 51 years, and has established the strong socially responsible image they do not have to focus on their company image as much as an upcoming company. The company has seen twelve straight quarters of sales and growth profit with Alex Smith as the CEO since 2007 (Dishman). The most recent advertising slogan that Pier 1 has implemented is “Find What Speaks to You” (Pier 1). The purpose of a situational analysis is to understand the marketing problem. An analysis is made of a company and its competitors on the basis of: 1. Size and the share of the total market:
a. Pier 1 is in competition with Bed Bath & Beyond Inc. which occupies 34.3% of the market, and Williams-Sonoma Inc. which occupies 7.5% of the market, while Pier 1 controls approximately 4.3% of the market. 2. Sales history, costs, and profits:
a. “In April 2007, Pier 1 Imports implemented a turnaround strategy that involved improving merchandise assortment and margins, while reducing inventory and associated operational costs. However, such an attempt has not been fruitful, with reduced consumer spending since the recession significantly hurting the company's overall sales. To this point, revenue is expected to fall at an annualized rate of 0.5% over the five years to 2013 due to declining same-store transactions and closures of underperforming locations. As economic conditions continue to improve, however, IBISWorld projects that the company's consolidated revenue will experience strong growth. From 2012 to 2013, industry-specific revenue is expected to increase by 3.0% to total $1.3 billion.(Jose)” 3. Distribution Practices
a. Pier 1 uses and indirect channel of distribution. This company imports a selection of unique products from India, Vietnam, and 58% of its merchandise is distributed from China. This leaves the company vulnerable to variations in the value of the dollar and other trade disruptions. The large amount of merchandise received from China can also affect Pier 1 in the future as the Chinese labor wages are likely to increase, which can also cause the sourcing costs for increase for Pier 1. 4. Methods of Selling
a. Pier 1 sells online as well as in store. The recently new CEO Alex Smith has chosen to put forth more money into making the store environment and the service offered more pristine. Although he knows that e-commerce is the cutting edge of how many consumers shop today. He still believes that seeing the products that Pier 1 offers on a small cell phone screen does not do the company and its products justice (Dishman). Therefore, he has spent more money in renovating current Pier 1 stores and opening new ones in the heavily populated areas. 2. Campaign Analysis
Pier 1’s current slogan is “Find What Speaks to You”. Pier 1 Commericals with 'Find What Speaks to You' Slogan That slogan is on the advertisement that was broadcasted on many different television networks. Those few lines are what many consumers think when shopping for home décor for their own homes. Most shoppers choose pieces and items that reflect their own personalities, or things that reach out to them. The ad is effective because of that. Each home is decorated uniquely and Pier 1 advertises for that unique touch that each consumer strives to ad to their home décor. Additionally, the ad declares to “Find What Speaks to You” this also suggests that it is that simple...
Cited: Dishman, Lydia. "Why Pier 1 is Choosing Bricks Over Clicks -- And Winning." Forbes. (2012): n. page. Web. 30 Jul. 2013. .
Jose, Eben. "Home Furnishing Stores in the US." IBIS World n.pag. Southeast Missouri State University. Web. 30 Jul 2013. .
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