CASE 1 – Tractor Supply Company
Synopsis: Tractor Supply Company (TSC) is a relative large, but unknown retailer that targets people seeking a rural lifestyle that operate farms or ranches as hobby.
What is Tractor Supply Company’s growth strategy? What retail mix does TSC provide? TSC targets the hobby farmer/rancher, who are fully employed in jobs but want to enjoy a rural lifestyle and operate a farm or ranch in exurbs of a city. The retail mix of TSC is: •
Location – stores are in stand-alone location in commercial corridors in the exurbs •
Merchandise assortment – stock a wide variety of merchandise that provides everything the hobby farmer/ranchers needs. Probably shallow assortment •
Pricing – since competition is limited, TSC has flexibility in pricing – offer good, better, best price/quality tiers. EDLP •
Communication mix – emphasis on personal selling
Store design and layout – spacious layout, informative signage •
Customer service – highly trained sales associates
How has TSC’s target customers changed over time? Why?
Originally targeted full-time farmers but as the farming industry consolidated, the large farms bought directly from supplier bypassing retailers like TSC 3.
How vulnerable is TSC to competition? What companies represent its primary competitors? Not very vulnerable because the target segment is not price sensitive or very knowledge about the products it needs. Thus the target market is unlikely to be attracted to a low cost, low service retailer like Walmart. In addition, each rural area is relatively small and thus there is probably not enough business for multiple retailers targeting the small market with the same offering. Thus, after TSC enters a market, there would not be enough business in the market to entice a competitor to enter. 4.
Why does TSC place so much emphasis on training employees? Customer service is critical because the customers in the target market are not very knowledgeable...
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