K-Mart

K-Mart

Kmart is the #3 discount retailer in the United States behind

Wal-Mart and Target. Kmart sells name brand and private label

merchandise, mostly to low and mid - income families. It has more

than 1,800 stores and currently employs more than 220,000

associates in all 50 states, Guam, Puerto Rico and the U.S. Virgin

Islands and owns an e-tailer BlueLight.com. As of Jan.30,

2002,Kmart had 124 Kmart Supercenters that combine a full grocery,

deli, bakery, video rental and 24 hour/seven-days-a-week

availability along with the general merchandise selection of a

Kmart discount store.

A core strength for the company continues to be the

expansion of Kmart Exclusive brands such as Martha Stewart

Everyday, Sesame Street, Jaclyn Smith, Kathy Ireland, and

Route 66. These brands-nationally available only at Kmart-

have progressively added to their assortments.

Despite that, the company filed for Chapter 11

Bankruptcy protection on January 22, 2002, after a year in

which its financial performance declined from unimpressive

to bleak. The filing came a day after Kmart's major food

distributor, Fleming Cos., said it had cut off most

shipments to Kmart because the discounter failed to make

its regular weekly payment for deliveries. Fleming said

Kmart, its largest customer, owed $78 million. This

bankruptcy filing let Kmart rid itself of unprofitable

stores and shrink the payroll. The company has closed 284

unprofitable stores and laid off about 22,000 workers to

pare costs. Kmart stores have fallen as consumers have

slowed their spending and as rivals like Wal-Mart Stores

and Target have tried to siphon off Kmart's customers.

In this paper, I will try to suggest some solutions to

improve Kmart as a company as a whole and help increase

its sales.

First of all, Kmart needs to improve its marketing

technigues. The problem that it's facing right now is

decreasing sales. What I think it should do is lower the

prices. It will definitely attract more customers. For

example, the reason that one of Kmart's biggest

competitors, Wal-Mart is doing so well is because Wal-Mart

is known for its very low prices. Also, I think that Kmart

should increase eye-capturing advertising. Not only should

they increase the advertising, but they should try to

appeal to different kind of customers. Kmart should make

sure that its advertisements attract not only middle-aged

population-mostly housewives, but it ought to attract more

hipper/younger consumers. In addition, it needs to provide

better quality of items. One main reason why Target is a

successful retailer is because it offers designer items

and contemporary fashion at affordable prices. I believe

that Kmart will have more high-class customers if it will

be willing to improve the quality of items it offers.

Kmart should also attract customers by offering coupons

and discounts. For example, Ames offers 10% senior

discount. I'm sure that offering discounts will trigger

more customers based on my own experience. I used to work

for Associated Supermarkets and every Wednesday we offered

10% senior discounts, and by doing that we gained a lot of

elderly customers, which drove our sales up.

The other problem with Kmart is that its open to the

same type of shoppers. They should attract more

diversified customers. Kmart should do more to accommodate

the increasingly diverse character of its shoppers. It

needs to adapt its stores, from the layout to the stock to

the personnel, to make them more welcoming to the

immigrants. In traditionally white neighborhoods, Kmart's

customer base is 30 percent Asian and 20 percent Latino,

and yet often they make no

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