Case Study Analysis: Kmart, Target, and Big W

This study analyzes the performance of Kmart, Target, and Big W in terms of marketing mixes, value creation, and socially responsible practices. It identifies challenges faced by each brand and their strategies for improvement.

Running head: CASE STUDY ANALYSIS
Case Study Analysis
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1CASE STUDY ANALYSIS
Executive summary
Marketing mixes, value creation and socially responsible practices are all important for the
business. These practices have now become integral to the business. The main purpose of this
study is to analyse “Kmart”, “Target” and “Big W” for their performance in respect to
marketing mixes, value creation and socially responsible practices. The study finds that
Kmart faces challenges falling Australian dollars. The study identifies that Target has
confused product-positioning strategy. Big W is struggling to edge past Kmart, which also
follows a similar business model. Kmart creates values by offering the lowest price. Target
creates value through quality. Big W generates value through both the product quality and
pricing. The study identifies that all Kmart, Big W and Target have respective flaws in their
work practice. All these discount department stores have started taking initiatives to improve
their environmental and socially responsible performance.

2CASE STUDY ANALYSIS
Table of Contents
Introduction................................................................................................................................3
Q1: Marketing Mixes.................................................................................................................4
Analysis..................................................................................................................................6
Q2: Value Creation....................................................................................................................8
Q3: Corporate Social Responsibility (CSR)..............................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................12

3CASE STUDY ANALYSIS
Introduction
Discount department stores provide a fair good opportunity for shoppers to get many
things under one roof. In such stores, customers have a wide variety of product line to choose
from. Moreover, they get discounted rates such as in the format of "Everyday Low Price
(EDLP)". The discount department store shopping format is very popular in Australia. The
potentiality of the sector drew the attraction of major Australian retailers like Woolworths
and Wesfarmers towards this industry. Woolworths has its subsidiary business operating as
“Big W” whereas Wesfarmers as “Target and Kmart” (Grimmer 2018). The discount
department sector had been profitable for these three major Australia brands until recently
being affected by increasing competition from foreign players and online shopping service
providers (Mortimer et al. 2016). Now, the one with better capability to analyse the market
situation and capacity to innovate should be in a good position.
The main purpose of this study is to compare three major discount department stores
brands Kmart, Target and Big W. Kmart remained more profitable as compared to the other
two in consecutive years in the past. However, the recent performance has not been very
impressive for Kmart and the question arises like “will the recent performance failure make
rooms for Big W and Target to occupy”.

4CASE STUDY ANALYSIS
Q1: Marketing Mixes
This section tries to know the marketing mix strategies of Big W, Target and Kmart.
Kmart:
Notably, one of the key methods was aimed towards an additional targeted and more
efficient “back to basics” product line strategy that resulted in a huge reduction in product
lines. The product line slashed from 50, 000 to around 12, 000. Streamlining the merchandise
strategy had effects in different areas such as simplifying the aspects of in-store
commercialism, stock management, sourcing and supplying (Wesfarmers.com.au 2019).
Kmart shifted and maintained offering products at a permanent low-pricing strategy.
When Russo took the charge he ensured to dismantle the ineffective structure of the stores.
Kmart has always ensured keeping the prices low despite being popular as a brand that offers
products at low-price. It was more because competition has continued increasing in discount
department stores in Australia. Low pricing is losing its quantum as due to the falling
Australian dollars (Wesfarmers.com.au 2019).
Kmart moved to a direct-sourcing model and reduced the number of suppliers that
Kmart was earlier dealing with. Kmart excluded the middle-man from the supply chain and
instead start dealing directly with makers. Kmart does in-source a range of inexpensive
materials from the makers in China, India, and Bangladesh (Wesfarmers.com.au 2019).
It is to be noted that the biggest revelation for Kmart has been its capability to
understand its customers and the capacity to innovate. It generated a huge response to its new
homewares and fashion lines. It did so through social media. Notably, there are growing
numbers of websites, Instagram accounts and Facebook pages especially devoted to "Kmart
hacks" (Wesfarmers.com.au 2019).

5CASE STUDY ANALYSIS
Target:
The product strategy as adopted by Target is a little different from those adopted by
Kmart. Target offer quality products at competitive rates; however, do not compete with the
likes of Big W and Kmart in terms of EDLP strategy. It sells various products such as
clothing, cosmetics, fitness, electronics, consumer electronics and homewares
(Wesfarmers.com.au 2019).
The product positioning strategy looks confusing to customers as the company brands
its image like the one offering products at a low price. Notably, it also sells premium priced
products. There should be a clear branding of the image (Wesfarmers.com.au 2019).
Target, unlike Kmart, has a long list of suppliers in Australia. Due to confusing
product positioning. the company faces a challenge in terms of supply. The company sells its
products at its stores; however, they need to make a clear distinction between the ranges of
products (Wesfarmers.com.au 2019). They must decide whether to continue with the same
product positioning strategy or target either low or mid-segment market.
Target aggressively accomplishes refurbishment of stores as part of its marketing
strategy. It uses various alternative channels to promote the brand and advertise the products.
Some of these alternative channels are internet and social media tools (Wesfarmers.com.au
2019).
Big W:
The product strategy of Big W is very much similar to as adopted by Kmart. Big W
follows the EDLP strategy and sells various products such as clothing, cosmetics, fitness,
electronics and homewares (Woolworthsgroup.com.au 2019).

6CASE STUDY ANALYSIS
As stated earlier, Big W follows the EDLP strategy to determine the pricing.
However, the business is now shrinking as Woolworths has finally announced to close 30 of
Big W stores after a series of declining sales (Theconversation.com 2019).
Big W operates through a widespread chain of 183 stores. However, some of these
stores will soon be closing as confirmed by Woolworths (Theconversation.com 2019). The
stores of Big W is clean and attractive as well. The selection of location is very dependent on
the fact that customers like visiting the stores. At its stores, staffs are trained enough to guide
customers through every possible step.
Big W is a subsidiary business of Woolworths. IT uses social media channels to
promote to brand the image and introduce new products to target consumer segment. It
increases its brand visibility through newspapers, magazines, radio, billboards, newsletters,
leaflets and hoardings. The visibility is increased through mobile apps, Facebook page,
YouTube and Twitter account (Woolworthsgroup.com.au 2019).
Analysis
Based on the information as furnished in the above section, few things could now be
concluded. First, the discount department sector is increasingly meeting with industry
competition fuelled by various foreign retailers like H&M and online retailers in the form of
Amazon (Abc.net.au 2019). This is a very tidy situation for brands in discount department
sector. Ensuring the timely use of innovation in the various operative environment is going to
be a key factor against the rising industry competition. Essentially, there is a need to master
supply chain operations. Moreover, value creation in terms of the shopping experience at
stores, checkout process and after-sales support service is a growing urgency. Kmart is
finding it difficult to keep offering products at low-prices as the profit margin has now
reduced. Due to the falling Australian dollars, Kmart has to reduce the pricing on a constant

7CASE STUDY ANALYSIS
basis. This is affecting the profit margin for Kmart. Target needs to work more on its product
positioning strategy to attract more consumers. Big W should streamline its supply chain
operations and refurbish the stores to make it look attractive. Moreover, there is a need to
strengthen its marketing capacity.

8CASE STUDY ANALYSIS
Q2: Value Creation
Kmart:
Kmart has a huge network of stores spread in Australia. The number of stores is 289
in Australia (Wesfarmers.com.au 2019). Hence, it is easily accessible to consumers as
compared to Target and Big W. It sells only in-demand items and customers know exactly
what values they will be getting by being there in Kmart’s stores. Kmart along with Big W is
the cheapest discount department stores in Australia. Kmart ensures selling cheaper but
quality products. Hence, Kmart creates value in this way also. Kmart possesses the capability
needed to master the supply chain operations. It is evidenced in the fact that the company
streamlined its product portfolio and sells items only those that are in-demand
(Wesfarmers.com.au 2019).
Target:
Target unlike Kmart and Big W sells quality products at the most competitive price. It
is very different from its close rival Kmart and Big W. Hence, consumers have something in
Target’s stores in terms of product quality. The product line is very huge even larger than
Kmart and Big W. Hence, consumers have ample option to choose. There is no need for
going to different places for buying different products. Indeed, consumers have most of their
basic products under one roof in a Target store. This is how Target creates values for its
target consumer segment (Wesfarmers.com.au 2019).
Big W:
Big W is very much similar to Kmart and is difficult for customers to recognise any
differences between these retail brands. Big W also creates values through cheaper pricing.

9CASE STUDY ANALYSIS
Customers will get their products at a pretty lower price range. Big W is a subsidiary business
of Woolworths and hence, the company is able to manage and deliver the utmost quality in
relation to the products and services (Woolworthsgroup.com.au 2019).
Q3: Corporate Social Responsibility (CSR)
Kmart:
Kmart is involved in a kind of socially incorrect practices. The company asks its
workers to work long hours. Despite this, they are not paid fair payments. Working
conditions is not also very attractive (Price 2016). Kmart reportedly has low concerns
regarding water pollution. This means the company has concerns for making the profits only;
however, do not too much care about the effect their operations create on the environment.
Kmart has not so far done any notable thing in regards to reducing its greenhouse gas effect.
The leftover clothing is not properly displaced leading to wastes. The leftover clothing could
have been recycled to create a positive environmental impact (Wesfarmers.com.au 2019).
However, Kmart seems like responding to its environmental concerns. Kmart has made
commitments for and announced to use 100% sustainable cotton by 2020
(Cottonaustralia.com.au 2019). This initiative has received appreciation from the Australian
cotton industry (Cottonaustralia.com.au 2019). There is a need for more of such initiatives to
be taken from Kmart.
Target:
In a likewise manner, Target also suffers from not so good employee reviews.
Workers have to work under stiff work pressure. The working duration is quite long. On the
other hand, the salary paid to workers is not very attractive as well. Target faces
environmental challenges as well. There is a need for innovation in stores and across the
operations. In stores, Target can consider replacing the non-renewable form of energy with a

10CASE STUDY ANALYSIS
renewable form of energy. There is a need to work closely with the logistics team to track the
working conditions of vehicles. Moreover, if required the team of experts can also go for new
vehicles, which are more environment-friendly (Wesfarmers.com.au 2019). This is
practically difficult to replace the entire fleet of vehicles with the new ones; however, they
should gradually think of reaching this. Target is taking initiatives to improve its
environmental performance. The company is investing in communities where they operate to
become a socially responsible business entity. They are also trying to become more energy
efficient. Waste minimisation is under progress. Target ensures ethical sourcing of products
and services, which are offered to customers. Moreover, the sourcing of materials from
sustainable sources is under process (Target.com.au 2019).
Big W:
Similar to Target and Kmart, Big W does not provide healthy working conditions.
Some of the job positions have very tidy work schedules. In particular, floor sales executives
have to work long hours. However, the pay structure is not very attractive. As a result, there
is significant attrition in the company. Big W should do something to attract new employees
and retain those who exist. Notably, Big W is not the only shopping store. Rather, people
have enormous options in the form of major and reputed retailers like Woolworths, Coles,
Aldi, Target, Kmart, H&M and so forth (Theconversation.com 2019). Hence, it is important
to notice all these things and adopt strategies, which are attracting employees.
In terms of environmental performance, Big W is taking some serious and impactful
initiatives. Big W is about to ban all those plastics used to carry a single product
(Theguardian.com 2019). Instead of single-use bags, Big W will use thick plastic and
reusable bags. This means they are heading towards controlling their wastes by promoting the
use of recyclable items.

11CASE STUDY ANALYSIS
Conclusion
To conclude, it can be said that marketing mixes strategies as adopted by Kmart,
Target and Big W have flaws. Kmart is struggling to keep the pricing low due to falling
Australian dollars. Target faces challenges in the form of unclear product positioning
strategy. Big W faces the impact of Kmart, which also follows a similar business model as
followed by Big W. Kmart create values by offering products at the lowest price. Target
delivers quality in terms of product quality. Big W delivers values in terms of product quality
and pricing. All Kmart, Big W and Target have flaws as far as fair work practice is
concerned. Kmart has planned sourcing 100% sustainable cotton. The move also received
appreciation from the Australian cotton industry. Target is moving towards ethical and
sustainable sourcing of materials. Big W will soon be banning the use of single-purpose
plastic bags. Kmart loss in recent times is not going to be the wins for Target and Big W
unless they have more streamlined supply chain operations, and are capable to become a
socially responsible business. Kmart, on the other hand, should continue practicing the EDLP
strategy to remain profitable in the long-term.

12CASE STUDY ANALYSIS
References
Abc.net.au 2019. Dozens of big-name Aussie retailers shut down by foreign competition.
[online] ABC News. Available at: https://www.abc.net.au/news/2019-02-21/australian-
retailers-shut-down-by-foreign-competition/10832062 [Accessed 1 Jul. 2019].
Cottonaustralia.com.au 2019. Cotton Australia welcomes Kmart Australia’s commitment
Sustainable fibre | Cotton Australia. [online] Cottonaustralia.com.au. Available at:
https://cottonaustralia.com.au/news/article/cotton-australia-welcomes-kmart-australias-
commitment-sustainable-fibre [Accessed 1 Jul. 2019].
Grimmer, L., 2018. The diminished stakeholder: Examining the relationship between
suppliers and supermarkets in the Australian grocery industry. Journal of Consumer
Behaviour, 17(1), pp.e13-e20.
Mortimer, G., Fazal e Hasan, S., Andrews, L. and Martin, J., 2016. Online grocery shopping:
the impact of shopping frequency on perceived risk. The International Review of Retail,
Distribution and Consumer Research, 26(2), pp.202-223.
Price, R., 2016. Controlling routine front line service workers: An Australian retail
supermarket case. Work, employment and society, 30(6), pp.915-931.
Target.com.au 2019. [online] Available at:
https://www.target.com.au/company/about-us/environment/sustainability-report [Accessed 1
Jul. 2019].
Theconversation.com 2019. The trouble with Big W: don't blame online for killing discount
department stores. [online] The Conversation. Available at: http://theconversation.com/the-
trouble-with-big-w-dont-blame-online-for-killing-discount-department-stores-114630
[Accessed 1 Jul. 2019].

13CASE STUDY ANALYSIS
Theguardian.com 2019. Coles and Woolworths’ plastic bag ban and the choices that remain.
[online] the Guardian. Available at:
https://www.theguardian.com/environment/2018/jun/06/coles-and-woolworths-plastic-bag-
ban-and-the-choices-that-remain [Accessed 1 Jul. 2019].
Wesfarmers.com.au 2019. [online] Wesfarmers.com.au. Available at:
https://www.wesfarmers.com.au/docs/default-source/asx-announcements/2018-annual-
report.pdf?sfvrsn=0 [Accessed 1 Jul. 2019].
Woolworthsgroup.com.au 2019. [online] Woolworthsgroup.com.au. Available at:
https://www.woolworthsgroup.com.au/icms_docs/195396_annual-report-2018.pdf [Accessed
1 Jul. 2019].