Marketing Analysis of The Home Depot

This report analyzes the marketing strategies and financial performance of The Home Depot, a leading retailer for home improvement products. It examines the products offered, target customers, marketing mix, competitors, and financial performance. The report also provides recommendations for investment.

Running head: MAIN RESEARCH ASSIGNMENT
Main research assignment
Name of the student
Name of the university
Student ID
Author note

1MAIN RESEARCH ASSIGNMENT
Table of Contents
Executive summary....................................................................................................................2
Marketing analysis.....................................................................................................................3
Products offered by the entity and its brand image................................................................3
Customers of the company and channels used for reaching the customers...........................3
Marketing mix (4 Ps).............................................................................................................4
Competitors............................................................................................................................5
Financial analysis.......................................................................................................................6
Financial performance............................................................................................................6
External factor........................................................................................................................6
Stock price..............................................................................................................................6
Recommendation....................................................................................................................7
Reference....................................................................................................................................8

2MAIN RESEARCH ASSIGNMENT
Executive summary
The main objective of the report is to analyse the annual report of The Home Depot that is
engaged in retail business for home improvements products. The report will highlight the
products line of the entity, its target market, competitors and marketing mix under the
marketing analysis. In the financial analysis part the report will highlight the financial
performance, external factors those affected the company, stock price of the entity for past 6
months and the reason of share price trend.

3MAIN RESEARCH ASSIGNMENT
Marketing analysis
Products offered by the entity and its brand image
The Home Depot Company is retailer for home improvements products. It is engaged
in selling the assortment of the building materials, garden and lawn products, products related
to home improvements and offers different other services. Primarily the company provides
services to 3 groups of the customers including – do-it-for-me (DIFM) customers, do-it-
yourself (DIY) customers and the professional customers (Ir.homedepot.com, 2019).
Retailers are generally concerned regarding the brand image and that is for the good
reason. The way any entity portray itself to the consumers, determines the type of customers
it wants to associate itself. The Home Depot is amongst the market leaders and is able to
succeed as it has solidified distinct image that is appealing to different customer segments
(Huang & Sarigöllü, 2014).
Customers of the company and channels used for reaching the customers
 DIY customers include the home owners and they buy products as well as install them
on their own using the in-store or online resources
 DIFM customers include the customers those are looking for 3rd parties for providing
the installation services.
 Professional customers of the entity include the contractors, traders, builders,
renovators and interior designer (Ir.homedepot.com, 2019).
The entity shall focus on the white females, aged between 35 to 54 years with the
income of more than $ 60,000 from Midwest region. It is predicted by Census Bureau that the
entity will market to the white population of 239,746,254 people including female customer
of 151,886,332 out of which 84,082,929 female will be aged between 25 – 44 years and

4MAIN RESEARCH ASSIGNMENT
regional population of 66,388,795. Most likely DIFM customers of the company are females
and college graduates from North eastern region (Ir.homedepot.com, 2019).
Different channels used by the entity to reach its customers include mobile through
the colour project app, groundswell through you tube how-to videos, associating itself with a
noble cause through providing services to homeless youth and launched the programme ‘The
Orange Door’, making some thoughtful acquisitions, opening more number of stores and
providing better inventory management as well as supply chain (Ir.homedepot.com, 2019).
Marketing mix (4 Ps)
Product – the entity is the supplier for providing the countless products and services to large
numbers of customers. Main products of the entity are –
 Retail services with the option of the expert advices
 Home improvement products derived from the 3rd party
 Professional and contractor products and services particularly for the cleaning and
janitorial equipment, lumber, plumbing kit and painting supplies
 Material related to home improvement, building, lawn and garden products including
fans, lighting, bath, windows, kitchen, doors and grills (Epstein, Buhovac & Yuthas,
2015).
Place – it is actually a superstore that sells different materials to DIFM consumers, DIY
consumers and the professional consumers including professional remodelers, tradesman,
repairman and small business owners. The entity has its network all over 50 states of US,
Mexico and all 10 provinces of Canada (Ir.homedepot.com, 2019).
Price – currently Home Depot is at the top position in the retail marketing and achieved its
position through different pricing policies that helped it ensuring competitiveness but not

5MAIN RESEARCH ASSIGNMENT
with cost of the revenue. It uses guaranteed low price or penetration pricing that is aligned
with the generic strategy to attract the customers (Ir.homedepot.com, 2019).
Promotions – for reaching the customers it follows the vigorous strategy of communication
to create better visibility for the products and services. It uses television commercials that are
considered as a prominent tool for advertising. Further, it uses online media and print media
to highlight the products and services amongst customers. Another key success factor for the
entity is online sales and websites sales (Ir.homedepot.com, 2019).
Competitors
Major competitor of The Home Depot is Ace hardware with the estimated revenue of
$ 5.1 billion and employees of more than 8200. Ace hardware is the online retail platform
that is engaged in offering plumbing, electrical, garden and lawn equipment. The entity
assures consistent quality for its private level products through different means including the
factory site visits, 3rd party lab testing and specific criteria for the imported products (Ace
Hardware | The Helpful Place - Ace Hardware. (2019).
Another competitor of the company is Menards with the estimated revenue of $ 9.5
billion and employees of more than 45,000. It owns and operates chain for the home
improvement centres and offers building materials and home appliances. Menards provides
quality products to the customers including products and services including development of
residential real estate.
Culture is major competitive advantage of the entity that can be found in every aspect
of the company. It devotes attention and time to the customers. Further, the value wheel of
the entity involves entrepreneurial spirit, customer service and building a strong relationship
(Ir.homedepot.com, 2019).

6MAIN RESEARCH ASSIGNMENT
Financial analysis
Financial performance
Looking into the financial performance of the entity for the year 2017 as compared to
2016 it can be identified that the sales, gross profit and net profit of the entity has been
increased in absolute terms as compared to the previous year. However, if the percentage
term is considered, though the gross profit margin is reduced from 34.16% to 34.05%, the net
earnings margin has been increased from 8.41% to 8.5% over the years from 2016 to 2017
(Khadafi, Heikal & Ummah, 2014). Major reason behind the company’s economic
performance is strong macroeconomic conditions including increasing of consumer’s
disposable income and gradual recovery in the housing market that have positive impact on
the company like Home Depot which is significantly dependent on economy improvement
(Mathuva, 2015).
External factor
External factors those affected the entity includes unpredictable spending of
governments, increase in cost of capital, decline in the preference for the imported goods and
rising trend of using the mobile technology (Cao, 2019).
Stock price
Current stock price of the entity is 203.55. Last 6 months changes are as follows –

7MAIN RESEARCH ASSIGNMENT
It can be identified from the above that except for the month of November, the stock
price of the entity for the last 6 months were in rising trend. Reason behind increase of share
price is fall in the mortgage rate and positive data on housing that declined the fear regarding
the market condition (Finance.yahoo.com, 2019).
Recommendation
Based on the share price performance and financial performance of the entity it is
recommended that the money can be invested into the company. The major reason of this
recommendation is the strong macroeconomic factors and increasing profit trend of the
company is indicating that long term sustainability of the entity.

8MAIN RESEARCH ASSIGNMENT
Reference
Ace Hardware | The Helpful Place - Ace Hardware. (2019). Retrieved from
https://www.acehardware.com/
Cao, L. (2019). Implementation of Omnichannel Strategy in the US Retail: Evolutionary
Approach. In Exploring Omnichannel Retailing (pp. 47-69). Springer, Cham.
Epstein, M. J., Buhovac, A. R., & Yuthas, K. (2015). Managing social, environmental and
financial performance simultaneously. Long range planning, 48(1), 35-45.
Finance.yahoo.com. (2019). Yahoo is now part of Oath. Retrieved 10 April 2019, from
https://finance.yahoo.com/quote/HD/
Huang, R., & Sarigöllü, E. (2014). How brand awareness relates to market outcome, brand
equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp.
113-132). Springer, New York, NY.
Ir.homedepot.com. (2019). Retrieved 10 April 2019, from
http://ir.homedepot.com/~/media/Files/H/HomeDepot-IR/2018_Proxy_Updates/
HD_AR_Soft-Copy.pdf
Khadafi, M., Heikal, M., & Ummah, A. (2014). Influence analysis of return on assets (ROA),
return on equity (ROE), net profit margin (NPM), debt to equity ratio (DER), and
current ratio (CR), against corporate profit growth in automotive in Indonesia Stock
Exchange. International Journal of Academic Research in Business and Social
Sciences, 4(12).
Mathuva, D. (2015). The Influence of working capital management components on corporate
profitability.

9MAIN RESEARCH ASSIGNMENT
Monestier, T. J. (2014). Where Is Home Depot at Home: Daimler v. Bauman and the End of
Doing Business Jurisdiction. Hastings LJ, 66, 233.