High/Low Marketing
High-low marketing involves offering two products, one at the low end and one at the high end. There is no compromise, or middle-ground offering. High-low marketing is appropriate when the target market is likely to make such a choice. The market would be segregated into those who seek a low-cost product and those who seek a high-quality product. If both of these markets are served simultaneously, and there is a path created from the low-end to the high-end offering, then high-low marketing would be ideal.
It is tempting to view high-low marketing as appropriate for K-Mart in light of their acquisition by Sears. The two stores serve different segments and it is natural to assume an opportunity to channel customers between the two segments.
However, two aspects make a high-low strategy difficult in this case. The first is that while K-Mart represents the 'low'. Sears is not a true 'high', but rather more of a 'compromise' choice, with a product range the lies in the middle ground between the high and low ends. It would be difficult to reposition Sears as a high. To have K-Mart adopt a high while simultaneously retaining the low would create logistical challenges due to the limits of physical space in their stores. Further, it would send a mixed message to consumers, who are accustomed to a singularly focused K-Mart.
In addition, it will often be difficult to create a smooth flow of consumers between the two. Ideally, the two stores would be located side-by-side in order to create such a synergy, but that is infrequently the case. To create such a flow exclusively inside of K-Mart would mean a reduction in the breadth of product lines in order to support the increase of depth. Once again, this is limited by the amount of available square footage.
Works Cited
2004) the High-Low Play. Marketing Playbook. Retrieved April 9, 2008 at http://marketingplaybook.com/000932.html.
Bhatnagar, Parija. (2004). The Kmart-Sears Deal. CNN/Money. Retrieved April 9, 2008 at http://money.cnn.com/2004/11/17/news/fortune500/sears_kmart/.
