Department Store Marketing Plan: Segmentation & CRM Strategy

Introduction

This marketing plan is written from the perspective of a Chief Marketing Officer of a United States department store chain that competes directly with Macy's and Nordstrom's. The plan enumerates and discusses the overall strategy, examines product and market boundaries, identifies the marketing segmentation strategy, describes the customer relationship management approach, and outlines the general strategy for collecting information about potential customers. All positions are supported with academic and scholarly resources. While taking on the role of marketing leader in a retail environment can be complex and difficult, there are several core strategies that should always be present, and they are not hard to understand conceptually.

Overall Marketing Strategy

The overall marketing-driven strategy is dictated in large part by the fact that the direct competitors of this theoretical store are Macy's and Nordstrom's. Those two stores are certainly not known for budget-priced items, and this theoretical store would not be either. The marketing-driven strategy for this new store is bringing a taste of the good life to more people without breaking the bank. This will be accomplished through customer-focused campaigns such as annual sales, private sales for repeat or registered customers, and no-interest financing for higher-end items like expensive handbags and jewelry. Credit will not be extended liberally to high-risk credit profiles, but medium- to upper-middle-income earners who want to frequent the store will be embraced and directed toward the goods they desire.

The rationale behind this approach is that the store needs to carry itself in broadly the same manner as Macy's and Nordstrom's, since they are direct competitors. However, a wholesale copycat approach will not work — this store must establish its own niche and brand identity. Imitation is common with store-brand goods, but it is not acceptable with more expensive merchandise. There is also legislation specifically designed to combat direct knockoffs (Port, 2012). Anti-counterfeiting trade frameworks have increasingly targeted the retail industry, making the sale of imitation luxury goods both legally and reputationally risky. Beats headphones, for example, are a recognizable brand, and any obvious knockoff is a cheap substitute. If this store sold Beats headphones, it should absolutely never carry knockoffs under any circumstances.

Product and Market Boundaries

The product and market boundaries have already been partially addressed above. The store's merchandise will in no meaningful way correspond to what is found in traditional discount stores like Walmart or Target. There may be a scant number of shared products, but very few. There will be some overlap with mid-range stores like Kohl's and Dillard's. However, while the price point for purses and handbags might start in the $50+ range, most shoes, clothing, and handbags will start in the $75–$100 range and go up from there. Goods that are not considered reputable or desirable by discerning shoppers will not be sold at this chain. "Reputable" here refers to goods that wear out prematurely or are clearly not of higher quality.

The rationale is straightforward: this store will not carry goods that fail quickly, as that is completely unacceptable when customers are spending a significant amount of money. This expectation is even higher for upper-tier goods. For example, a high-end watch whose band breaks within a week is not something that can go unaddressed if it becomes a pattern. The store's positioning as a non-discount chain demands consistent quality across all price tiers.

Conclusion

Port, K. L. (2012). A case against the ACTA. Cardozo Law Review, 33(3), 1131–1183.

Treanor, T. (2010). Amazon: Love them? Hate them? Let's follow the money. Publishing Research Quarterly, 26(2), 119–128. doi:10.1007/s12109-010-9162-7