Nordstrom’s Case Study

Tynisha M. Miller Professor Jamar Jeffers Business 107 May 29, 2011 Nordstrom’s Success Introduction Marketing is a crucial part of a company; it is defined as “the activity, set of institutions, and processes of creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large (Lamb, 2010). In other words marketing can be seen as a planned concept used by most businesses to enhance their financial growth. Customers can be put at ease with knowing that the products they purchase are of excellent quality and the quantity they demand will be available.

Before taking this marketing class; when I heard the word marketing my thought was that it only involved advertising and selling a product; when in actuality it involves research planning, the product, and market development as well as training and marketing services. It’s critical that every phase of the marketing plan be researched and well executed if a company expects to be successful. All the aspects that I mentioned will be how Nordstrom’s have maintained continual growth. Founded by Carl F. Wallin a Seattle shoemaker and John W. Nordstrom opened a shoe store, Wallin and Nordstrom in Seattle in 1901.

The two built their business on the philosophy of offering customers the best in service, selection, quality, and value. As of today Nordstrom continues to grow and thrive on that same philosophy through its family-controlled business. Nordstrom believes in service with a smile and want to project an image of small town modesty – that’s the corporate culture and it sells. Nordstrom’s course has been to modernize, adding brands such as Caslon, DKNY, and Emme for women and Facconable (which they later acquired), Kenneth Cole, and Tommy Bahama for men to its racks.

Restructuring took place in 1999 and at that time Nordstrom’s decided to sharpen its image with consumers. In May 2000, Nordstrom’s declared, “Reinvent Yourself” as its advertising campaign, when customers entered the stores they no longer saw piano players wearing tuxedos (former trademark) instead there was a more modernized display of hip, brighter, flashier colors, and more casual apparel. As a frequent consumer to Nordstrom’s, whether or not it’s one of their 115 full-line stores or their 86 Nordstrom Rack stores; I always experience their continued personal touch.

Today Nordstrom is still controlled and owned by the family, whose commitment and philosophy is still the foundation of its success. The retail store may move forward with the trends of technology, but the needs of today’s consumer will always come first. Type of Retailer Nordstrom’s is and characteristics it shares with other retailers Nordstrom’s known as a high end retail department store that carries a wide variety of specialty goods that include: apparel, cosmetics, footwear, accessories, musical cd, and some of their retail stores may also carry furniture.

As a past employee of Nordstrom’s and eventually a consumer I really like the idea of purchases being made within each department rather than at on central check out area. Each department is treated as a separate buying center to achieve economies in promotion, buying, service, and control. As a part of the retail industry Nordstrom’s share many characteristics as other retailers such as: the generous exchange policy, superior customer service, and product quality. The biggest part of Nordstrom’s success is their generous exchange policies; this is what keeps consumers coming back.

When I went through my new hire orientation with Nordstrom’s; the main term that was drilled into our heads was the customer is always right, which meant if a customer came into the store with a pair of jeans from the gap and even though I knew we did not carry the gap brand just agree with the customer and offer them something for that item. Now I wondered how in the world they would prosper from such a policy because they will definitely lose money on returns and when I raised that question the response was, “Our customers are our top priority and we will maintain good customer relationships this way. Superior customer service is what I am greeted with whenever I step into any department of Nordstrom’s. At the store located in Tyson’s Corner, Virginia, the same sales associate assist me each time I visit; I have her business card in my rolodex, I place a call to her to let her know when I will be coming (if it’s her day off she will come in) and ahead of time she will pull clothing items together for me to try on when I arrive. Whenever something new comes in or if there are markdowns on items I may have been interested in she would give me a courtesy call.

Another nice gesture I like that my sales associate offer to her clients is mailing out birthday and holiday cards as well as making you feel as though you are her only client. When I purchase an item, quality of that item is most important to me; Nordstrom is big on product quality. Product quality is very important at Nordstrom’s; they stand behind any product they sale and because they know they offer such great quality they do not spend large amounts of time and money on advertising or promoting.

Level of Service The level of service that is achieved at Nordstrom’s stores can’t be rated. Nordstrom’s not only please their consumers, but they stand by their products; they know their products are top quality and worth the price that the consumers chose to pay. In the case study it is stated that “the company refuses to hop on the price promoting band wagon”, which means they set their price and that’s the price it’s going to be.

Their success is not obtained through friends and families discounts or coupons, because they feel their product is worth the price. When you look at companies like JCpenny’s, Macy’s, target, and Wal-Mart they would be on the opposite end because they do offer friends and family discounts, certain percentages off if you are willing to fill out a survey. With such incentives and promotions these retailers are definitely paying a price for this kind of advertising just to lure consumers into their stores. Nordstrom’s Retailing Mix

There are six components of the Nordstrom’s Retailing Mix and they are as follow: product, place, promotion, price, presentation, and personnel. Over the past 100 years Nordstrom’s products have grown; they started out as a shoe store and now has expanded into a huge high end department store that sales just about anything you can imagine. In the United Stated there are approximately 157 stores and they plan to open 19 more. Eric Nordstrom, who is the president of the company, uses his gut feeling to determine the location of the next store.

His gut feeling is almost as important as demographics and statistics; he states, “Plenty of places look good on paper and we say no” (Nordstrom case study, 2010). There is no real promotion for Nordstrom’s; they rely on their customer service to attract new customers. The customers do the promoting for them through word of mouth; because their products are of great quality the relationships with existing customers as well as new customers allow for their company to grow. They would rather spend their money pleasing their customers instead of promotion strategies.

The presentation that Nordstrom’s present is an excellent one; now they are equipped with computerized inventory that gives the buyers and salespeople the necessary data to know what items are in the stores. The business strategy that is utilize is “greed through love”; the goal is to perfect the art of focusing on the right customers and giving then their undivided attention. In other words, the customer comes first and they are out to satisfy and build a relationship with these customers. Without the wonderful personnel Nordstrom’s employee long lasting relationships with their clients would not be developed.

As previously mentioned their goal is to make the customer feel as though they are the main priority; this is achieved through the exchange of business cards, setting future shopping appointments, and calling when new merchandise come into the store. Primary Challenges Nordstrom’s face In light of the current economic situation Nordstrom’s need to monitor and manage their business based on these conditions. The economy changes can force situations such as unemployment or inflation, which will dictate how a consumer decides to spend their money.

In a time of recession consumers tend to look more for bargains, promotions, and incentives. Spending is based on their basic needs; which can be a disadvantage for Nordstrom’s because they do not offer coupons, one day sales, or friends and family discounts. Competition Companies that are looking to be successful need to keep a steady track on the competition in order to develop strategies that will keep them ahead of everyone else. Nordstrom’s has expanded their business to many different locations and this would make it costly for competitors to enter the market.

Nordstrom’s sees this as an advantage, because it put the pressure on their competitors to try and get ahead of them. Nordstrom’s now aim for “seamless” shopping experience across all the states; therefore this leads other companies to do the same. In order to gain new customers and keep the existing ones Nordstrom’s need to keep up with the trends; keeping up with the trends will demonstrate not only to their consumers but there competitors as well that they have what it takes to maintain a strong position in the market place.

Conclusion The success of a business is determined by the impact of the marketing strategy; meaning if a company use marketing effectively, it will have a greater chance of prospering as opposed to a company that doesn’t use marketing effectively. Company’s utilizing strong marketing departments are able to increase production sales based on customer satisfaction. REFERENCE PAGE www. nordstroms. com www. fashionencylopedia. com/mu-pi/nordstrom. html (Lamb, 2010) (Nordstrom’s case study, 2010)