Marketing case study|Nordstrom stores – Distribution channels for optimal market penetration

To achieve the intended market reach Nordstrom must explore various distribution channels in the Mexican market. For instance, the company could engage in international strategic partnerships with vendors. Establishing distribution partnerships could however prove difficult due to its informal nature (Mehta, Polsa, Mazur, Xiucheng & Dubinsky, 2006). To avoid these uncertainties in Nordstrom’s business a number of other proposals could help it achieve the optimal market coverage. First having a number of collection points for items purchased online would help its wide coverage of metropolitan regions. Secondly, use of small vendors to distribute their products to the countryside would not only increase the market share of the products but also provide a channel via which promotion activities can be modeled. Thirdly the store needs to maintain large stores especially in cities where shoppers can find all the items they are in need of under one roof. This would avoid inconveniences to the customers thus helping them build a positive perception of the company. Finally the company should consider home deliveries to online shoppers when the costs of such prove manageable (within a given coverage area). Through home deliveries the company would create personal relationship with individual customers thus helping its brand to grow.

Conclusion

Analysis of the internal and external market helps in formulation of appropriate marketing and expansion strategies. The external environmental factors affecting Nordstrom stores were considered in this paper. Political issues such as regulatory policies that have been proposed following the financial crisis have been noted to affect the company in respect to its federal savings bank that helps customers pay for purchases through credit cards. Economic factors that influence credit availability and costs and also customer’s expenditure on apparel items are also noted to affect the stores performance. Further socio-cultural trends that determine fashions and technological advancement towards easier shopping are also significant effectors of Nordstrom performance. Finally a competitive market that comprises different vendors of similar items could also lower the entity’s market share. While for political factors having alternatives such as partnering with different financial institutions would be crucial in ensuring the entity’s survival, proper financial management and consumer market analysis would provide solutions to economic, socio-cultural factors noted. More over a feasibility evaluation of technological advancements, compliance evaluation against governing legislation and active promotion activities provides the requisite controls for technological, legislative and environmental factors.

Different promotional methods are important in the company’s marketing of its products in the Mexican market. Activities emphasizing its quality customer services, online advertising, personal selling, sales promotion and vendors’ reward schemes would help the company achieve a favorable market share. Further to enhance its product reach distribution channels that include evenly distributed collection points, use of small vendors in the countryside, having big stores in metropolitan regions and a possibility of home deliveries for online purchases within a specified coverage area have been recommended.

 References

Keillor, B. D., Wilkinson, T. J., & Owens, D. (2005). Threats to international operations: Dealing with political risk at firm level. Journal of Business Research 58, 629-635.

Mehta, R., Polsa, P., Mazur, J., Xiucheng, F., & Dubinsky, A. J. (2006). Strategic alliances in international distribution channels. Journal of Business Research 59, 1094-1104.

Nordstrom, Inc. (2009a). 20093Q form 10-Q. Retrieved February 10, 2010, from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjI4Mjl8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

Nordstrom, Inc. (2009b). 2008 annual report. Retrieved February 10, 2010, from https://materials.proxyvote.com/Approved/655664/20090311/AR_38144/images/Nordstrom-AR2008.pdf

Paswan, A., Pineda, M. D. S. & Ramirez, F. C. S. (2009). Small versus large retail stores in an emerging market – Mexico. Journal of Business Research 30, 1-6.

find the cost of your paper