Company Case 11
Sears: Why Should You Shop There?
Synopsis
Sears, “Where America Shops.” Maybe at one time, but not anymore. This case
chronicles the rise and fall of America’s once greatest retailer. It is a classic tale of a
company that rose to market leadership by recognizing customer needs and fulfilling
them. But once it achieved a massive scale and market dominance, it was plagued with
the all-too-familiar disease of marketing myopia. As market conditions changed, Sears
stuck to the same tactics that led to its success. However, those tactics were outdated and
no longer worked. Like many before it, Sears didn’t recognize the need for change until
the momentum of the free market has pulled it down with such force that a reversal is
likely impossible.
Teaching Objectives
The teaching objectives for this case are to:
1. Classify a retailer according to the different retailer types.
2. Understand how segmentation, targeting, differentiation, and positioning apply to
retailers.
3. Evaluate the strengths of a particular retailer’s strategy.
4. Consider a retailer’s chances for success by comparing its strengths against
market trends.
Discussion Questions
1. According to the principles of retail strategy, how did Sears once become the
nation’s biggest retailer?
In short, Sears became the biggest retailer by meeting customer needs. Consider
the retail marketing mix:
Product – wide variety, quality national and store brands, something for
everyone.
2. According to those same principles, how did Sears lose its once-commanding
market position?
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Part 1: Defining Marketing and the Marketing Process
In short, as the market changed, Sears did not. It stuck to the things that made it
big and did not lead out in setting the agenda for retail trends.
Product – the assortment of brands became stale, lost its leading edge.
Place – stores became neglected, old, and dirty. Remained a mall store
3. What is the relationship between the current Sears corporate strategy and its
marketing struggles?
It should be obvious why the current corporate strategy is directly responsible for
Sears’s marketing struggles. The company is not being managed as a
4. Assess Sears’s efforts to become a true bricks-and-clicks retailer.
Sears has done better in e-commerce in recent years than it has in its store
retailing. It has established a good strategy and infrastructure. It would seem that
5. Can anything save Sears? Support your position.
The answer to this question depends upon how “save” is defined. If the definition
is simply to reach some kind of financial stability where annual revenues cease to
decline and profits reach a consistently positive level, then the answer is yes.
However, even to achieve this, it will take drastic measures, far greater than the
current turnaround plan provides. The online initiatives are great, but will not
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Chapter 1: Marketing: Creating and Capturing Customer Value
Teaching Suggestions
Start by asking students how many of them shop at Sears. Given that they are
representative of the next generation of home shoppers, if almost none of them shop at
Sears it does not bode well for Sears’s future. Ask students why they don’t shop there and
what the Sears brand represents to them. After going over the questions, compare Sears to
JCPenney. JCP has experienced an almost identical rise and fall to that of Sears. But to
illustrate just how difficult it is to reverse this trend, point out the fact that JCP is being
run by people with extensive retail experience, has a more customer-centric focus, is
investing in the remodeling of its stores, and, overall, has a much better retail strategy. All
that, and it is still in a tailspin. That’s how hard it is for a once great company to reverse
direction once it plummets toward the bottom of the market.
This case was developed for use with Chapter 11. This case also works well with the
marketing targeting chapter (Chapter 6), the pricing chapter (Chapter 9), and the direct
and online marketing chapter (Chapter 14).
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