Ann Starr Fashion Shop

Presented by:

Philadelphia, 1947

The Ann Starr Fashion Shop

Mrs. Ann Starr

The 40’s

The 50’s

The 60’s

Ann Starr’s Clientele

Two decades later…

Ms. Laura Taylor Laura’s Designs

The Hillman Chain

There were many women with expensive

tastes and limited funds, and who always

wanted the newest "look“, but only if it

had been copied in a lower price range.

The Problem

• Hillman bought property exactly opposite to Laura’s store.

• Priced the items 20% lower than the same brands in department and specialty stores.

• Competitive price strategies were not Laura’s strong suit.

Laura’s Options• Cut down her prices (and maybe the quality

of her services and products as well)• Aggressive, intensive advertising• Ignore Hillman’s strategies• Sell off her business

Filene's Basement, Boston

• Entire stock made up of merchandise bought in lots from the finest manufacturers and retailers in the world.

• Everything bought at the lowest prices, so selection was less.

The affluent and not-so-affluent rubbed shoulders while looking over the vast assortments brought together by the

management of Filene’s Basement.

The Questions

• Should Laura adapt the ‘Filene's Basement approach’?

• Should she forget the merchandise plan that had been the basis for her success for so many years?

• Where would those customers who wanted selection and service go?

• Would she lose or gain in trying to compete directly with Hillman's?

The 7 P’s

The 7 P’s

STP & Competitors Analysis

Segmentation

• Desired Benefit: Latest Fashion Outfits for fashion conscious

customers • Buying Frequency:

One time buyerOnce a month buyer

• Awareness: FamiliarUnfamiliar

Targeting

• Targeting people of:Only femalesHigher income groupUrban PeopleFashion Conscious shoppersUpper middle class and Elite class peopleEducated /Uneducated

Positioning

• Product differentiation:In Trend products (Latest fashion) Creative Display of Products Most complete assortment of women's

fashion wear Surety of sizes, colours and styles Friendly, courteous, knowledgeable and

Trained staff

Competitor Analysis

SWOT AnalysisStrengths:•Creative displays

•Courteous & knowledgeable staff

•Customer Loyalty

Weakness:•Huge markup

•Limited offerings

•No advertising

Opportunities:•Feline’s Basement Approach

•Mass Advertisement

•Purchase from retailers

Threats:•Hillman’s Store (or any other new entrants)

•Possibility of Client Switch-over to the competition

Ann Starr

• Reputed fashion store• Recently faced with competition from

Hillman’s• Laura considering strategies to tackle the

competition.• SERVQUAL could help Laura in finding gaps in

anticipated and current service model

Should Laura Taylor engage in price competition with

Hillman's ? Why ?

What are the advantages and limitations of price competition? Non price

competition ?

Price CompetitionAdvantages

• Out perform competitors.• Gain market share.• High inventory turnover.• Can be used to attract

customers from competitors.

Limitations

• More time is needed to conduct and update market research.

• Competitors can easily mimic whatever price you select.

• Company may suffer losses.• Does not help building loyal

customer base.

Non price competition

Advantages• Premium price can be

charged.• Profit margin is high.• Target market is clear.

Limitations• Company expenses

increases on advertising, selling staff, sales promotions, coupons, special orders or free gifts

Should Laura Taylor engage in price competition with

Hillman's ? Why ?

No !!!

• Hillman had advantages in many areas over Ann Starr.• Hillman’s product procurement concept.• Nine outlets as compared to one shop of Ann Starr.• Potential customer available for high price taste and

service.• Expense of advertising can nullified by increase in

sales. • Exclusive women’s shop with 50% markup.• Her displays were the most creative in town. The Ann

Starr staff was well-known for its courteous, knowledgeable treatment of customers.

Filene's Basement

• Stock made up of merchandise bought in lots from the finest manufacturers and retailers in the world, both in terms of quality and assortment, it was able to buy everything at lower prices

• The Basement store occasionally secured merchandise from Filene's "upstairs" store and branches

• The differences between Hillman's and Filene's Basement were primarily differences in resources, timing, and selling strategies

• Filene's Basement was even Iess selective and, therefore, got better deals

• All other odd sizes and colors in the lines were purchased by Filene’s basement

Filene's Basement • Famous fashion stores like Neiman-Marcus in Texas and Bergdorf

Goodman in New York were regular suppliers • Customers were able to buy $300 designer dresses and $350

designer suits for half price• When merchandise was first placed on the selling floor, it was given

prime space• Merchandise that was left after twelve days was moved to a less

important table location on the floor while the new arrivals took over the prime spot

• From this second location the left-overs were again moved to a third area

• With each move, prices were reduced until finally the items that remained were given to charitable organizations

Is it feasible for Laura to adopt a version of the Filene's

Basement concept ??

YES !!!

• Competition is inevitable• She can still be able to operate one-half of the store as an

exclusive dress shop and the other half as budget shop• She could limit her sources and buy only from retailers in

her geographic region, eliminating manufacturers completely

• Advertising - increased income would support an increased promotion budget

• With only one store Laura was sure to pay more for the same group of merchandise and paying more meant either higher prices or a lower markup

Service Blueprint

Thank You