K-Mart History Essay, Research Paper K Mart is the outgrowth of S.S. Kresge, founded in 1899. S.S. Kresge was a ?variety store? that featured low-priced merchandise for cash in low-budget, relatively small
K-Mart History Essay, Research Paper
K Mart is the outgrowth of S.S. Kresge, founded in 1899. S.S. Kresge was a ?variety
store? that featured low-priced merchandise for cash in low-budget, relatively small
buildings with sparse furnishings. The adoption of this concept was pioneered by F.W.
Woolworth Company in 1879. Due to the early success of the variety store concept,
S.S. Kresge saw rapid and profitable development in its early years. In 1917, the firm
was incorporated. It had 150 stores and next to Woolworth?s, was the largest variety
chain in the world.
Over the next 40 years, the firm experimented with mail-order catalogs, full-line
department stores, self-service, a variety of price lines, and the opening of stores in
planned shopping centers. By 1957, management had become aware that there were
many different merchandisers that were grabbing the market share of categories of
products previously dominated by variety stores. This was mainly due to the expansion
of supermarkets and drugstores.
In 1957, in an effort to regain its competitiveness, S.S. Kresge placed Harry B.
Cunningham in the position of General Vice-President. Mr. Cunningham was given the
assignment of studying existing retailing business and recommending marketing changes.
After two years of study, Cunningham recommended that S.S. Kresge go beyond being
a variety store and enter the discount store market. The board of directors accepted
Cunningham?s recommendations. When President Frank Williams retired, Cunningham
became the new President and was directed to implement his recommendations.
The first K mart opened in 1962 in Garden City, Michigan. In adopting Cunningham?s
strategies, management decided to rely on the strengths and abilities of its own people to
make decisions rather than employing outside experts for advice. The main difference in
the K mart strategy would be the offering of a much wider merchandise mix. Originally,
K mart was only able to merchandise about 50% of their merchandise mix, and they
contracted for operation of the remaining departments. In the following years, K mart
took over most of those departments originally contracted to licensees. Eventually, K
mart operated all but the shoe departments.
By 1980 K mart?s competition was offering something new and different in terms of
depth of assortment, competitive price image, and format. K mart management
recognized the threat of these viable businesses that were keeping the firm from
improving and maintaining market share in specific merchandise categories.
After careful analysis, several new marketing strategies emerged. They included
accelerating store expansion and refurbishment; capitalization on dominant lifestyle
departments; centralizing merchandising; investing more capital in retail automation;
undertaking an aggressive and focused advertising program; and fostering continued
growth through new specialty retail formats
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