Lowes Case Essay

7372 WordsApr 20, 201330 Pages
Lowe’s Companies, Inc.: Optimizing the Marketing Communications Mix In early 2009 Lowe’s Companies, Inc., a leading home products retailer, launched an ambitious new project to gain customer mind share in the kitchen remodeling arena. The project, called the next-generation installed sales (NGIS) initiative, was a concerted effort by Lowe’s to expand its service offerings to become an end-to-end solution provider for customers’ kitchen remodeling projects. Brad Simpson, a marketing manager at Lowe’s, explained that the NGIS would be a very different approach from Lowe’s traditional marketing and sales initiatives: Through this new approach, we will deliver more than just supplies to the customer. We will deliver kitchen remodeling…show more content…
Lowe’s was the second largest home improvement retailer in the world and the fastest growing in the United States. Its corporate vision was to “provide customer-valued solutions with the best prices, products, and services to make Lowe’s the first choice for home improvement.”1 The Home Improvement Industry The U.S. kitchen renovation market reached $17 billion in 2005. Growth in this market was at an all-time high in the mid-2000s, but the economic recession in 2008 also led to a slowdown in this sector. Research indicated that approximately 75 percent of kitchen remodeling projects were done through professionals, while 25 percent were completed by homeowners themselves. Most of the DIY projects were undertaken by lower-income homeowners who could not afford to hire professional service firms (see Exhibit 1 for a breakdown of source of kitchen remodeling services by income). Major kitchen remodeling projects cost anywhere between $40,000 and $80,000, depending on the choice of materials (see Exhibit 2 for details on trends in kitchen remodeling costs). The home renovation industry was highly fragmented; nearly 30 percent of the industry consisted of private, local companies who reported less than $100,000 in revenue annually.2 The industry included professional companies, divisions within home stores, small local companies, and independent contractors. Small companies and independent contractors had
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