Sara Lee Corporation

Executive Summary

This case study provides an evaluation of Sara Lee Corporation and particularly its operations of product lines available through the Wal-Mart stores. To begin with, an effective SWOT analysis of the company was conducted where strengths and opportunities are identified while addressing possible threats and improving its weaknesses to avoid giving the competition an aggressive advantage. Marketing requires effective identification of issues as a key factor in devising the best methods of addressing them.

Therefore, Kirk Nelson identifies the BasicHipster style to be a major problem in the market because it was not doing well. Effective establishment of the best possible solution is therefore critical to maintain the corporation’s market share for the Wal-Mart Account. This analysis generates key alternatives that Kirk Nelson as the Sara Lee Wal-Mart Girl’s Panty analyst should consider in getting out of the current deadlock. This study recommends that Sara Lee Wal-Mart account should retain the FashionBikini due to its better performance compared to the New FashionBikini and introduce back into circulation, the new BasicHipster.

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History or introduction

Sara Lee Corporation is a fortune 500 company listed on the NYSE. They mainly mass market their diverse product lines of food and beverages, branded apparel, and household products through large retailers like Wal-Mart and Target, but also smaller store as well. Sara Lee, under the Hanes branded apparel operates a product line of underwear called Girls Panty (GP) targeted girls ages 4-12 that include 3 cuts or styles: FashionBrief, FashionBikini and the BasicHipster. The Girl Panty line in Wal-Mart had to meet its sales and supply standards.

Sara Lee Corporation maintained high sales due its ability to analyze its products on the basis of the market demand and thereby maintaining the customer’s preference. This case study provides a comprehensive analysis of the corporation’s Girl Panty line in the Wal-Mart account, identifies the strengths and weaknesses, recognizes the marketing problem, generates alternatives, make a recommendation and finally offers an effective implementation strategy.

SWOT Analysis

Strengths

Sara Lee has been identified as having 3 key strengths.

First, their ability to employ highly experienced supply chain analysts made it easy for all the members to effectively carry out their roles and cite possible shortcomings on time and come up with workable solutions to address it.

Second, Sara Lee’s longtime history has demonstrated that their products built on leadership brands represent high quality, affordable, casual clothing for everyday use, thereby creating brand loyalty and a strong attachment to its products.

Finally, relationship building and retention is another key strength for Sara Lee. The trusted partnership between Sara Lee and Wal-Mart was two-fold. Wal-Mart served as a strong distribution channel partner with deep market penetration, while Wal-Mart relied on Sara Lee’s wide portfolio of well-known and established brand names.

Weaknesses

According to the case, the corporation suffers some weaknesses. To begin with, the girl panty suppliers are international and therefore subjected to key external forces such as cultural factors, religious considerations, strikes and unrests which made supply uncertain (Case, 427).

With some of the supplies coming from external suppliers, the waiting period was very long and therefore unpredictable (Case, 427). Sara Lee’s market share for the BasicHipster was performing poorly. A New BasicHipster product was in the process of being developed but not yet primed for distribution.

Opportunity

One of the key opportunities that Sara Lee had was its ability to establish the need for new products and make them to replace those whose sales were on the decline in the market.

According to the case (431), Kirk Nelson was informed of a suitable replacement for the BasicHipster after indicating its poor performance.

Threats

Notably, Sara Lee had one key threat to its operation in its Wal-Mart Account, the Fruit of the Loom brand. Global competition was fast emerging in regions such as Eastern Europe, South East Asia and the Middle East powered by technology and cheap labor. Due to this global atmosphere, Fruit of the Loom rose as the main competition in the underwear category (Case 426).

Case Analysis

Sara Lee Wal-Mart account division analysis was the most effective at marketing as it provided a crosscutting evaluation of the product’s performance. Kirk Nelson was deeply involved in generating the most recent information before meeting his boss (Case p. 425). As a result, it acted as a critical organization in promoting sales at the stores at low prices and sustainable supplies (Case 427). As a result, this relationship promoted the internal sales at Wal-Mart while creating the needed impression in other external Sara Lee branches.

In addition to that, the corporation had an effective supply from its widespread supply chain by maintaining distribution centers for its products (Case 427). To ensure that the products, promotion, and pricing were perfect, the analysts’ recommendations were subjected to extra scrutiny and further refinement. This reduced possible cannibalization and provided more effective recommendations on aspects such as replacements of less performing products. Even after analyzing the performance of the BasicHipster style, the decision to replace it had to further be analyzed (Case 428 -430).

Marketing Problem

Due to the lack of performance from the BasicHipster style, it was temporilary replaced with the New FashionBikini until the New BasicHipster was finished. After watching the sales do well for over a year in all three styles: FashionBrief, FashionBikini and the New FashioBikini, the New BasicHipster was ready for the shelf. Should Sara Lee replace the old or the New FashionBikinis with the BasicHipster or should they consider leaving both FashionBikinis selling side by side and not introduce the New BasicHipster? Of course, that decision depends on how well the FashionBikinis (old and new) are working together.

Establishing an effective solution to this problem was a key issue in that the product was expected to be free of cannibalization in the market.

Alternative Solutions

Sometimes analysts make important decisions while generating the sought after revenue and steer their products towards maintaining effective competition. Looking at the marketing problems brings to mind several solutions Sara Lee should analyze. First, Sara Lee management could consider maintaining the status quo as it is, keeping all three lines: FashionBrief, FashionBikini and New FashionBikini.

In doing so, they keep their sales steady without risking the loss of market share and shelf space. Since the FashionBrief was preferred by younger girls while the FashionBikini and the New FashionBikini was preferred by the older girls, this apparent age difference only complimented each other because they each had their own target market. The downside to this is having 2 style cuts that are alike such as the FashionBikini and New FashionBikini because the product line lacks the diversity in styles and limits your target segment.

Both of the Fashion Styles are not targeted to the economy buyer such as the BasicHipster would be and limits your wide range of pricing for consumers. Second, Sara Lee could consider the option to delete either the FashionBikini or the New FashionBikini and bring back the new and improved BasicHipster while keeping the FashionBrief. According to Kirk, he mentions that the sales of the BasicHipster were performing poorly but no graph or sales figures were provided in the case for a comparison.

After charting the sales volume for the exact same year and periods of time between the FashionBikini and the New FashionBikini, there was a sales increase $125,348 where the FashionBikini outperformed the New FashionBikini by 154%. Keeping in mind that the New FashionBikini was only being sold in 1700 store compared to 2300 stores, the increase was still significant. Since keeping both FashionBikini styles on the shelf along with the Fashion Brief and adding the new BasicHipster was not an option, Kirk would have to make a decision to delete at least one of the Bikini lines.

Given the sales data, the one to cut would be the NewFashionBikini. This would give Sara Lee three distinct styles that include a new line of cut, the BasicHipster, which would diversify their product line an appeal to the economy priced buyer and retain the sense of the original hipster to the consumers while giving then a new sense of the market. The downside to this alternative would be risk losing market share. If the BasicHipster was not performing well to begin with maybe bringing the style back might repeat the same results. Again, without numbers to compare, the risk is still prevelant.

On the other hand, the BasicHipster is the New BasicHipster with a new color scheme which could result in a greater market shre while appealing to consumers.

Recommendation

Sara Lee should consider replacing the New FashionBikini with the New BasicHipster based on 3 reasons. First, I had to anaylze the sales of the FashionBikini and the New FashionBikini so I knew which one to elimanite in order to introduce the New BasicHipster. After careful anaylsis I found that the sales of the old FashionBikini were $125,348 or 154% higher than the sales of the New FashionBikini given the same time period.

Also, by not having the BasicHipster style on the shelf for over a year, it would create a need for the product by the consumer. Second, a diverse product line in terms of price and cut would be available appealing to the ecomonic consuios buyer with the New BasicHipster, as well as those consumers who desired more colors and print themes as with the FashionBikini and Fashion Brief lines. Lastly, by keeping the FashionBikini and FashionBrief line, the two had already been in the market and would not require the intensive promotion demanded by a new product.

In addition, the sales and market share should remain contstant and even increase while the promotion for the New BasicHipster takes hold.

Implementation

By adding the new BasicHipster a whole new marketing campaign will be designed around the the new product including commercials aimed at young girls ages 4-12 . email marketing, free giveaways, Further analysis to determine possible cannibalization should first be conducted in the Sara Lee Wal-Mart Account to track the sales volume and market share.

By introducing the already New BasicHipster, a new advertising and promotion effots will take place informing the consumer of this new line and style choice. Revising the NewFashionTh e for the first year to determine if any changes need to be made. If no changes are required, further analyses of the products lines will contunie for another 2 years until their life cycles are near the end whne 1 and continueof the 3 increase the chances of raising sales of the FashionBikini.

Besides, Sara Lee should gradually increase the quantity of the FashionBikini to account for the added sales from the deleted New FashionBikini line while continuing to expand on the growth and promotion of the New BasicHipster to ensure a smooth transition. In addition to that, the corporation should intensify promotion of the FashionBikini to further inform and persuade consumers to buy it at Wal-Mart. Finally, a critical review of the FashionBikini should be maintained to seek consumers’ further preferences while making possible adjustments on their preferences.

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