Reference no: EM133652354

Problem

The Great Recession (2007-09) caused a change in consumer spending habits that resulted in a phenomenon known as the "retail apocalypse." Department stores have borne the brunt of the hardships associated with this, as have luxury retailers. Being both, Neiman Marcus has been placed in a predicament that could end the retailer's existence after over a century of operations. Being US$5 billion in debt and having posted six consecutive quarters of losses, it is unknown whether this retailer will be able to rebound. Neiman Marcus is currently embraced by a circle of rich and mature women; however, the store needs to open its eyes to the next significant consumer market: millennials. No luxury retailer wants to diminish their image, but their current target market will not sustain them; for a retailer that is laden with debt and has little capital, millennials could be the company's saving grace. But how does Neiman Marcus reach this important target market?

Neiman Marcus' management team understand that attracting a younger target audience is imperative but knows that it cannot change its image too rapidly or it will alienate its wealthy current customer. What changes should the management team make in order to appeal to millennials while continuing to attract their traditional target customer?

List three distinct solutions that will remedy the identified problem(s). For each:

1. Consider the implications of each solution across the entire marketing mix (product, price, placement, promotion).

2. List the pros and cons of each solution.

3. Relate each solution to the objectives of the company listed and state the impact of each on the company's revenue and profitability.