PETS.COM INC.: RISE AND DECLINE OF A PET SUPPLY RETAILER
SWOT Analysis
SWOT analysis as a technique assist in understanding the strengths and weaknesses of a firm and identification of opportunities available and possible threats (McDaniel, Hair, & Lamb, 2014). Strengths refers to advantages that a firm has which enables to perform better than others and are usually internal perspectives (McDaniel, Hair, & Lamb, 2014).Pet.com had various strengths that gave the management the confidence that it would perform better in the market for pet products. The firm had access to large amount of capital especially from the partnership with Amazon.com. The resources provided through this partnership were poised to enable the firm to eliminate its competitors including Petopia.com, PetSmart.com and PetStore.com. By using strategic assets and experience of Amazon.com, the firm would build a competitive advantage. Other strategic alliances made it possible for Pets.cpm to provide animal health insurance and this made it the featured pet store on Yahoo! Platform. Other strengths stemmed from the company’s ability to have a communication strategy that was aggressive and a penetration pricing-strategy. The firm was able to provide many product specials at low prices across board in comparison with other shops.
Weaknesses refer to external and internal factors that make a firm’s competitors to do better in the market (McDaniel, Hair, & Lamb, 2014). The weaknesses of the firm arose from the lack of a brick –and mortar establishment and as such it lacked warehouses that would have been important in putting pressure on its margins given that large shipping of orders by air freight made them very expensive. The other weakness was the inability of the firm to break-even even after carrying out extensive marketing of its products.
Opportunities refer to trends and changes that a firm can utilize to achieve the required growth in market and revenue (McDaniel, Hair, & Lamb, 2014). The firm had various opportunities in the market that it would exploit in the market. The market was large given that around $23 billion was spent on pets’ products in 1998. About 60 percent households in US owned pets and 40 percent owned more than one and the market was predicted to experience a rapid growth over the following years. The other opportunities include rapid growth in internet usage and increasing online buying activities.
The firm faces various threats internally and in the market. The internal threats involve the risk that the firm sells products at prices well below cost which poses financial products. The increased threats in the market arise from increased competition from sellers offering pets products including Petopia.com, PetSmart.com and PetStore.com that prevent the needed market expansion growth.
Target market refers to customers that a firm directs its marketing efforts to so that they can buy its products or services. The target market for Pets.com included the online buyers of pets’ product who would be looking for products, services and information on their pets. Positioning refers to a process of influencing the perception of potential customers about a given brand and product line. Positioning statement refers to an expression of how consumer needs will be met by a particular product differently from competitors (McDaniel, Hair, & Lamb, 2014). The positioning statement for Pets.com included serving pets and pets’ owners with best possible care by providing products, service and information. This is through a wide selection of products and expert advice from veterinarians and experts in the industry.
The right marketing strategy should focus on should be creative while providing low-cost options (Pisano, 2015). The mistake in the Pets.com marketing strategy involved using big amount of resources in aggressive marketing and pricing but little efforts was paid to the need creativity and low cost in the process. The best strategy should involve being Tech Savvy, networking through online platforms and minimizing the cost of marketing efforts and overall operations. This would prevent providing products at prices below cost and hurting the performance of the firm. An effective marketing strategy should create a great impression of its brand and products to customers so as to gain their royalty and hence, increase market share and revenue (Pisano, 2015).
The establishment of the product pricing point should be based on the value, the pricing of substitutes and the sensitivity of customer to the price (Goi, 2009). The value of Pets.com products should be pegged on cost involved and high quality features that surpasses those of competitors. Lowering cost through technology adoption will lower prices below the market price. A product’s value should satisfy the needs of the products and features should match the use by customers (Goi, 2009). The product for Pets.com should only have features that will meet customers’ needs and avoid the ones that won’t actually be used. Place refers to where customers will find the product and how easily they can access it through the appropriate distribution channels (Goi, 2009). The online platform should enable customers to locate and select the product while establishment of strategic warehouses will make accessibility easy. Promotion refers to medium of communicating marketing messages to the target market of a firm (Goi, 2009). The use of social media and other online platforms will allow the firm to reach out to many potential customers in need of pets’ products.
References
McDaniel, C. D., Hair, J. F., & Lamb, C. (2014). MKTG 8.
Goi, C. L. (2009). A review of marketing mix: 4Ps or more?International journal of marketing studies, 1(1), 2.
Pisano, G. P. (2015). You need an innovation strategy. Harvard Business Review, 93(6), 44-54.
