Marketing Management

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Assignment No 3: Case Study
Learning Outcomes:
1. Demonstrate the ability to formulate marketing strategies that incorporate psychological and sociological factors which influence consumer’s decision. (Lo-3)
2. Develop critical and analytical thinking necessary to overcome challenges and issues of marketing in the changing global environment. (Lo- 4)

Case Study
Read the Chapter Case Study entitled “ASHLEY STEWART” from Chapter- 17 “Retailing and Omni-channel Marketing” Page:535 given in your textbook – “Marketing” (7th Edition) by Dhruv. Grewal and Michael. Levy (2020) and answer the following Questions:
Assignment Question(s):
1. Describe Ashley Stewart’s retail strategy using the 6 Ps. (2 Marks)
2. Who is Ashley Stewart’s target market? Could/should that target market be expanded? Explain. (1.5 Marks)
3. What are Ashley Stewart’s bases for sustainable competitive advantage? Discuss. (1.5 Marks)

Answers

1. Answer-

2. Answer-

3. Answer-
Chapter Case Study
ASHLEY STEWART43
An auditorium full of graduate and undergraduate students was
eager to hear what James Rhee, the CEO of Ashley Stewart, the
largest plus-size retailer in the United States, would have to say.
How did a middle-aged Korean American man turn around a
struggling brand that catered primarily to African American
women? But Rhee was accustomed to such questions and ready
to answer them.
Founded in 1991, Ashley Stewart was named after two distinct
style icons: Laura Ashley and Martha Stewart. The founder
Joseph Stint sold his shares of the company in 2000. The
following decades saw some challenges, such that the company
filed for bankruptcy in 2010 and then reorganized again in 2014.
But by that point, Rhee—inspired by the brand’s promise and its
connections to its customers—had resigned from his position on
the board as an investor in the retailer to become its
CEO.44 Today, Ashley Stewart maintains just shy of 100 stores in
the United States and a global e-commerce platform, helping
curvy women around the world find beautiful fashions that fit.
Ashley Stewart is the largest plus-size retailer in the United States.
©Amy Sussman/Getty Images
So how did a former high school teacher and hedge fund
manager manage the success of a fashion brand?
Industry Environment and Ashley Stewart’s
Position
Approximately 67 percent of U.S. women wear sizes 14 to 34;
however, many companies still don’t offer efficient options in
this category. Therefore, the plus-size apparel industry accounts
for only approximately $20 billion of the $108 billion apparel
industry. Still, it is one of the fastest-growing categories in
fashion.45 Whereas once the fashion industry ignored this
segment and focused almost exclusively on wearers of smaller
sizes, today, retailers cannot ignore this segment. Sales of
women’s plus-size apparel have increased almost 17 percent
from 2013 to 2016.46
Just like every other retail setting, women’s fashions also have
been influenced by the growth of the Internet. As the number of
digital shoppers continues to increase, virtually every brand is
seeking a space to establish itself in the digital world, to attract
attention and expand its reach through traffic to either its
website or its stores. At www.ashleystewart.com Page
535customers find bright colors, and stylish models sporting the
latest trends. The visually attractive looks for every season also
promote web-exclusive collections to customers.
But in the early 2010s, Ashley Stewart did not even have Wi-Fi at
its company headquarters. Corporate decisions mostly were
based on “gut” perceptions, rather than data. Its e-commerce
platform was antiquated. Turnover among employees was high,
and the corporate culture was described as fearful,47 leaving the
brand without any real credibility. Following more than a decade
of losses, the company seemingly had lost its way: Employees
were angry, customers were annoyed, and investors had lost all
hope.
But Rhee saw something in the brand. In his own words, he
“loved the brand and everything it stood for. Ashley Stewart had
been founded to provide plus-size fashion for women in
boutiquelike settings in urban neighborhoods across the United
States. After listening to our customers, I came to realize that the
brand stood for more than that—values like respect,
empowerment, and joy. Despite the company’s history of failure,
I believed that the brand could capitalize on several macrocyclical trends with a reinvented business model.”48
A graduate of Harvard Law School, James Rhee had been a high
school teacher and private equity investor, with no experience in
the fashion industry. So he adopted a teaching-oriented
philosophy and applied hedge fund policies to the effort to save
the brand.
Rhee’s Philosophy
Rhee focused on a few core principles that led to the turnaround
of the company. He relied on numbers and math, sought to
reinvent the company culture, adopted a central focus on the
core customer, encouraged continuous innovation, and—
perhaps above all—prioritized kindness.49
Rhee understood that customers would behave differently on
different days, so Ashley Stewart’s business model and
algorithms would have to adapt to customers’ varying behavior.
Using sophisticated analytics and data, he improved the flow of
goods through the supply chain, which also sped up the arrival of
new fashions into stores. Furthermore, Rhee insisted on updated
technology in all realms of the business, so that it could offer
standardized IT and e-commerce operations. Preferring
measures that could not be manipulated, Rhee focused on
loyalty, returns on investment and capital, and time
assessments. Moreover, “When we were re-writing all of the
planning algorithms and business reports, the math and
operational discipline was done at the level at which a blue-chip
investment firm would operate.”50
These changes were also part of the reinvented culture, along
with physical changes, such as knocking down all the walls in the
corporate headquarters to encourage an open-door policy. The
company stopped using virtually all of its formal job
descriptions. Instead, the goal was a culture that relied on
mentoring and teaching, as well as a services-oriented approach.
In response to the radical changes, approximately 40 percent of
the employees at corporate headquarters left, but those
remaining were dedicated to the new culture.51
This new services-oriented culture also entailed a reinvigorated
focus on the core customer, the “she” who is embodied in the
very name Ashley Stewart. In every decision, Ashley Stewart
considers what “she” might want and ensures it is respecting
“her,” such as through enhanced customer service and customer
engagement. This “she” is critical to everything associated with
Ashley Stewart and part of the reason Rhee even attempted the
turnaround: “If this was a business that sold widgets or old
expensive neckties for rich guys, I wouldn’t have done
this.”52 This brand somehow had persisted for decades, without
making any consistent profits. It was able to do so simply
because “she” loved Ashley Stewart, which provided “her” with
beautifully merchandised stores, where each customer is greeted
by “Ms. Ashley,” the store manager. Once customers found the
stores, they stayed loyal to them; Rhee even recounts meeting
three generations of women from one family coming together to
shop in a place they felt comfortable and respected. With its
segmentation and targeting focused primarily on African
American plus-size women, Ashley Stewart also provided a safe
space for a frequently marginalized population—another reason
Rhee was drawn to the sinking brand. When he looked at
customers in stores, he observed that their body language
signaled more confidence, reminding him of how his mother,
who emigrated from Page 536Korea, would exhibit pride and
satisfaction when she walked into a Korean store. It was these
emotions that he wanted customers at Ashley Stewart, the allimportant “her,” to feel when they walked into any store.53
But a comfortable store is not enough to attract repeat visits by
fashionable shoppers if it does not continually offer new looks.
Ashley Stewart seeks to get new options in stores within six to
eight weeks. Its assortment is extensive and includes clothing,
swimwear, shoes, and accessories. Furthermore, noting that
larger sizes were stocking out quickly, Ashley Stewart recently
added more extended sizes to its collection.54 Most
manufacturers charge retailers more for larger sizes, but Ashley
Stewart refuses to pass on this additional cost to its customers,
so the fast fashions also remain affordable for consumers.
Outside the stores, innovation also is the hallmark of Ashley
Stewart’s reinvented website. The brand refers to itself as a real
person—that same “she” who is respected throughout the
company. With this personalized phrasing, Ashley Stewart
connects with other “Neighborhood Girls Gone Global,”
reminding them of how someone or something local can engage
communities all over the world and succeed globally, such as
when it promises, “With roots based in New York, my mission
has always been to inspire you. . . . I want every woman to
cherish her curves. After all, they’re what make us sexy,
confident, and fabulous. Ashley Stewart is a sisterhood, your
best girlfriend next door. Join me—you fit in here.”55 For its 25th
anniversary, the retailer hosted a Rock the Block party in
Brooklyn, a fun event that garnered more than 15 million social
media impressions.
Its social media presence also is marked by its overriding
philosophy of kindness, which Rhee calls the company’s “core
strategic pillar.”56 For example, in a nationwide campaign, the
#LoveYourCurvesTour, Ashley Stewart worked to connect with
loyal customers by hosting fashion shows, model hunts, and
shopping parties in Atlanta, Chicago, Philadelphia, Baltimore,
Detroit, and New York. Encouraging women to celebrate their
curves, the brand reaffirms its respect and appreciation for its
customers. This appreciation also was evident in its
#MOMspiration campaign, which encouraged customers to
submit pictures of their mothers or daughters that depicted a
meaningful memory they shared—perhaps one made while
shopping at Ashley Stewart. In its philanthropic efforts, such as
#ASGives, it also partners with charities that support local
communities, raises money for cancer research, donates clothes
and shoes, and grants need-based scholarships. Even in the
midst of the company’s bankruptcy and reorganization in 2014,
Rhee insisted on introducing a generous charitable program
during the holiday season, to remind the company of its need to
stay true to its core values.
What Does the Future Hold for Ashley Stewart?
By most accounts, Rhee’s efforts at Ashley Stewart have been a
huge success. The corporate culture is healthier. Sales growth
has hit double digits over the past few years;57 e-commerce sales
account for 35 percent of total sales.58 In addition to its robust
sales, Ashley Stewart is widely recognized as one of the world’s
most engaging sites on social media, ranked among the top 10 in
terms of its website’s active engagement with customers through
Facebook.
But the outlook is not all rosy. In its continued efforts to market
the brand, Ashley Stewart has run up against rules imposed by
Google’s AdWords against targeting customers using terms that
refer to their body type. Thus, any advertisement that promotes
the brand as dedicated to curvy or plus-size women would be
rejected from this popular and effective advertising channel. The
policy has a respectful aim, yet for a retailer that relies
specifically on body type to segment its market, it creates an
impossible dilemma.59
But facing an auditorium of interested students, James Rhee still
predicts the continued success of the brand, as long as “she”
continues to embrace the core principles that have gotten her to
where she is today.
Questions
1. Describe Ashley Stewart’s retail strategy using the six Ps.
2. Who is Ashley Stewart’s target market? Could/should
that target market be expanded?
3. What are Ashley Stewart’s bases for sustainable
competitive advantage?