GROUP 4

Shruti Mandal PGP/17/50

Ajinkya Pachghare PGP/17/128
Pratibha Pal PGP/17/158
Srilekha Bhattiprolu PGP/17/178
Srishty Barla PGP/17/179
Subrata Pradhan PGP/17/180
Harsh Naroliya PGP/17/208
CASE FACTS
Ann Starr Fashion Shop, exclusive fashion store for women in
Fairmont
Currently being run by Laura Taylor
Started in 1947 by Lauras mother
Enjoyed a reputation that few stores of any kind in the area
could match
Sales growth slowed a bit in past 2 years
Never competed on prices till now
Store offered good selection and services- most creative
displays in town and courteous, knowledgeable treatment of
customers
Facing competition from Hillmans, an off-price fashion goods
store, which has taken a large vacant store across the street
Started operations 5 years ago and successful in capturing a niche
Rapidly expanding Fairmont store was the ninth store
Strategy Buy fashion goods in job lots from well known
manufacturers and price 20% lower than the same brands in
department and specialty stores
Buy clothing from same suppliers as specialty and department stores
very close to actual buying season
Suppliers willing to sell in lots priced as package rather than on per
garment basis leading to lower costs
Sizes, colors and styles cannot be selected according to
predetermined plan
Targeted at moderately fashion conscious and highly price sensitive
customers
Not for customers who are highly selective, or those who wanted to
buy pre-season
HILLMAN
Bought unsold merchandise in lots from finest
manufacturers and retailers in the world, also
occasionally from Filenes upstairs stores
Lower prices as stock bought in lots without much
selection
Sources of supply were happy to sell off unsold stock
New stock given prime spot in store, and moved to less
desirable spot as it became older
Good promotions for new stock
Affluent as well as not-so-affluent customers visited
Filenes basement
Less fashion conscious, highly price-sensitive customers
FILENES BASEMENT MODEL
Segmentation Target Positioning
Desired Benefits :
Latest Fashion Outfits for
fashion conscious customers
Only Females
Higher Income Group
Sub Urban people
Trendy Products
Good Ambience
Creative Display of Products
Buying Frequency :
Once a month buyer
Seasonal Buyer
Fashion Conscious Shoppers Most complete assortment
of womens fashion wear
Awareness :
Unfamiliar Brand
Famous Brands
Upper middle and Elite class
people
Surety of size , colours and
styles
Friendly ,courteous
,knowledgeable and trained
Staff
STP ANALYSIS
STRENGTHS
Wide range of clothing
Desired size, colour and style made
more available
Pre season demands and booking
possible
Excellent customer service
WEAKNESSES

Going through a crest phase of the
sales wave
Inexperience with price competition
Only one store

OPPORTUNITIES
Filenes basement model
THREATS
Hillman store pricing and sourcing
strategy stealing market share
9 stores of Hillmans providing large
discount on procurement in bulk
against single retail store (Ann Star)
SWOT ANALYSIS
Partial Basement Model
Complete Basement Model
Hillman Model
Maintain Original Business Model
1
4
3
2
ALTERNATIVES
1. PARTIAL BASEMENT MODEL
PROS
Able to sustain her home
business
She can still be able to operate
of the store as an exclusive
dress store and the other half as
a budget shop
Increased Income would
support an increased
promotional budget
Need not to worry about the
unsold items
Can attract huge customer base:
Elite as well as Middle class
segment
Increased offerings
CONS
Fear of Cannibalization
Adverse effect on the brand
perception
Price war
Consumers might not be able to
differentiate between the low
priced and high priced items
2. COMPLETE BASEMENT MODEL
PROS CONS
Successfully running model
Unique sales strategy
Offered at very attractive price
Transformation of business model
Change in targeting segment to less
fashion conscious and price sensitive
segment
Deviating from a model where they
have sufficient competency
Raising the retailer bargaining power
Dependency on retailers can result in
fluctuating sales
3. HILLMAN MODEL
Pros Cons
Following the Hillman model they can
buy in lots at less price by waiting until
the last minute before the season

Draw the interest of segment that is
fashion conscious as well as price
sensitive
Going in direct price war with Hillman
Ann star would lose because of Hillmans
economies of scale

Ann Star would get lesser margin as
compared to its original model(earlier
50% markup)

Ann Star would compromise on being
the most exclusive store for woman in
Fairmount
4. MAINTAIN ORIGINAL MODEL
Pros Cons
Has premium brand image
Capitalizing on their strength - offering
wider selection and better service
Be the first to offer any new trend in
fashion
Higher per unit margin
No price war with Hillman
Cater to premium segment
Feel the competition pressure after
entry of Hillman
Might be reduction in sales volume
Completely loosing on price sensitive
segment

Option 4: Maintaining the original model
Cannot follow Basement model
adverse effects on brand perception
difficult to implement in a local suburb
less differentiation compared to Hillman model
When Hillman enters, the market gets segmented into
Highly fashion conscious customers willing to pay premium (Ann Starr)
Moderately fashion conscious yet price sensitive (Hillmans)
It would be difficult to compete with Hillmans in price sensitive
segment with Hillman having higher economies of scale
The present prices to be maintained to compensate for volumes lost
due to competition
A premium to be charged
(Value based Pricing)
Customers would be offered
the latest products before it is
made available to the regular
customers
Would be provided customized
benefits such as personalized
notifications on new arrivals
and expert guidance

Promotion activities to focus
on the wider range of
selection and the Service at
Ann Starr, projecting the
products as status symbol
New system of Exclusive Preview to Loyal Customers to be
introduced