Lowe’s Marketing Mix
Introduction : -
Lowe’s is the second largest home improvement brand in USA and the world. Ranked among the top 50 in the Fortune 500 list, Lowe’s serves more than 18 million customers a week in US, Canada and Mexico. However, the brand has decided to exit the Mexican market. US is its largest source of revenue accounting for around 92% sales in 2018. Number of stores run by Lowe’s and related brands grew higher than 2200 in January, 2019. The company had a solid fiscal year 2018. Net revenues of Lowe’s in 2018 were higher than $71 billion. The home improvement sector is very large but fragmented and currently valued at around $900 billions.
Lowe’s is a customer focused brand whose President and CEO is Marvin R Ellison. The company was founded by a World War II veteran and has been supporting the military community actively. Carl Buchan founded the brand in 1946 and the company has kept increasing its support for military community in the form of discounts and employment. A large number of associates at Lowe’s have a military background. Depending upon the market situation, Lowe’s is expected to sustain its growth momentum in future. Learn more about Lowe’s and how the company has utilised a balanced marketing mix to achieve superior growth.
Product : -
Lowe’s operates mainly in the US market which accounts for the largest part of its net revenues. The company sells a large range of home improvement products including construction, maintenance, remodeling and decoration products. A typical Lowe’s home improvement store stocks around 34,000 items and several more thousands are available through its special order sales system and online sales channels.
Private brands are also a very important part of its product portfolio. Lowe’s sells private brands in many of its product categories. Most important among its private brands include Kobalt, Allen Roth, Blue Hawk, Project Source, Portfolio, Garden Treasures, Utilitech, reliabilt, Aquasource, Harbor Breeze and Top Choice.
Lowe’s sells three main categories of products that are described below:
- Building & Maintenance : Lumber & Building Materials, Millwork, Rough Plumbing & Electrical, and Tools & Hardware.
- Home Décor : Appliances, Fashion Fixtures, Flooring, Kitchens, and Paint.
- Seasonal : Lawn & Garden and Seasonal & Outdoor Living.
Building & maintenance is the largest category of products sold by Lowe’s followed by Home Decor and Seasonal. The remaining products sold by Lowe’s are included in the 'all other' category. Among the customers of Lowe’s are individual homeowners, renters and professional customers. The company has brought a large range of products that are meant to cater to all their home improvement needs.
Place : -
The core market of Lowe’s is United States. However, the company also operates in Canada. In fiscal 2018, the company generated $65.8 billion from United States market and around $5.4 billion from the international markets. In 2018, Lowe’s has decided to exit the Mexican market. Total number of stores operated by Lowe’s and related brands was 2,246 in 2018 and the number of Lowe’s stores 2,015. The company sells from its stores as well as online channels.
Lowe's omni-channel sales capabilities have continued to grow stronger with each passing year. Customers can pick the purchases they have made online from Lowes.com, from a nearby store or get it delivered to their doorstep from a store or their purchase parcel shipped to them. Other flexible fulfilment options are also available for purchases made in stores or at the contact centres. The company strives to provide a seamless experience across all its sales channels. Customers can make purchases 24/7 from the company’s websites and apps.
Price : -
Lowe's has used a competitive pricing strategy which translates into heavy sales and profits. Like Walmart, Lowe's has also used the EDLP formula to win customers. The company guarantees Everyday Low Prices whether you are shopping inside a store or online from Lowes.com. If a customer can find lower prices at another seller, Lowe's is willing to match the price. A customer just needs to show a recent ad or app or a print out.
Moreover, when a customer purchases online and selects home delivery or store pickup, he gets the lower of the online and local store prices. To prove its commitment to lower prices, Lowe's has also introduced 'New Lower Prices'. If the costs fall for Lowe's, the company reduces the prices for the customers. People should check for a yellow mark labelled 'New Lower Price' on the ads, at the store or on Lowe's website. Lowe's is committed to customer savings and service and consistently looks for methods to bring products at the least prices for its customers throughout USA and Canada.
Promotion : -
Lowe's uses both digital and offline tools and channels for marketing and sales. Apart from its websites and apps, the company also uses in store promotional material. It has created strong brand recognition which is also one of the primary drivers of demand. The pricing strategy of Lowe's has also played a strong role in making it a popular home improvement brand. EDLP continues to drive growth in Lowe's customer base.
Lowe's was founded by a World War II veteran and has maintained strong relationships with the military community. Apart from having a large number of associates with a military background, the company also offers special discounts for the military personnel. Its supplier diversity program also supports veteran owned suppliers. Lowe's has been recognized as one of the top ten military friendly brands. The military heritage of Lowe's also sets it apart from the competition.
The home improvement industry is marked by heavy competition. Lowe's competes with a large number of national and international home improvement warehouses as well as traditional hardware, plumbing, electrical, home supply retailers and repair and maintenance organizations. Despite the heavy competition, the brand has managed a distinct position of No 2 brand. Its culture is an important element that has strengthened its unique identity and brand recognition. The in-store environment, the work culture and customer orientation of Lowe's have all fuelled its growth in the home improvement market. The company also promotes its distinct image through its special dress code. Associates wear red vests with the logo. Veterans have special badges on their vests. While it helps present a consistent image before the customers, it is also a great branding tool that emphasizes customer focus.
Advertising is also one of the major promotional tools used by Lowe's. Time to time, the brand runs advertising campaigns to churn excitement and demand. In early Feb. 2019, it launched its 'Do it Right for Less : Start with Lowe's Campaign.' The campaign has been successful and received a lot of media coverage. Lowe's is also using social media actively for customer engagement and promotions. It is a customer focused brand and uses a large variety of marketing and promotion tools and channels to churn demand and achieve growth.