Tuesday, July 24, 2012

Duane Reade’s Miracle Makeover entire Case Analysis

Duane Reade’s Miracle Makeover entire Case Analysis Report

“Duane Reade’s Miracle Makeover”

1.      The New York City-based Duane Reade drugstores have undergone what some would consider a ‘miracle makeover’ in re-positioning their retail stores.  Based on our discussions of marketing strategy, consumer behavior, and brand positioning, how did they accomplish this?

Duane Reade began the makeover process by building a new concept to its stores which made customers to think Duane Reade drug stores are not a place to visit but rather a place to be. Duane Reade researched its consumer buying behavior by focusing on the culture, lifestyle, subculture and social class of its New York customers. Duane Reade positioned its stores  as an all in one easy to shop destination by offering medical, grocery shopping, leisure  and dining in one convenient place for its busy New York city customers.
Duane Reade succeeded by fully understanding its customers’ buying decision process by focusing on the different stages of the consumer buying process .Through information search they recognized the problem the customers were facing so they widened the aisles, lowered the height of the shelves, installed better lighting, and removed the posters and displays from windows and changed their queue system. Their redesigned logo “Your City. Your Drugstore.” shows how they addressed geographically concentrated customers of New York city and  in other NY cities they operated.
Duane Reade realized that it has to change the business inside and out to be successful .Duane Reade‘s new store design, private brand re-launch, merchandising mix changes, pharmacy re-focus, new departments, loyalty, improved customer service were all aligned with Duane Reade’s successful brand transformation and helped them position their brand to occupy a distinctive place in the minds of its consumers and target market. Duane Reade’s brand association functioned as a point of difference and helped them succeed. This can be seen by the way they differentiated them from competitors like CVS, Rite Aid by offering an all in one stop shop where customers saw the brand association as personally relevant to them and which fitted their busy New York life and culture. They also used their European and Canadian experience to bring some private label products like Delish and they made their own brownie bites, gummy bears, steel-cut oats, and tomato basil soup which made consumers to visit their store more often.
Duane Reade still has some transforming to do because this year it again ranked last among pharmacies in customer service, as measured by J.D. Power. Though Duane Reade is under new Walgreen’s management, it’s still staffed with the same people and managers from the old Duane Reade’s store so Duane Reade must invest in personality development and training programs to its staff so that it can improve its customer service. Walgreens should plan to bring the Duane Reade brand to a national audience from its New York alone stores so that it can increase its market capitalization.
Duane Reade is in a constant battle with small business owners of New York because of its diversified products it is selling. By selling sushi, frozen, yogurts, draft beers it's homing in on the customer base of nearby dessert/restaurant/bar stores. It is very important that Duane Reade maintains a high quality, low cost products to meet the challenges from their competitors.
One way to expand brand awareness is to increase the use of the Duane Reade brand, they can do this by making the product easier to use-like “small Fun size” packaging and they should sell them in their parent Walgreen’s store. They should also have their products with a benefit like “Supporting Breast Cancer”. Duane Reade should use social networking websites to create awareness of its new products to its Duane Reade fans by doing this Duane Reade can establish a strong brand community which will result in a more loyal, committed customer base.

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