Blue Nile Case

Blue Nile Case

(a) [10 pts] Compare Blue Nile, Tiffany, and Zales in terms of competitive strategy, brand image, and service factors.

| Blue Nile | Zales | Tiffany |

Competitive strategy | BN offers low-pressure selling tactics that focused on education. The low-pressure selling approach had great appeal to a segment of the population. BN provides value to customer by offering a lower markup of 20-30 percent due to lower inventory warehouse expense. | The marketing strategy was to offer a credit plan of “a penny down and a dollar a week.” In 08/2006, Zales started to return to its role as promotional retailer focused on diamonds fashion jewelry and rings. However, the strategy did not work out. It lost many customers as well as wrote down inventory loss of $26.4 million as a result. | Tiffany aimed to open smaller stores to carry a reduced selection of merchandise to focus on high-margin products. Tiffany maintained its own facilities but also source to a third party. The company had a separate customer fulfillment center for processing direct to customer orders. |

Brand image | “Offer high-quality diamonds and fine jewelry at outstanding prices”. BN provides customers extraordinary jewelry, useful guidance and easy-to-understand jewelry education that is perfect for their occasion. | Zales’ goal was to make the jewelry more upscale and fashion conscious, moving away from its promotion-driven, lower-end reputation. | The company is famous with “Tiffany setting” for engagement rings. Tiffany’s high end products included diamond rings, wedding bands, gemstone jewelry and greenstone bands with diamonds as the primary gemstone. |

Service factors | Blue Nile allowed customers to “build your own ring” based on the 4C’s - cut, color, clarity, and carat. BN displayed all stones in inventory that fit the customer’s desired profile. Blue Nile also allowed customers to have their question resolved on the phone by sales reps who did not work on...