Circle K

Marketing Strategy

The Circle K Corporation

Case Discussion Questions

1. How would you characterize the convenience store industry in 1990 (competition, product mix, differentiation, size and growth rate, etc.)?

2. What problems does Circle K face? Consider problems related to each element of the marketing mix. How has this affected revenue and profitability? Which are easily fixed? Which are not?

3. Circle K has announced a turnaround strategy that impacts each element of the marketing mix. What are the key elements of this strategy? Which, if any, elements of the strategy are likely to work? Explain your reasoning.

Perform a detailed SWOT analysis to understand the competitive situation.

Does the SWOT imply what Circle K must do to get out of its mess? Is it doable? What actions would you take?

Evaluate the wisdom and likely success of proposed pricing, promotion and merchandising plans

Which of the following strategies makes sense?

1. 10% price cut

2. $100 million advertising/promotion program

3. Tailor merchandising to trade area demogaphics

1. How would you characterize the convenience store industry in 1990 (competition, product mix, differentiation, size and growth rate, etc.)?

Circle K

• 4631 stores in the U.S., about 6.6% market share. 84% of stores in sunbelt states. Growth by acquisition spurred sales and profit increases for awhile.

• Strong growth in 1980’s, 25% per year sale growth since 1984 and 25% profit growth from 1985 through 1987 (note: but not per unit).

• Filed for bankruptcy in 1990 dues to debt burden and misguided pricing and merchandising policies.

Industry

• Fragmented. The industry is highly fragmented with 1,353 companies. Small chains with fewer than 50 stores account for 42% of stores and 31% of sales.

• Mature. There is strong evidence that the industry is maturing. At the very least, the presence of stores is saturating, at...