SECTION A

Read the case study below and answer the questions that follow

Mens Wearhouse: Adding Complementary Merchandise and Services to Bring Value to Customers

Mens Wearhouse, Inc. is one of the largest discount mens apparel companies in North America. The first location of this mens specialty store was opened in August 1973 in a strip shopping center near Houston, Texas. Thirty years later, Mens Wearhouse operates 693 stores in 44 states in America and 10 provinces in Canada under the Mens Wearhouse, K&G and Moores brand names.

MERCHANDISE

Mens Wearhouse sells high-quality mens clothing at prices 20 to 30 percent lower than department stores. This retailer specializes in suits and other tailored business apparel. Other merchandise offered includes dress shirts, slacks, sports jackets, and sweaters. As many businesses moved to a more casual dress code, Mens Wearhouse responded by increasing the casual dress code, Mens Wearhouse responded by increasing the casual business clothing selections in its stores. This retailer offers both national branded attire and its own private-label brands. Mens Wearhouse also sells accessories such as ties, belts, and shoes. In 1994, the company successfully added Big-and-Tall sizes to its product offerings.

LOCATION

Mens Wearhouse stores are located in strip shopping centers adjacent to residential areas. This proximity to the shoppers home is a benefit for customers who must visit the store twice, once to select a suit and a second time to pick up the garment after it has been altered. Locating outside of malls in strip shopping centers allows for a generous store size (between 4,000 and 4,500 square feet) while still controlling costs associated with rent. Executives at Mens Wearhouse also observed that men prefer to stay away from a crowded mall when shopping for clothing.

PROMOTION

Mens Wearhouse uses a variety of media to inform and remind customers about its stores, merchandise, and sales events. The companys founder, Chairman, and CEO, George Zimmer, is the gravelly voiced spokesperson featured in both television and radio advertisements espousing the companys memorable tag line, Youre going to like the way you look. I guarantee it.

SERVICES

Mens Wearhouse is known for having a well-trained sales staff that can assist customers with their wardrobe selection. In addition to helpful sales associated, each tailored item can be brought back to the store for free pressing when needed. All stores have an in-house tailor to make the necessary alterations to ensure the desired fit for each garment. Another service offered at Mens Wearhouse is the Perfect Fit Credit Card loyalty program. This frequent shopper program lets repeat customers charge their purchases, earn points toward discount coupons, and save 5 percent on all purchases placed on the card.

GROWTH STRATEGIES

One of the most profitable additions to the services provided by Mens Wearhouse is the tuxedo rental business. Mens formalwear has been offered since 1999 in the United States and represented $51 million in sales in 2003. This service offering has been so strong that it encouraged the company to expand the floor space in the stores, move into the dry cleaning arena, and being a test for womens bridal wear.

Because tuxedos need to be dry cleaned between each prom and wedding party, Mens Wearhouse quickly saw the importance of acquiring a dry cleaning chain and expanding into this business. Currently, the $7 billion dry cleaning industry is comprised primarily of small, single-facility, family-owned operations.

To launch the womens formalwear concept, Mens Wearhouse is test marketing two locations of its new bridal shop, Bride and Joy, in California. These stores will offer convenient shopping for the women in the bridal party including the bride, brides maids, and the mother of the bride. The test stores will be located next door to Mens Wearhouses in approximately 3,000 square foot stores.

QUESTIONS

Mens Wearhouse successfully added tuxedo rental to its merchandise offerings in 1999. Now this retailer plans to add womens bridal wear and the service of dry cleaning. List the three advantages and two disadvantages for each of these growth strategies. (10 marks)

Identify and list five other relevant merchandise and services which Mens Wearhouse could add to reach a new segment of the market, benefit customers, and grow its business. (10 marks)

Source: This case was written by Hope Bober Corrigan, Loyola College in Maryland.