A1. Macy’s probably undertook the dramatic overhaul of its marketing strategy because the company might have discovered it was experiencing poor customer retention rates. In addition, the competition might have been getting more intense and profit margins declining, thus, the company decided to strengthen customer loyalty to protect and possibly improve profit margins by differentiating itself from the competition.
A2. It was important for Macy’s to use the knowledge it had gained about its target customers when making decisions about its merchandise assortments because the knowledge may provide Macy’s generate more revenue from its existing customers by understanding what they buy and what complementary products they may also be interested in. In addition, the knowledge will also enable the company to adopt more targeted marketing approach in which each customer is marketed products he/she is most likely to purchase. This will be especially true in online marketing including emails and product recommendations when a customer visits the company website.
A3. Macy’s has already observed the benefits of being a socially responsible company and it can explore more ways to strengthen its corporate social responsibility credentials. One strategy may be to offer customers an opportunity to choose a non-profit organization to which the company will donate a certain percentage of each sale such as 1-2 percent. Similarly, the company may also offer to match each employee’s donation to a non-profit according to a particular formula. Such a strategy may further strengthen customer loyalty because it will give customers an option to choose an organization of their choice and moreover, the customers will also feel good about themselves as each sale will enable them make a positive difference towards a social cause. Employees will also feel good about working for a company that encourages them to make difference in the society. This strategy may even win the company many new customers due to positive promotion in the media.