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Unformatted text preview: for its organic cotton products and would pass this differential on to its customers.
Using an early example of an organic baby outfit, Schommer described the pricing strategy: “A
little organic shorts set was maybe $10.94, while a similar non-organic outfit would have been
priced at $6.94. So, yes, there was a price premium compared to other Walmart products. But
when you consider a $10.94 organic shorts set out there in the marketplace, that’s not
expensive.” Over time, as more farmers moved into organics and greater efficiencies were
achieved in processing, the premium associated with organic products would likely decline.
Restructuring the Buyer Role
To better manage relationships with suppliers, the textiles network implemented a major
organizational change: It redesigned its buyer role. In the past, textiles buyers had been
generalists, handling a wide variety of responsibilities (as buyers did in other product categories).
The textiles network divided this function into four different job categories: Merchandising (buyer) – Focused on the customer and understanding what the product
assortment should be to best meet the customer’s needs.
Product Development – Focused on product design and trend executionmarrying
what the buyer says the customer wants with what the trends are in the marketplace to
help drive the development of the product.
Technical Services and Sourcing – Focused on creating the technical specifications for
each product, deciding how to package it, and determining the best sourcing strategy,
including supplier negotiations, pricing, and quality.
Planning and Execution – Focused on financial planning and in-store execution (how to
get the product to the stores, quantities, product flow, store layout, etc.). In the new model, representatives from each of these four “centers of excellence” were colocated as members of a tightly integrated product team. Each one was given the opportunity to
become a spet and to take a more strategic approach to their role. For example, buyers
were intended to develop...
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This note was uploaded on 01/14/2014 for the course LGST 210 taught by Professor Sep during the Winter '10 term at UPenn.
- Winter '10