May 05, 2022 Uncategorized

Katerina Luxury Goods Boutiques Case Study Questions

Question Description

I’m working on a writing question and need an explanation and answer to help me learn.

Katerina is the regional manager of an international chain of luxury goods boutiques, Florentine Bravado. Each boutique, or store, is about 4,000 square feet, and features expensive watches, handbags, men’s and women’s suits, and jewelry. Michael Kors would be a direct competitor of Florentine Bravado. All twelve store managers in Katerina’s region report directly to her, along with a small administrative staff at regional headquarters. Florentine Bravado stores are located in upscale malls, and the company also sells merchandise online from the corporate location.

Katerina’s goal for the upcoming year is to stabilize or enhance sales at her twelve stores. Store revenues have been declining about 4 percent per year for the last five years, in both her region and the entire company. Katerina wants her region to standout by reversing this trend. Before holding in-person discussions with her store managers, Katerina sent out an e-mail to all the managers. The e-mail read as follows:

“What is happening to our cultural icon, Florentine Bravado? Are we falling prey to the same misery encroaching upon the many mundane retailers? Are our formerly loyal customers buying trinkets at discount stores instead of shopping at Bravado? Are our customers now purchasing knock-offs from overseas imitators?”

Three days later, Katerina met with Garth, the store manager located in the region’s most upscale mall. She said, “Garth what is wrong with you? We give you all the advertising support you need, and your results for the last quarter are putrid. I want to see a 3 percent improvement in your sales for next quarter. No moaning, no groaning, no excuses.”

Garth replied, “I would like to see a 3 percent or more sales increase next quarter also. Yet you are expecting too much. The holiday shopping season is behind us, and we can expect a normal sales decrease. Neither I nor my sales associates have found a way to drag people in the mall into our store and force them to buy a $9,000 watch or a $1,200 handbag. We have to deal with the realities of the economy.”

Katerina responded, “Garth, I told you at the outset. No moaning, no groaning, no excuses. Your goal is a 3 percent sales increase, and it’s not negotiable.”

Five days later, Katerina met with Sonya, the manager of a low-performing store. Katerina said forcibly, “Sonya I want you to understand clearly that your days of operating a low-performing store are over. Forget your European charm. Persuade the people who visit the store to walk away with a purchase. Get on the backs of those laid-back sales associates, and make them sell, sell, sell. The corporate group and I need you to boost sales. Do you understand my message?”

Sonya rebutted, “Katerina, I thought that you understood the luxury goods business. We are not selling kegs of beer to bar owners. Luxury consumers have to be gently coaxed to make a purchase like an $800 pair of cufflinks. He could easily purchase a pair of cufflinks for $15 that would get the job done.”

Katerina responded, “Nice try Sonya, but Florentine Bravado looks at the bottom line, not excuses. Show me some good sales results real soon.”

1)Which influence tactics does Katerina appear to be using, and how effective do they appear to be?
2)What other approach might Katerina take to getting her store managers to enhance sales?
3)To what extent do you think that Katerina is too abrasive in her role as regional manager?

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