11-15. Consider the retail marketing mix. How did Kmart differentiate itself from other retailers with its free shipping program?

Once the leader in discount retailing, Kmart long ago took a back seat to Walmart, Target, and others discount chains. But recent efforts to provide value to customers through innovation show that the veteran retailer may still have its edge. To gain a competitive one-up, Kmart started a unique program that combined the benefits of online and brick-and-mortar shopping.

When an item that customers wanted to purchase was not in stock at one of its stores, Kmart would ship the item to the customer’s home for free.

To launch this program, Kmart unveiled an ad campaign that illustrated an uncharacteristic relevance to younger, techsavvy customers. With the slight-of-mouth message that customers could “ship their pants” (or any of the other 65 million items in Kmart’s inventory) for free, the ad went viral. As a result, Kmart got its message out in spades, entertaining many while offending a few along the way.