Steinhauer Marketing Mix

Industry Environment Upon Starting

Two main aspects aided Ms. Steinhauer when she founded Bargains Group in 1987. Firstly, the limited competition in the off-pricing retail industry and then the positive growth of the latest helped her to find the path for success.

The competition in the discount/off-profit industry was not as fierce in 1987 as it is today. Being a wholesaler selling to retailers, Bargains Group targeted a niche market for their market entry strategy. At this point, in Canada, no other business was providing shirts and socks at such inexpensive prices, and the discount industry was nowhere near what it is today. As Ms. Steinhauer stated: “There really was not a discount industry back then. There was no Dollar Stores, Wal-Mart,

During the 1980s, the off-pricing industry was on the rise; first in the United States, then in Canada. Many statistics demonstrate the prosperity of the industry during the 1980s.

Off-price items were expected to grab between 20% and 25% of the clothing market by the end of the decade (Marketing News, 1987); some 10,000 stores were selling off-price clothing, accessories, and footwear nationwide in the United States (Marketing News, 1987). In fact: “by mid-1985, more than 300 malls dedicated to off-price shopping had sprung up” (Higgins, 1986); and the American Marketing Association even cited off-price retailing as the ninth in its series of Great Marketing Ideas in the Decade of Marketing. (Marketing News, 1987)

Many reasons explain this off-pricing retailing success in the early-1980s, such as the demise of the “fair-trade” law, the growing demands for name brands and the disenchantment with traditional retailers. (Marketing News, 1987) There were also the benefits for the marketers and manufacturers. It enabled them to assure more risk, since they could more readily recoup due to lower margins, and to strengthen their cash flow, because payments for merchandise were received immediately. (Marketing News, 1987) Finally, during that period, the Banking Crisis of the 1980s happened, which forced families to be price savvy in their shopping. Thus, they were inclined

Steinhauer explained that, for her, success was not linked to financial gains, but to survival. Truly, each and every wholesaler who sold to retail stores when she launched the start-up went under, except for Bargains Group. This is mainly due to Ms. Steinhauer’s frugality as an entrepreneur. Indeed, in the early days of the business, she made sure not to spend money where it was not necessary. As she recalls, “I was not entrepreneurial like a lot of my circle of friends of entrepreneurs were; who went out and bought a Porsche and had fancy offices, and all this stuff” (J. Steinhauer, Telephone Interview, 2018, March 11th). This frugal approach, which probably comes from her father, who taught her all the basics of accounting, helped the business to make money from day one. Otherwise, the stellar reputation Jody built in her previous jobs, helped greatly when starting her company her company. As mentioned above, vendors entirely financed her business in its early stages, simply because she had the reputation of being hardworking and trustful. Finally, since the beginning of the venture, she has always been really good at diversifying her business, which is shown by her company’s multiple divisions. As she mentions: “I was always careful of diversifying enough so that if one kind of area went down a bit, the other area would sustain it. I think that this was a big thing I did” (J. Steinhauer, Telephone Interview, 2018, March 11th). A good