LANDS END: NO END IN SIGHT TO SUCCESS

Hard to imagine that a company that began with a spelling mistake in its namethat to this day has not corrected the errorhas gone on to become one of the worlds largest direct marketers. Perhaps by fate, it had help from an executive who used to run the Sears mail-order operation. Today, Lands End is owned by Sears, which purchased it for close to US$2 billion in 2002. Better known for its retail operations, Lands End also has a sizeable B2B sales operation via its Lands End Business Outfitters. Its success in part is due to its suppliers and the relationships with them. According to the companys founder Gary Comer, We have learned to cherish those suppliers who share our obsession with quality, wherever they call home. He finished by saying, Frankly, we think the world of them, one and all! The other side of the supplier relationship is the buyers at Lands End, and they are guided by published business principles and quality standards. Organizational buying is a part of the marketing effort that influences every aspect of business at Lands End. As senior vice president of operations Phil Schaecher explains, When we talk about purchasing at Lands End, most people think of the purchase of merchandise for resale, but we buy many other things aside from merchandise, everything from the simplest office supply to the most sophisticated piece of material-handling equipment. As a result, Lands End has developed a sophisticated approach to organizational buying, which is one of the keys to its incredible success. The company started by selling sailboat equipment, duffle bags, rain suits, and sweaters from a basement location in Chicagos old tannery district. In its first catalogue, the company name was printed with a typing errorthe apostrophe in the wrong placebut the fledgling company couldnt afford to correct and reprint it. So ever since, the company name has been Lands End, with the misplaced apostrophe. When the company outgrew its Chicago location, founder Gary Comer relocated it to Dodgeville, Wisconsin, where he had fallen in love with the rolling hills and changing seasons. The original business ideas were simple: Sell only things we believe in, ship every order the day it arrives, and unconditionally guarantee everything. Over time, the company developed eight principles of doing business: 1. Do everything possible to make products better. Never reduce the quality of a product to make it cheaper. 2. Price products fairly and honestly. 3. Accept any return for any reason. 4. Have a goal to ship items in stock the day after the order is received. 5. Customer servicewhat is best for the customer is best for Lands End. 6. Place contracts with manufacturers who are cost-conscious and efficient. 7. Operate efficiently. 8. Make it possible for customers to shop for Lands End products in whatever way they find most convenient. These principles became the guidelines for the companys dedicated local employees and helped create extraordinary expectations from Lands End customers. These principles exemplify

excellence in marketing. Today, Lands End is one of the worlds largest direct marketers, with annual sales of traditionally styled clothing, luggage, and home products exceeding US$1.4 billion. The products are offered through catalogues, the Internet, and retail stores to customers in North America, Europe, and Asia. Lands End distributes close to 270 million catalogues annually worldwide, some of which are designed for specific segments, including The Lands End Catalog, Lands End Men, Lands End Women, Lands End Kids, Lands End for School, Lands End Home, and Lands End Corporate. In a typical day, catalogue shoppers place 40,000 to 50,000 telephone calls to the company. The Lands End website (www.landsend.com) also offers every Lands End product and a wide variety of Internet shopping innovations such as a 3-D model customized to each customer (called My Virtual Model); a personal shopper, to suggest products that match the consumers preferences; and a feature that allows customers to chat online directly with a customer service representative. Lands End also operates 20 stores in the United States, the United Kingdom, and Japan. It has separate websites for various countries, including a bilingual section on its main website just for Canadians. The companys goal is to please customers with the highest levels of quality and service in the industry. Lands End maintains the high quality of its products through several important activities. For example, the company works directly with mills and manufacturers to retain control of quality and design. The biggest difference between Lands End and some other retailers or catalogue businesses is that we actually design all the product here and we do all the specifications. Therefore, the manufacturer is building that product directly to our specs; we are not buying off of somebody elses line, explains Joan Mudget, vice president of quality assurance. In addition, Lands End tests its products for comfort and fit by paying real people (local residents and children) to wear-test and fit-test all types of garments. Service has also become an important part of the Lands End reputation. Customers expect prompt, professional service at every stepinitiating the order, making selections, shipping, and follow-up (if necessary). One way Lands End meets these expectations is by offering the simplest guarantee in the industry: Guaranteed. Period. The company also offers toll-free telephone lines open 24 hours a day, 364 days a year, continuous product training for telephone representatives, and 2-day shipping. The company End operators even send personal responses to all e-mail messagesapproximately 230,000 per year. The sixth Lands End business principle (described above) is accomplished through the companys organizational buying process. First, its buyers specify fabric quality, construction, and sizing standards, which typically exceed industry standards, for current and potential Lands End products. Then the buyers literally search around the world for the best possible source of fabrics and products. Once a potential supplier is identified, one of the companys 150 quality assurance personnel makes an information-gathering visit. The purpose of the visit is to understand the suppliers values, to assess four criteria (economic, quality, service, and vendor), and to determine if the Lands End standards can be achieved. Lands Ends evaluations of potential suppliers lead to the selection of what the company hopes will become long-term partners. As Mudget explains, When were looking for new manufacturers we are looking for the long term. I think one of the most interesting things is were not out there looking for new vendors every year to fill the same products. In fact, Lands End believes that the term supplier does not adequately describe the importance the company

places on the relationships. Lands End suppliers are viewed as allies, supporters, associates, colleagues, and stakeholders in the future of the company. Once an alliance is formed, the product specifications and the performance on those specifications are regularly evaluated. Lands End buyers face a variety of buying situations. Straight rebuys involve reordering an existing productsuch as shipping boxeswithout evaluating or changing specifications. Modified rebuys involve changing some aspect of a previously ordered productsuch as the collar of a knit shirtbased on input from consumers, retailers, or other people involved in the purchase decision. Finally, new buys involve first-time purchasessuch as Lands Ends addition of mens suits to its product line. The complexity of the process can vary with the type of purchase. Schaecher explains, As you get more complicated in the purchase there are more things you look at to decide on a vendor. Lands End faces several challenges as it pursues improvements in its organizational buying process. First, new technologies offer opportunities for fast, efficient, and accurate communication with suppliers. Ed Smidebush, general inventory manager, describes a new system at Lands End: Our quick response system is a computerized system where we transmit electronically to our vendors each Sunday night, forecast information as well as stock positions and purchase order information so that on Monday morning this information will be incorporated directly into their manufacturing reports so that they can prioritize their production. Occasionally, Lands End must work with its suppliers to improve their technology and information system capabilities. Another challenge for Lands End is to anticipate changes in consumer interests. While it has many years of experience with retail consumers, preferences for colours, fabrics, and styles change frequently, requiring buyers to constantly monitor the marketplace. In addition, Lands Ends more recent offerings to corporate customers require constant attention because business customers wants and incentives, and the environment in which theyre shopping, are very different from consumers at home, explains marketing manager Hilary Kleese. Finally, Lands End must anticipate the quantities of each of its products consumers are likely to order. To do this, historical information is used to develop forecasts. One of the best tests of their forecast accuracy is the holiday season, when Lands End receives more than 100,000 calls each day. Having the right products available is important because, as every employee knows, from principle four above, every order must be shipped the day after it is received.
Questions 1. Who is likely to make up the buying centre in the decision to select a new supplier for Lands End? Which of the buying centre members are likely to play the roles of users, influencers, buyers, deciders, and gatekeepers? 2. Which stages of the organizational buying decision process is Lands End following when it selects a new supplier? What selection criteria does the company use in the process? 3. Describe products Lands End buyers typically buy in each of the three buying situations: straight rebuy, modified rebuy, and new buy.