Augustín did not experiment with the “Habla Claro” idea previous to rolling it out to all the Emilia store. Like Yashodhara writes in her respond, “The whole point of experimenting is to see what response you get and adjust your strategy accordingly.” However, Augustín was unable to capture the key flexibility portion of strategizing. He should have done more research about customer’s potential reaction to his new “educational” plan. During this process he would have learned that customers are very opposed to the idea, as they believe it to be “condescending” and thus driving down customer traffic and revenue. Second of all, during his talk with Nico, Augustín was very fast and instant on trying our the new plan “Figure it out” without any prior research or customer testing. His stern behavior on making sure the 4-yr plan carries out has blinded him from changing up his plan to better fit the ever changing situation. This would have ensure a prior notice to losing 211MM.
If I was consulted by Augustín, I would say to pause the new campaign and re-engage with current customers before just spitting out new campaigns one after another. This is because, fundamentally we want to break the positive feedback loop of customers loving discounts but also give enough shopping incentives so that revenue won’t be hurt. This really relies heavily on 1). changing customer base or enlarging customer base away from mid-age women (who are less careful about products not on sale) 2). doing heavily data analysis to find the perfect discounts Emilia should offer to customers. I think a combination of these two efforts should help resolve he current situation.
