Retail Market Strategy

Session: 7 Prof : Yasmin

Yasmin

Definition of Retail Market Strategy

Is a statement which defines the orientation of a firm in terms of the target market that it wishes to cater to, the retail format that it proposes to build and the retail mix variables that it chooses to gain competitive advantage and sustain its position in the retail market. Goals and objectives of a retailer can be numerous Understanding of the target market and retail format is

of utmost importance for a retailer

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Retail Market Strategy

Target market: is the most profitable market segment Retail Format: suggests the type of retail mix, pricing policy, advertising, location etc that will satisfy the needs of its target market Sustainable Competitive Advantage: is the advantage over the competition that is not easily copied.

Store Image and Target Customers

Think of your own experience of shopping, why do you go to a particular grocery shop, hair salon, or restaurant? Elements of a customers view of a store
Size, newness, type of fixtures, location Frequency of advertising

Store Image and Target Customers

The retailers image is a result of
The way business is carried out The location from where the business is operated The physical appearance of the store Number and genuineness of the sale After sales experience Honesty and dependability

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Sustainable Competitive Advantage

The retail strategy is guided by five dimensions

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Price Location Merchandise Service and Communication

The above core dimensions are supported by everyday functions

Operation Purchasing/ logistics Market research Financing and Technology
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Location

Merchandise

Price

Service

Communication

Quality And Customer Satisfaction

Operations

Logistics

Finance

Purchasing

Technology

Market Research

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Location
It is the location that determines the customers traffic for a store The presence of number of stores in a particular area can prove beneficial due to increase in

customer traffic
Healthy competition encourages them to perform better and provide better bargains for the customers
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Merchandise
Merchandise mix refers to the total range of products that a store offers to its customers

The identity of the store is linked to the merchandise

that they offer Retailers differentiate themselves from others on the

basis of the merchandise that they offer by creating in

house brands The merchandising strategy can be examined by the

assortment that they offer

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Price
It is difficult to achieve high turnover and

high margins
It is difficult for a retailer to sustain in the market if they have a low turnover Wal-Mart adopts a high turnover low price strategy where as J C Penny adopts a low turnover high price/margin strategy
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Service
The kind of service appropriate for each store would be different and should be determined by the managers

The quality of both the basic and associate services being

offered by the retailer are important If the retailer offers high level of customer service then it should be justifiable by the kind of pay off the retailer receives Which could be in the form of retained customers or increased sale

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Communication
The marketing strategy of the retailer would be incomplete and ineffective if no effort is made to reach out to the potential customers Four dimensions should be considered: reach ,

frequency, content and personalization

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Yasmin

Achieving Strategic Positioning

Operations: day to day functions of an outlet; staffing,
maintenance and general management should be carried out efficiently

Purchasing/ Logistics: image of the store

depends on the kind of merchandise they offer and its availability, therefore as a retailer it becomes important to stock the right merchandise. Logistics decision are important (cross docking)

Market Research: the retailer should have a good

understanding of the customer expectations, needs, wants and behavior. The merchandise in the store should reflect the customers choice and not the retailers interest and assumptions. The changing trends should be tracked and analyzed
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Achieving Strategic Positioning

Financing: importance of financing is often
underestimated by many retailers, due
considerations should be given to return on debt and equity

Technology: for small retailers technology

plays a supporting role but for large retailers it

plays an important role. Technology enables

smoother and hassle-free handling of
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communication and operations

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Building a sustainable competitive advantage

Customer loyalty Location HRM Distribution & information systems Unique merchandise Vendor relations Customer service

Sources of Advantage Customer loyalty Location

Sustainable Advantage Brand image, understanding of the customers Convenient location

Human resource management

Distribution & information systems Unique Merchandise Vendor relations Customer Service

Committed knowledgeable employees

Share system with vendors Exclusive, Coordination of procurement Knowledgeable and helpful salespersons

Multiple sources of Advantage

Do not typically rely on a single approach such as low cost or excellent service Instead have multiple approaches Eg. McDonalds- location, value to customers, good customer service, brand name