Chapter 3Strategic Planning in RetailingRETAIL MANAGEMENT:A STRATEGICAPPROACH, 9th EditionBERMAN EVANS

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Chapter ObjectivesTo show the value of strategic planning for all types of retailersTo explain the steps in strategic planning for retailers: situation analysis, objectives, identification of consumers, overall strategy, specific activities, control, and feedback

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Chapter Objectives_2To examine the individual controllable and uncontrollable elements of a retail strategyTo present strategic planning as a series of integrated steps

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Retail StrategyThe overall plan or framework of action that guides a retailerOne year in durationOutlines mission, goals, consumer market, overall and specific activities, and control mechanisms

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Figure 3.1 Elements of a Retail Strategy

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Benefits of Strategic Retail PlanningProvides thorough analysis of the requirements for doing business for different types of retailersOutlines retailer goalsAllows retailer to determine how to differentiate itself from competitorsAllows retailer to develop an offering that appeals to a group of customers

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Benefits of Strategic Retail Planning_2Offers an analysis of the legal, economic, and competitive environmentProvides for the coordination of the firms total effortsEncourages the anticipation and avoidance of crises

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Organizational Mission

Retailers commitment to a type of businessand to a distinctive role in the marketplace.

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Figure 3.2 The Focused Organizational Mission of Frischs Restaurants

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Ownership and Management AlternativesSole proprietorship is an unincorporated retail firm owned by one personA partnership is an unincorporated retail firm owned by two or more persons, each with a financial interestA corporation is a retail firm that is formally incorporated under state law; it is a legal entity apart from its officers

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Figure 3.3 Checklist to Consider When Starting a New Business

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Figure 3.4 Checklist for Purchasing an Existing Retail Business

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Figure 3.5 Selected Kinds of Retail Goods and Service EstablishmentsDurable Goods Stores:Automotive groupFurniture and appliances groupLumber, building, and hardware groupJewelry storesNondurable Goods Stores:Apparel groupFood groupGeneral merchandise groupGasoline service stations

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Figure 3.5 Selected Kinds of Retail Goods and Service EstablishmentsService Establishments (Personal):Laundry and dry cleaningBeauty/barber shopsFuneral servicesHealth-care servicesService Establishments (Amusement):Movie theatersBowling alleysDance hallsGolf courses

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Figure 3.5 Selected Kinds of Retail Goods and Service EstablishmentsService Establishments (Repair):Automobile repairCar washesConsumer electronics repairAppliance repairsService Establishments (Hotel):HotelsMotelsTrailer parksCamps

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Krogers GoalsIncrease its identical food store sales growth targetReduce operating and administrative costs by more than $500 millionFurther leverage its size to achieve even greater economies of scaleReinvest in its core business to increase sales and market share

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Image and Positioning

An image represents how a given retailer is perceivedby consumers and others.

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Positioning ApproachesMass merchandising is a positioning approach whereby retailers offer a discount or value-oriented image, a wide or deep merchandise selection, and large store facilitiesNiche retailing occurs when retailers identify specific customer segments and deploy unique strategies to address the desires of those segments rather than the mass market

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Figure 3.6 Niche Retailing by American Outpost

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Figure 3.7 Selected Retail Positioning Strategies

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Target Market SelectionThree techniques

Mass marketingConcentrated marketingDifferentiated marketing

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Figure 3.8 Albertsons: Keeping a Competitive Edge

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Strategic Implications of Target Market TechniquesRetailers locationGoods and service mixPromotion effortsPrice orientationStrategy

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Figure 3.9 Developing an Overall Retail StrategyControllable Variables:Store locationManaging businessMerchandise

management and pricingCommunicating

with customerUncontrollable Variables:ConsumersCompetitionTechnologyEconomic

conditionsSeasonalityLegal restrictions

RetailStrategy

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Figure 3.10 The Sheraton Safari Hotel

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Table 3.4a Legal Environment and Retailing Store Location

zoning lawsblue lawsenvironmental lawsdirect selling lawslocal ordinancesleases and mortgagesManaging the Business

licensing provisionspersonnel lawsantitrust lawsfranchise agreementsbusiness taxesrecycling laws

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Table 3.4b Legal Environment and Retailing Merchandise Management and Pricing

trademarksmerchandise restrictionsproduct liability laws and lemon lawssales taxesunit-pricing lawscollusion lawssale pricesprice discrimination laws

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Table 3.4c Legal Environment and Retailing Communicating with the Customer

truth-in-advertising and selling lawstruth-in-credit lawstelemarketing lawsbait-and-switch lawsinventory lawslabeling lawscooling-off laws

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Additional Concerns for Global RetailingIn addition to the strategic planning process:assess your international potentialget expert advice and counselingselect your countriesdevelop, implement, and review an international retailing strategy

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Factors Affecting the Success of a Global Retailing StrategyTimingA balanced international programA growing middle classMatching concept to marketSolo or partneringStore location and facilitiesProduct selection

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Figure A3.1 Factors to Consider When Engaging in Global Retailing