Retail market StrategySlide2

Retail Strategy:-

The overall plan or framework of action that guides a retailer

One year in duration

Outlines mission, goals, consumer market, overall and specific activities, and control mechanisms

Definition of a strategy defines its business relative to its competitors

Elements of a Retail Strategy:-

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Mission and Purpose:-

• Highlights ….

– Products and services that will be offered

– Customers who will be served

– Geographic areas of operation

– Manner in which it intends to compete

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Mission Statements:-

• Wal Mart to give ordinary folk the chance to buy the same thing as the rich

• McDonald’s Quality, Service, Convenience and Value

• CCD to be the best café chain in the country by offering world class coffee experience at affordable prices

• Shoppers Stop To be a global retailer in India, and maintain the no.1 position in the Indian market in the departmental store category

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Situation Analysis:-

• PEST Analysis – Political, Economic, Social and Technological

• Here Porters Five Force model can also be used

– Entry barriers

– Suppliers

– Customers

– Substitute Products a

– Industry rivalry

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Dimensions of a retail strategy:-

• Location

• Merchandise

• Price

• Service

• Communications

These dimensions are supported by

• Store operations

• Logistics

• Purchasing

• Market research

• Finance

• Technology

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Dimensions:-

• Location

– Drawing power – natural ability of the store to encourage customers

• Merchandise

– Store as brand represents the merchandise the retailer carries

• Price

– Margin and turnover figs. represent the perception of retailer among customers

• Service

– Services that provide convenience, services that facilitate sales, auxiliary services

• Communication

– Reach, frequency, content and personalization

Benefits of Strategic Retail Planning:-

Provides thorough analysis of the requirements for doing business for different types of retailers

Outlines retailer goals

Allows retailer to determine how to differentiate itself from competitors

Allows retailer to develop an offering that appeals to a group of customers

Helps coordinate and unify the activities of everyone involved

Offers an analysis of the legal, economic, and competitive environment

Provides for the coordination of the firm’s total efforts

Encourages the anticipation and avoidance of crises

Steps in Retail Planning:-

1. Identifying Market opportunities

2. Determining the Market position

3. Developing a formal Marketing Plan

4. Implementing the Plan

Identifying Market opportunities:-

• Gap Analysis

– Identify where the gap lies between customer desires and other retailer offerings

– SWOT Analysis

Determining the Market position:-

• Success is attained if a retailer

– Believes in innovation

– Is aggressive

– Believe in producing quality products and services

– Believe in looking to people to solve problems

– Adaptable to change

This gives a differential advantage …

Developing a formal Marketing Plan:-

• Setting Objectives

– Survival, growth, market share increase, high returns on investment, and development of a good store image

• Mission Statement

• Budgeting

Wills Lifestyle:-

• ITC’s Wills Lifestyle has been established as a vibrant fashion brand for the premium consumer. Wills Lifestyle offers a complete lifestyle wardrobe for the premium consumer, incorporating the latest fashion trends, comprising - Wills Classic work wear, Wills Sport relaxed wear, Wills Clublife evening wear, Essenza di Wills range of fine fragrances, bath & body care products and fashion accessories for both men and women. Specially showcased is a range of high end offerings such as Luxurious shirts & trousers, Formal Jackets, Cashmere and Evening dresses.

A nationwide chain of exclusive specialty stores provides the Indian consumer a truly 'International Shopping Experience' through world-class ambience, customer facilitation and clearly differentiated product presentation. Unique CRM initiatives lay emphasis on a high degree of personalization, and with Club Wills, the loyalty programme that is positioned around fine fashion & fine living, Wills Lifestyle enjoys a strong bonding with its consumers.

Currently there are 40 Wills Lifestyle stores in 30 cities across the country, and the brand is making rapid strides in terms of expansion – doubling the number of stores over the next three years. Wills Lifestyle has received wide recognition within the fashion industry including "Most Admired Exclusive Retail Chain of the Year".

Implementing the Plan:-

• Mr Y C Deveshwar, Chairman, ITC Limited said, "Wills Lifestyle is strongly established as a vibrant fashion brand offering premium consumers, both men and women, a complete lifestyle wardrobe. With this association, I see a uniquely synergistic opportunity for the partners of the Wills Lifestyle India Fashion Week to gain global recognition.

Organizational Mission:-

Retailer’s commitment to a type of business and to a distinctive role in the marketplace.

The Focused Organizational Mission of Frisch’s Restaurants:-

Ownership and Management Alternatives:-

Sole proprietorship is an unincorporated retail firm owned by one person

A partnership is an unincorporated retail firm owned by two or more persons, each with a financial interest

A corporation is a retail firm that is formally incorporated under state law; it is a legal entity apart from its officers

Figure 3.3 Checklist to Consider When Starting a New Business:-

Figure 3.4 Checklist for Purchasing an Existing Retail Business:-

Selected Kinds of Retail Goods and Service Establishments:-

Durable Goods Stores:

Automotive group Furniture and appliances group Lumber, building, and hardware group Jewelry stores

Nondurable Goods Stores:

Apparel group

Food group

General merchandise group

Gasoline service stations

Selected Kinds of Retail Goods and Service Establishments:-

Service Establishments (Personal):

Laundry and dry cleaning Beauty/barber shops Funeral services Health-care services

Service Establishments (Amusement):

Movie theaters

Bowling alleys

Dance halls

Golf courses

Service Establishments (Repair):

Automobile repair Car washes Consumer electronics repair Appliance repairs

Service Establishments (Hotel):

Hotels

Motels

Trailer parks

Camps

Kroger’s Goals:-

Increase its identical food store sales growth target

Reduce operating and administrative costs by more than $500 million

Further leverage its size to achieve even greater economies of scale

Reinvest in its core business to increase sales and market share

Image and Positioning:-

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

Positioning Approaches:-

Mass merchandising is a positioning approach whereby retailers offer a discount or value-oriented image, a wide or deep merchandise selection, and large store facilities

Niche retailing occurs when retailers identify specific customer segments and deploy unique strategies to address the desires of those segments rather than the mass market

Selected Retail Positioning Strategies:-

Target Market Selection:-

• Three techniques

Mass marketing

Concentrated marketing

Differentiated marketing

Strategic Implications of Target Market Techniques:-

Retailer’s location

Goods and service mix

Promotion efforts

Price orientation

Strategy

Developing an Overall Retail Strategy

Legal Environment and Retailing:-

• Store Location

zoning laws

blue laws

environmental laws

direct selling laws

local ordinances

leases and mortgages

• Managing the Business

licensing provisions

personnel laws

antitrust laws

franchise agreements

business taxes

recycling laws

• Merchandise Management and Pricing

trademarks

merchandise restrictions

product liability laws and lemon laws

sales taxes

unit-pricing laws

collusion laws

sale prices

price discrimination laws

• Communicating with the Customer

truth-in-advertising and selling laws

truth-in-credit laws

telemarketing laws

bait-and-switch laws

inventory laws

labeling laws

cooling-off laws

Additional Concerns for Global Retailing:-

In addition to the strategic planning process:

assess your international potential

get expert advice and counseling

select your countries

develop, implement, and review an international retailing strategy

Factors Affecting the Success of a Global Retailing Strategy:-

Timing

A balanced international program

A growing middle class

Matching concept to market

Solo or partnering

Store location and facilities

Product selection

Factors to Consider When Engaging in Global Retailing:-