Retail Marketing Strategy
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1 Chapter 5 Retail Marketing Strategy PPT McGraw-Hill/Irwin 5-1 Levy/Weitz: Retailing Management, 5/e Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved. Elements in Retail Strategy Target Market Customer Needs Retail Format Method for Satisfying Needs Bases for Building Sustainable Competitive Advantage Defending Position Against Competitors PPT 5-2 Methods for Segmenting Markets Buying Situations Benefits Sought Geographic Lifestyle, Psychographics Demographics PPT 5-3
2 Can A Retailer Develop a Sustainable Competitive Advantage by: Dropping the Price of Your Merchandise? Building a Store at the Best Location? Deciding to Sell Some Hot Merchandise? Increasing Your Level of Advertising? Attracting Better Sales Associates by Paying Higher Wages? Providing Better Customer Service? PPT 5-4 Internal and External Bases for Competitive Advantage Vendors, Suppliers Retail Firm Low Cost Large Size Efficient Distribution, Operations Unique Knowledge Loyal Employees Customers PPT 5-5 Sources of Capital Creating Store Loyalty Mental and Emotional Attachments Elements in a Strong Brand Top of the Mind Awareness Associations with Brand/Store Name Methods Used to Develop a Strong Brand Massive Exposure Symbols to Reinforce Image Consistent Positioning Creating Strong Associations Limited Brand Extensions PPT 5-6
3 Vendor Relationships Low Cost - Efficiency Through Coordination Electronic Data Interchange (EDI) Collaborative Planning and Forecasting to Reduce Inventory and Distribution Costs Exclusive Sale of Desirable Brands Special Treatment Early Delivery of New Styles Shipment of Scare Merchandise PPT 5-7 High Quality Customer Service Difficult to Achieve People Are Not Machines -- Inconsistent Retail Sales Associates At Bottom of Labor Pool Goes Beyond Hiring Good People at High Wages and Training Them -- Organizational Culture PPT 5-8 Growth Opportunities Market Penetration Market Expansion Retail Format Development Diversification - Related vs. Unrelated PPT 5-9
4 st Qtr 2nd Qtr 3r d Qtr 4th Qtr Steps in the Strategic Retail Planning Process 1. Define the business mission 2. Conduct a situation audit: Market attractiveness analysis Competitor analysis Self-analysis 3. Identify strategic opportunities 4. Evaluate strategic alternatives 5. Establish specific objectives and allocate resources 6. Develop a retail mix to implement strategy 7. Evaluate performance and make adjustments PPT 5-10 Elements in a Market Analysis MARKET Size Growth Seasonality Business cycles COMPETITIVE Barriers to entry Bargaining power of vendors Competitive rivalry Threat of superior new formats ENVIRONMENTAL Technology Economic Regulatory Social ANALYSIS OF STRENGTHS & WEAKNESSES Management capabilities Financial resources Locations Operations Merchandise Store Management Customer loyalty PPT 5-11 Questions for Analyzing the Environment New developments or changes -- technologies, regulations, social factors, economic conditions Likelihood changes will occur Key factors determining change Impact of change on retail market firm, competitors PPT 5-12
5 Porter s Five Forces Barriers to Entry Bargaining Power of Vendors Competitive Rivalry Large Customers Threat of Substitution PPT 5-13 Steps in Using Market Attractiveness - Competitive Position Matrix Define strategic opportunities Identify market attractiveness and competitive position factors Assign weight based on importance of factors Rate opportunities on market attractiveness and competitive position Calculate scores and evaluate opportunities PPT 5-14 Evaluation of Retail Market Opportunities in European Community MARKETS Restricted Open High SPAIN ITALY FRANCE GERMANY BELGIUM PORTUGAL GROWTH Low UNITED KINGDOM NETHERLANDS LUXEMBOURG IRELAND GREECE DENMARK PPT 5-15
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