Presentation is loading. Please wait.

Presentation is loading. Please wait.

5 Chapter 5 Retail Institutions by Store-Based Strategy Mix.

Similar presentations


Presentation on theme: "5 Chapter 5 Retail Institutions by Store-Based Strategy Mix."— Presentation transcript:

1 5 Chapter 5 Retail Institutions by Store-Based Strategy Mix

2 5-2 Chapter Objectives To describe the wheel of retailing, scrambled merchandising, and the retail life cycle, and show how they can help explain the performance of retail strategy mixes To discuss some ways in which retail strategy mixes are evolving

3 5-3 Chapter Objectives_2 To examine a wide variety of food- oriented retailers involved with store- based strategy mixes To study a wide range of general merchandise retailers involved with store-based strategy mixes

4 5-4 Retailer Strategy Mix A strategy mix is the firms particular combination of: store location, operating procedures, goods/services offered, pricing tactics, store atmosphere, customer services, and promotional methods This is a special effort to create the strategy

5 5-5 Earning Destination Retailer Status Be price oriented and cost efficient Be upscale Be convenient Offer a dominant assortment Offer superior customer service Be innovative or exclusive Focus is to strive to be dominant in some way

6 5-6 Wheel of Retailing Theory to explain how new retailers or forms of retailing begin Retail innovators begin as low price operators with low costs and low profit requirements. Overtime, the innovators upgrades to better products and better facilities. They then become vulnerable to new innovators.

7 5-7 Figure 5.1 The Wheel of Retailing Medium Strategy Moderate Prices Improved facilities Broader base of value and service Low end Strategy Low prices Limited facilities High end Strategy High prices Excellent facilities Upscale consumers

8 5-8 Three Basic Strategic Positions Low end Medium High end

9 5-9 Figure 5.2 Retail Strategy Alternatives Low End Strategy Low rental location No services Spartan Fixtures Simple retail personnel organization Price emphasis in promotion Most products visible Self-service High sales per store personnel High End Strategy High rental shopping center Elaborate services Credit,gift wrapping, Elaborate fixtures Elaborate personnel organization No price emphasis Product demonstrations Spacious interior products in back room

10 5-10 Scramble Merchandise Scrambled merchandising occurs when a retailer adds goods and services that may be unrelated to each other and to the firms original business Popular because it allows ways to improve profits and revenues Name the different retailers that have done this ?

11 5-11 Figure 5.3 Scrambled Merchandising by a Shoe Store Scramble Merchandise Original merchandise Shoes Slippers Socks Shoe Polish Rubber galoshes Sandals Slippers Handbags Shoes Umbrellas hats gloves Sweaters Rubber galoshes Sandals Shoe Polish Socks

12 5-12 Retail Life Cycle Retail institutions pass through identifiable life stages introduction growth maturity decline

13 5-13 Figure 5.4 Retail Life Cycle Retail Life Cycle concepts states that retail institutions pass through identifiable life stages: Introduction growth, maturity and decline Intro StageGrowth MaturityDecline Different stores or store formats which fit into these stages now are outline on page 108 in text

14 5-14 How Retail Institutions are Evolving Mergers, Diversification, Downsizing Cost-Containment and Value-Driven Retailing Merging allows firms to jointly maximize resources, enlarge customer base, improve productivity and bargaining power Diversifications allows firms to become active in retail firms outside their normal operations or add stores in different goods/service categories.

15 5-15 Mergers, Diversification, and Downsizing Mergers: combination of separately owned firms (e.g., Sears and Lands End) Diversification: retailers become active in businesses outside their normal operations (e.g., Limited Brands) Downsizing: unprofitable stores are closed or divisions are sold off (e.g., Kmart)

16 5-16 Cost Containment and Value Driven Retailing Cost containment is about reducing costs in order to offer lower prices Strategy is used because of intense competition in the market

17 5-17 Methods for Cost Containment Standardizing procedures, store layouts, store size, and product offerings Using secondary locations Placing stores in smaller communities Using inexpensive construction materials Using plainer fixtures and displays Buying refurbished equipment Joining cooperative buying and advertising Creatively financing inventories

18 5-18 Table 5.1 Store-Based Retail Strategy Mixes Food Oriented Convenience store Conventional supermarket Food-based superstore Combination store Box (limited-line) store Warehouse store General Merchandise Specialty store Traditional department Full-line discount store Variety store Off-price chain Factory outlet Membership club Flea market

19 5-19 Convenience Store Strategy Mix Location: Neighborhood Merchandise: Medium width and low depth of assortment; average quality Prices: Average to Above average Atmosphere and Services: Average Promotion: Moderate

20 5-20 Conventional Supermarket Strategy Mix Location: Neighborhood Merchandise: Extensive width and depth of assortment; average quality; manufacturer, private, and generic brands Prices: Competitive Atmosphere and Services: Average Promotion: Heavy use of newspapers, flyers, and coupons

21 5-21 Food-Based Superstore Strategy Mix Location: Community shopping center or isolated site Merchandise: Full assortment plus health and beauty aids and general merchandise Prices: Competitive Atmosphere and Services: Average Promotion: Heavy use of newspapers, flyers

22 5-22 Combination Store Strategy Mix Location: Community shopping center or isolated site Merchandise: Full assortment plus health and beauty aids and general merchandise Prices: Competitive Atmosphere and Services: Average Promotion: Heavy use of newspapers, flyers

23 5-23 Box Store Strategy Mix Location: Neighborhood Merchandise: Low width and depth of assortment; few perishables; few national brands Prices: Very low Atmosphere and Services: Low Promotion: Little or none

24 5-24 Warehouse Store Strategy Mix Location: Secondary site, often in industrial area Merchandise: Moderate width and low depth of assortment; emphasis on manufacturer brands bought at discount Prices: Very low Atmosphere and Services: Low Promotion: Little or none

25 5-25 Specialty Store Strategy Mix Location: Business district or shopping center Merchandise: Very narrow width and extensive depth of assortment; average to good quality Prices: Competitive to Above average Atmosphere and Services: Average to excellent Promotion: Heavy use of displays Extensive sales force

26 5-26 Traditional Department Store Strategy Mix Location: Business district, shopping center or isolated store Merchandise: Extensive width and depth of assortment; average to good quality Prices: Average to Above average Atmosphere and Services: Good to excellent Promotion: Heavy ad and catalog use; direct mail; personal selling

27 5-27 Full-line Discount Store Strategy Mix Location: Business district, shopping center or isolated store Merchandise: Extensive width and depth of assortment; average to good quality Prices: Competitive Atmosphere/ Services: Slightly below average to average Promotion: Heavy on newspapers; price-oriented; selling

28 5-28 Variety Store Strategy Mix Location: Business district, shopping center or isolated store Merchandise: Good width and some depth of assortment; below-average to average quality Prices: Average Atmosphere/ Services: Below average Promotion: Use of newspapers

29 5-29 Off-Price Chain Strategy Mix Location: Business district, shopping center or isolated store Merchandise: Moderate width and poor depth of assortment; average to good quality; low continuity Prices: Low Atmosphere/ Services: Below average Promotion: Use of newspapers; brands not advertised; limited selling

30 5-30 Factory Outlet Strategy Mix Location: Out of the way site or discount mall Merchandise: Moderate width and poor depth of assortment; low continuity Prices: Very Low Atmosphere/ Services: Very low Promotion: Little

31 5-31 Membership Club Strategy Mix Location: Isolated store or secondary site Merchandise: Moderate width and poor depth of assortment; low continuity Prices: Very Low Atmosphere/ Services: Very low Promotion: Little; some direct mail

32 5-32 Flea Market Strategy Mix Location: Isolated store Merchandise: Extensive width and poor depth of assortment; low continuity; variable quality Prices: Very Low Atmosphere/ Services: Very low Promotion: Limited


Download ppt "5 Chapter 5 Retail Institutions by Store-Based Strategy Mix."

Similar presentations


Ads by Google