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Retail Institutions by Store-Based Strategy Mix Chapter 5.

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

1 Retail Institutions by Store-Based Strategy Mix Chapter 5

2 Discuss Retail Strategy Evolution
Objectives Describe Wheel of Retailing Scrambled Merchandising Retail Life Cycle Discuss Retail Strategy Evolution Examine Store-Based Retail Strategies Food-Oriented General Merchandise

3 Strategy Mix Location Operating Procedures Goods/Services Offered Pricing Tactics Atmospherics Customer Services Promotional Methods

4 Establishing Destination Retailer Status
Be Price-Oriented and Cost-Efficient Be Upscale Be Convenient Offer Dominant Assortment Offer Superior Customer Service Be Innovative or Exclusive Provide A Unique Way of Operating

5 Wheel of Retailing Medium Strategy Moderate Prices Improved Facilities
Broader Base of Value- and Service- Conscious Consumers High-Ended Strategy High Prices Excellent Facilities and Services Upscale Customers Low-End Strategy Low Prices Limited Facilities and Services Price Sensitive Consumers

6 Retail Strategy Alternatives
Low-Ended Strategy High-Ended Strategy Low Rental location -- Side Street High Rental Shopping Center or Central Business District Location No Services or Services Charged at Additional Fee (or Services May Be Limited to Credit and Returns Elaborate Services Available Included in Price, Such As: Credit Decorating Delivery Gift Wrapping Alterations Layaway Spartan Fixtures and Displays Elaborate Fixtures and Displays Simple Retail Personnel Organization Elaborate Retail Personnel Organization Price Emphasis in Promotion No Price Emphasis in Promotion Self-Service or High Sales per Store Personnel Ratio Product Demonstrations, Low Sales Per Store Personnel Ratio Crowded Store Interior Spacious Store Interior Most Merchandise Visible Most Merchandise in Backroom

7 Merchandising Sandals Shoe Polish Original Merchandise Mix Slippers

8 Scrambled Merchandising
Socks Sandals Shoe Polish Belts Scrambled Merchandise Mix Handbags Slippers Shoes Gloves

9 Retail Life Cycle Maturity Decline Accelerated Development Innovation

10 Retail Life Cycle Number of Competitors Maturity Innovation Decline
Accelerated Development Very Few Moderate Many Direct Moderate Direct Moderate Indirect Many Indirect Very Few

11 Retail Life Cycle Growth/Profitability/Duration L Maturity Innovation
Decline Accelerated Development Very Rapid Rapid Moderate to Slow Slow or Negative Low to Moderate High Moderate Very Low 3-5 Years Years Indefinite Indefinite Very Few

12 Retail Life Cycle Investment/Growth/Risk Decisions L Maturity
Innovation Decline Accelerated Development Investment Min Investment High Tightly Controlled Growth Marginal Capital High Risk to Sustain in Untapped Markets Expenditures, & Accepted Growth Only if Necessary Very Few

13 Retail Life Cycle Central Management Concerns L Maturity Innovation
Decline Accelerated Development Concept Refinement Establishing a Excess Capacity & Engaging in a Through Adjustment Preemptive Overstoring; Prolonging Run-Out & Experimenting Market Position Maturity & Revising the Strategy Business Concept Very Few

14 Retail Life Cycle Use of Management Control Techniques Maturity
Innovation Decline Accelerated Development Minimal Moderate Extensive Moderate Very Few

15 Retail Life Cycle Most Successful Management Style Maturity Innovation
Decline Accelerated Development Entrepreneurial Centralized Professional Caretaker Very Few

16 Institution Evolution
Mergers Diversification Downsizing Cost Containment Value-Driven Retailing

17 Food-Oriented Retailers
Convenience Store Conventional Supermarket Food-Based Superstore Combination Store Supercenter Hypermart Box (Limited-Line) Store Warehouse Store

18 Food-Oriented Retailers

19 General Merchandise Retailers
Specialty Category Killer Traditional Department Store Full-Line Discount Store Variety Store Off-Price Chain Factory Outlet Membership Club Flea Market

20 What You Should Know How the Wheel of Retailing, Scrambled Merchandising, and Retail Life Cycle Help Explain Performance The Evolution of Retail Strategy Mix The Nature of Store-Based Retailers Food-Oriented General Merchandise

21 Questions?

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