Elements of Retail Strategy

ELEMENTS OF RETAIL STRATEGY

SITUATION ANALYSIS

Identification of consumers

OverallStrategy

Control

Objective

Specific

Activities

Mission, Ownership & Mgt.Alt, Goods & service category

Sales , Profit , satisfaction of Publics, Image

Mass Mktg. ,Mkt. Segmentation, Multiple segmenttation

Controllable & uncontrollable variables

Daily &short term operationsResponse to Env.

Evaluation , Adjustment

SITUATION ANALYSIS

Evaluation of the opportunities & Potential Problems facing a prospective or existing retailer.It seeks to answer two general questions: What position or status is the firm now? In which direction should it be heading?For a retailer it means defining the Org. Mission ,evaluation of ownership & Mgt. options, and outlining the goods & service category to be sold.

Organization Mission

It reflects the firms attitude to consumers, employees, competitors, Govt. & others.

A firms mission includes a long term commitment to a type of business & a place in the market.

One key decision is whether to base its business around goods & services sold or around customer needs.

Second major decision for a retailer is whether it wants a place in the market as a leader or follower.Third important decision involves a retail firm’s market scope. Although a large chain can seek a broader customer base ( because of its resources & recognition), it is usually best for a small retailer-and most start ups – to focus on a narrow customer base. By concentrating its efforts, a small company can usually compete quite effectively with larger firms.

OWNERSHIP & MGT. ALTERNATIVES

A very essential part of situation analysis is the assessment of ownership and management alternatives.

Sole proprietorship

Partnership

Corporation.

GOODS & SERVICE CATEGORY

Durable Goods store

Nondurable goods store

Automotive Group

Furniture, Appliances.

Jewelry , Hardware etc.

Apparel GroupFood Group

General merchandise groupEating & Drinking place

Petrol pumpDrug store

Liquor store.

SERVICE CATEGORY

Personal services

Amusement services

Repair services

Hotel services

Laundries & Dry-cleaningBeauty/Barber shopsPhotographic studies

Funeral servicesHealth-care services.

Movie theatresDance hallsGolf course

Skating rinksAmusement parks

Coin-operated game arcades

Automobile repairsCar washes

Consumer electronic repairsAppliance repairs

Watch & jewelry repairs

HotelsMotelsCamps.

OBJECTIVES

Sales objectives : Volumes

Profit

Satisfaction of Publics (stack holders, consumers, suppliers, employees and Govt.).

Image (Positioning)

IDENTIFICATION OF CONSUMER

The customer group that a retailer seeks to attract and satisfy is called the target market.

Mass Mkt.

Market segment

Multiple segment.

OVERALL STRATEGY

Controllable variables:Store location

Managing a businessMerchandise Mgt. & Pricing

Communication with customer

Retail

Strategy

Uncontrollable Variables:

Consumers

Competition

Technology

Economic conditions

Seasonality

Legal restrictions.

Choosing a store location

Competitors

Transportation access

Population density

Type of neighborhood

Nearness to suppliers

Pedestrian traffic and

Store composition.

Managing a business

Involves two major elements:

The Retail Organization & The HR Mgt.

Operations Mgt.: efficiently & effectively performing the task.

Tasks, Policies, resources, authority, responsibility and rewards are outlined via a retail organization structure.

Merchandising Mgt. & Pricing

The General qty. of the goods and/ or services offered must be determined.

Decisions about width & depth of assortment.

Decision about level of inventories.

PRICING :Leader/ follower, cost plus/ demand oriented etc.

Strategy

To attain and maintain a long run success , a retail firm’s strategy must anticipate and plan for the changing env. In particular , the firm should carefully identify the opportunities & threats that are evolving.SWOT.Strategic Planning in retailing: Trends in the consumer demographic , consumer lifestyles, ethics & social responsibility, technology, retail institutions and the international dimensions of retailing are discussed.

Demographics

Population Size & Age Distribution

No. of Households

Population Mobility

Location of Mobility

Working Women

Income

Life style trends

Gender Roles

Consumerism

Technology

E-Banking

Video Ordering system

Retail Strategies

Defining the business of the firm.Setting short term & long term objectivesIdentifying the target MktDeciding the broad directionImplementing an integrated plan that encompasses all aspects of retailing like pricing, location, and channel decision.Evaluating and revising the plan depending on the nature of the internal & external env.