RETAIL LIFE CYCLE

RETAIL LIFE CYCLE

Prepared By:

Megha Miglani

Neha Khurana

PGDM(Sem-II)

CONTENTS

1.What is Retail Life Cycle???2.Innovation3.Accelerated Growth4.Maturity5.Decline

What Is Retail Life Cycle???

A theory of retail competition states that retailing institutions, like the products they distribute, pass through an identifiable cycle. This cycle can be partitioned into four distinct stages: (1) innovation, (2) accelerated development, (3) maturity, and (4) decline .

INNOVATION FEATURES:- Few competitors Rate of growth is fairly rapid Management sets its strategy through experimentation Profitability is moderate Lasts upto 5yrs

A rapid penetration strategy is suggested at this stage i.e. low price and high promotion.

Strategies For Merchandise MixPlace Location is fixed. Distribution is selective until consumers show acceptance of the product.

Promotion Aimed at innovators and early adopters.Marketing communications seeks to build product awareness and to educate the potential customers about the product.

CONTD……

PricePenetration strategy or Skimming strategy.

ProductInnovative Product.Different from other products.First in the market.

ACCELERATED GROWTH FEATURES:- Rapid increase in sales volume and profits Few competitors emerge Investment level is high Lasts upto 5-8 yrs Cost Pressures tend to appear

The strategy of adopting quality and styled products with new models and shift of advertising from product awareness to product preference. 

Strategies For Merchandise Mix

PlaceBusiness actively engaged in geographic expansion.

PromotionPromotion is aimed at a broader audience. Heavy advertisement to stimulate growth.

CONTD…..

ProductProduct quality is maintained and additional features and support services may be added.

PricePricing is maintained as the firm enjoy increasing demand with little competition.

MATURITY Growth rate tends to decrease.  Competition increases. Profits start declining. Time to rethink strategies. Repositioning of organization in the market.

Strategies for merchandise mix Product differentiation may be done. Prices are maintained with respect to

prevailing market prices. Intensive distribution. Widespread promotion through use of variety

of media.

DECLINE Competitive edge is lost. High overheads. Negative growth rate. Profitability declines further.

Strategies for merchandise mix More innovative products are introduced. There is intense price-cutting. Selective distribution. Profits can be improved by reducing

promotional costs-selective promotion.