RETAIL INSTITUTIONS BY STORE-BASED STRATEGY MIX

RETAILER STRATEGY MIXA strategy mix is the firms particular combination of:store location, operating procedures, goods/services offered, pricing tactics, store atmosphere, customer services, and promotional methods

WHEEL OF RETAILINGTheory to explain how new retailers or forms of retailing beginRetail 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.

THE WHEEL OF RETAILING

THREE BASIC STRATEGIC POSITIONSLow endMediumHigh end

RETAIL STRATEGY ALTERNATIVES

SCRAMBLE MERCHANDISEScrambled 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 revenuesName the different retailers that have done this ?

SCRAMBLED MERCHANDISING BY A SHOE STOREScrambleMerchandise Original merchandiseShoesSlippersSocksShoe PolishRubber galoshesSandalsSlippersHandbagsShoesUmbrellas hatsglovesSweatersRubber galoshes

Sandals

Shoe Polish

Socks

RETAIL LIFE CYCLERetail institutions pass through identifiable life stagesintroductiongrowthmaturitydecline

RETAIL LIFE CYCLE

HOW RETAIL INSTITUTIONS ARE EVOLVINGMergers, Diversification, DownsizingCost-Containment and Value-Driven Retailing

Merging allows firms to jointly maximize resources, enlarge customer base, improve productivity and bargaining powerDiversifications allows firms to become active in retail firms outside their normal operations or add stores in different goods/service categories.

MERGERS, DIVERSIFICATION, AND DOWNSIZINGMergers: combination of separately owned firms (e.g., Walmart & Bharti)Diversification: retailers become active in businesses outside their normal operations (e.g., Reliance Footprint)Downsizing: unprofitable stores are closed or divisions are sold off (e.g. MORE)

COST CONTAINMENT AND VALUE DRIVEN RETAILINGCost containment is about reducing costs in order to offer lower pricesStrategy is used because of intense competition in the market

METHODS FOR COST CONTAINMENTStandardizing procedures, store layouts, store size, and product offeringsUsing secondary locationsPlacing stores in smaller communities Using inexpensive construction materialsUsing plainer fixtures and displaysBuying renovated equipmentJoining cooperative buying and advertisingCreatively financing inventories

STORE-BASED RETAIL STRATEGY MIXESFood OrientedConvenience storeConventional supermarketFood-based superstoreCombination storeBox (limited-line) storeWarehouse storeGeneral MerchandiseSpecialty storeTraditional departmentFull-line discount storeVariety storeOff-price chainFactory outletMembership clubFlea market

CONVENIENCE STORE STRATEGY MIXLocation:NeighborhoodMerchandise:Medium width and low depth of assortment; average qualityPrices:Average to Above average Atmosphere andServices:AveragePromotion:Moderate

CONVENTIONAL SUPERMARKET STRATEGY MIXLocation:NeighborhoodMerchandise:Extensive width and depth of assortment; average quality; manufacturer, private, and generic brandsPrices:CompetitiveAtmosphere andServices:AveragePromotion:Heavy use of newspapers, flyers, and coupons

FOOD-BASED SUPERSTORE STRATEGY MIXLocation:Community shopping center or isolated siteMerchandise:Full assortment plus healthand beauty aids and general merchandisePrices:CompetitiveAtmosphere andServices:AveragePromotion:Heavy use of newspapers, flyers

COMBINATION STORE STRATEGY MIXLocation:Community shopping centeror isolated siteMerchandise:Full assortment plus healthand beauty aids and general merchandisePrices:CompetitiveAtmosphere andServices:AveragePromotion:Heavy use of newspapers, flyers

BOX STORE STRATEGY MIXLocation:NeighborhoodMerchandise:Low width and depth of assortment; fewperishables; few nationalbrandsPrices:Very lowAtmosphere andServices:LowPromotion:Little or none

WAREHOUSE STORE STRATEGY MIXLocation:Secondary site, often inindustrial areaMerchandise:Moderate width and low depth of assortment; emphasis onmanufacturer brandsbought at discountPrices:Very lowAtmosphere andServices:LowPromotion:Little or none

SPECIALTY STORE STRATEGY MIXLocation:Business district or shopping centerMerchandise:Very narrow width and extensive depth of assortment; average togood qualityPrices:Competitive to Above averageAtmosphere andServices:Average to excellentPromotion:Heavy use of displaysExtensive sales force

TRADITIONAL DEPARTMENT STORE STRATEGY MIXLocation:Business district, shopping center or isolated storeMerchandise:Extensive width and depth of assortment; average togood qualityPrices:Average to Above averageAtmosphere andServices:Good to excellentPromotion:Heavy ad and catalog use; direct mail; personal selling

FULL-LINE DISCOUNT STORE STRATEGY MIXLocation:Business district, shopping center or isolated storeMerchandise:Extensive width and depth of assortment; average togood qualityPrices:CompetitiveAtmosphere/ Services:Slightly below average to averagePromotion:Heavy on newspapers;price-oriented; selling

VARIETY STORE STRATEGY MIXLocation:Business district, shopping center or isolated storeMerchandise:Good width and some depth of assortment; below-average to average qualityPrices:AverageAtmosphere/ Services:Below averagePromotion:Use of newspapers

OFF-PRICE CHAIN STRATEGY MIXLocation:Business district, shopping center or isolated storeMerchandise:Moderate width and poor depth of assortment; average to good quality;low continuityPrices:LowAtmosphere/ Services:Below averagePromotion:Use of newspapers;brands not advertised;limited selling

FACTORY OUTLET STRATEGY MIXLocation:Out of the way site or discount mallMerchandise:Moderate width and poor depth of assortment;low continuityPrices:Very LowAtmosphere/ Services:Very lowPromotion:Little

MEMBERSHIP CLUB STRATEGY MIXLocation:Isolated store or secondary siteMerchandise:Moderate width and poor depth of assortment;low continuityPrices:Very LowAtmosphere/ Services:Very lowPromotion:Little; some direct mail

FLEA MARKET STRATEGY MIXLocation:Isolated store Merchandise:Extensive width and poor depth of assortment;low continuity; variable qualityPrices:Very LowAtmosphere/ Services:Very lowPromotion:Limited

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