1-1 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall The Philosophy Retailers can best address these questions by fully understanding and applying the basic principles of retailing, as well as the elements in a well-structured, systematic, and focused retail strategy.

1-2 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Figure 1-10: Applying the Retailing Concept Customer Orientation Coordinated Effort Value-driven Goal Orientation Retailing Concept Retail Strategy

1-3 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Retail Strategy  An overall plan for guiding a retail firm  Influences the firm’s business activities  Influences firm’s response to market forces

1-4 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Figure 1-8: Special Characteristics Affecting Retailers Impulse Purchase Popularity of Stores Retailer’s Strategy Small Average Sale

1-5 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Parts of Retail Management: A Strategic Approach  Building relationships and strategic planning  Retailing institutions  Consumer behavior and information gathering  Elements of retailing strategy  Integrating, analyzing, and improving retail strategy

1-6 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Six Steps in Strategic Planning 1. Define the type of business 2. Set long-run and short-run objectives 3. Determine the customer market 4. Devise an overall, long-run plan 5. Implement an integrated strategy 6. Evaluate and correct

1-7 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall “Expect More. Pay Less” at Target

1-8 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall “?” at Kipa

1-9 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Aspects of Target’s Strategy  Growth objectives  Appeal to a prime market  Distinctive image  Focus  Customer service  Multiple points of contact  Employee relations  Innovation  Commitment to technology  Community involvement  Monitoring performance

1-10 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Aspects of Kipa’s Strategy?  __________________

Building and Sustaining Relationships in Retailing BERMAN EVANS 11 RETAIL MANAGEMENT: A STRATEGIC APPROACH 11th Edition BERMAN EVANS

What is Value?  The bottom line:  Consumers will demand “more for less” from the shopping experience  They will spend less time shopping  They will split the commodity-shopping trip from the value-added shopping trip 12

What is Value? (cont.) Channel Perspective  Value is a series of activities and processes (the “value chain”) that provide a certain value for the consumer. Customer Perspective  Value is a perception that the shopper has of the value chain.  It is the view of all the benefits from a purchase versus the price paid. 13

Retail Value Chain  Represents the total bundle of benefits offered to consumers through a channel of distribution  Store location and parking, retailer ambience, customer service, brands/products carried, product quality, retailer’s in-stock position, shipping, prices, image, and other elements 14

Potential Pitfalls to Avoid in Planning a Value- Oriented Retail Strategy Planning value solely from a price perspective Providing value-enhanced services that customers do not want or will not pay extra for Competing in the wrong value/price segment Believing augmented elements alone create value 15

Best Buy Geek Squad 16

Customer Service Expected customer Expected customer service is the service level that customers want to receive from any retailer such as basic employee courtesy. Augmented customer Augmented customer service includes the activities that enhance the shopping experience and give retailers a competitive advantage. 17

Classifying Customer Services 18

Starbucks: Name on Coffee 19

Typical Customer Services  Credit  Delivery  Alterations/ Installations  Packaging/gift wrapping  Complaints/Return handling  Gift certificates  Trial purchases  Special sales  Extended store hours  Mail/phone orders  ? 20

Miscellaneous Customer Services  Interior designers  Personal shoppers  Ticket outlets  Parking  Water fountains  Payphones  Baby strollers  Restrooms  Restaurants  Babysitting  Fitting rooms  Beauty salons  Fur storage  Shopping bags  Information 21

Elements Contributing to Effective Channel Relationships 22

Four Characteristics of Services Retailing  Intangibility  Inseparability  Perishability  Variability 23

2-Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Characteristics of Service Retailing Intangibility No patent protection possible Difficult to display/communicate service benefits Service prices difficult to set Quality judgment is subjective Some services involve performances/experiences 24

2-Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Characteristics of Service Retailing Inseparability Consumer may be involved in service production Centralized mass production difficult Consumer loyalty may rest with employees 25

2-Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Characteristics of Service Retailing Perishability Services cannot be inventoried Effects of seasonality can be severe Planning employee schedules can be complex 26

2-Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Characteristics of Service Retailing Variability Standardization and quality control hard to achieve Services may be delivered in locations beyond control of management Customers may perceive variability even when it does not actually occur 27

Consumer Perceptions of Service Retailing 28