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5 Chapter 5 Retail Institutions by Store-Based Strategy Mix RETAIL MANAGEMENT: A STRATEGIC APPROACH, 10th Edition BERMAN EVANS
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5-2 Chapter Objectives To describe the wheel of retailing, scrambled merchandising, and the retail life cycle, and show how they can help explain the performance of retail strategy mixes To discuss some ways in which retail strategy mixes are evolving To examine a variety of food-oriented retailers involved with store-based strategy mixes To study a range of general merchandise firms involved with store-based strategy mixes
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5-3 Retailer Strategy Mix A strategy mix is the firm’s particular combination of: store location, store or nonstore format,place of area and kinder of site is it shopping center operating procedures; kind of personal sale,management style, store hours goods/services offered; categories, quality pricing tactics; prestige,skimming, penetration store atmosphere; physical attributes, customer services; personal attention,return policy,delivery promotional methods; displays, advertising, personal selling and sales promotion
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5-4 Earning Destination Retailer Status Be price-oriented and cost efficient Be upscale Be convenient Offer a dominant assortment Offer superior customer service Be innovative or exclusive
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5-5 Figure 5-1: The Wheel of Retailing
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5-6 Figure 5-2: Retail Strategy Alternatives
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5-7 Figure 5-3: Scrambled Merchandising by a Shoe Store
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5-8 Retail Life Cycle Retail institutions pass through identifiable life stages Sales/Profitability Positioning completion Introduction Low/growing concept innovation None Growth rapid /high Social Need Limited Maturity High level/Declining Broad Maker Extensive/ Saturated Decline Dropping Niche Intensive/ Consolidated
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5-9 How Retail Institutions Are Evolving Mergers, Diversification, Downsizing Cost-Containment and Value-Driven Retailing through: - holding down initial investment -Operating costs Cost commitment could achieved through: Standardized operating procedures,layout and size of store Using secondary location Buying refurbished equipments Using inexpensive construction materials Placing stores in smaller communities
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5-10 Mergers, Diversification, and Downsizing Mergers: combination of separately owned firms (e.g., Movie Gallery and Hollywood Entertainment) Diversification: retailers become active in businesses outside their normal operations (e.g., Limited Brands) Downsizing: unprofitable stores are closed or divisions are sold off (e.g., Kmart)
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5-11 Figure 5-5: west elm from Williams-Sonoma
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5-12 Table 5-1: Store-Based Retail Strategy Mixes Food-Oriented Convenience store Conventional supermarket Food-based superstore Combination store Box (limited-line) store Warehouse store General Merchandise Specialty store Traditional department Full-line discount store Variety store Off-price chain Factory outlet Membership club Flea market
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5-13 Convenience Store Strategy Mix Mini market Location: Neighborhood Merchandise: Medium width and low depth of assortment; average quality Prices: Average to Above average Atmosphere and Services: Average Promotion: Moderate
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5-14 Conventional Supermarket Strategy Mix Self service supermarket Location: Neighborhood Merchandise: Extensive width and depth of assortment; average quality; manufacturer, private, and generic brands Prices: Competitive Atmosphere and Services: Average Promotion: Heavy use of newspapers, flyers, and coupons
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5-15 Food-Based Superstore Strategy Mix Superstore Location: Community shopping center or isolated site Merchandise: Full assortment plus health and beauty aids and general merchandise Prices: Competitive Atmosphere and Services: Average Promotion: Heavy use of newspapers, flyers
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5-16 Figure 5-7: Supermarkets Have Come a Long Way
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5-17 Combination Store Strategy Mix Hypermarket (Carrefour) Location: Community shopping center or isolated site Merchandise: Full assortment plus health and beauty aids and general merchandise Prices: Competitive Atmosphere and Services: Average Promotion: Heavy use of newspapers, flyers
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5-18 Warehouse Store Strategy Mix/groceries Location: Secondary site, often in industrial area Merchandise: Moderate width and low depth of assortment; emphasis on manufacturer brands bought at discount Prices: Very low Atmosphere and Services: Low Promotion: Little or none
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5-19 Specialty Store Strategy Mix Location: Business district or shopping center Merchandise: Very narrow width and extensive depth of assortment; average to good quality Prices: Competitive to Above average Atmosphere and Services: Average to excellent Promotion: Heavy use of displays Extensive sales force
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5-20 Full-Line Discount Store Strategy Mix Location: Business district, shopping center or isolated store Merchandise: Extensive width and depth of assortment; average to good quality Prices: Competitive Atmosphere/Services: Slightly below average to average Promotion: Heavy on newspapers; price-oriented; selling
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5-21 Variety Store Strategy Mix/Apparel and accessories Location: Business district, shopping center or isolated store Merchandise: Good width and some depth of assortment; below-average to average quality Prices: Average Atmosphere/Services: Below average Promotion: Use of newspapers
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5-22 Factory Outlet Strategy Mix Location: Out of the way site or discount mall Merchandise: Moderate width and poor depth of assortment; low continuity Prices: Very Low Atmosphere/Services: Very low Promotion: Little
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5-23 Membership Club Strategy Mix Customers membership Location: Isolated store or secondary site Merchandise: Moderate width and poor depth of assortment; low continuity Prices: Very Low Atmosphere/Services: Very low Promotion: Little; some direct mail
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