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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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Presentation on theme: "5 Chapter 5 Retail Institutions by Store-Based Strategy Mix RETAIL MANAGEMENT: A STRATEGIC APPROACH, 10th Edition BERMAN EVANS."— Presentation transcript:

1 5 Chapter 5 Retail Institutions by Store-Based Strategy Mix RETAIL MANAGEMENT: A STRATEGIC APPROACH, 10th Edition BERMAN EVANS

2 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

3 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

4 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

5 5-5 Figure 5-1: The Wheel of Retailing

6 5-6 Figure 5-2: Retail Strategy Alternatives

7 5-7 Figure 5-3: Scrambled Merchandising by a Shoe Store

8 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

9 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

10 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)

11 5-11 Figure 5-5: west elm from Williams-Sonoma

12 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

13 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

14 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

15 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

16 5-16 Figure 5-7: Supermarkets Have Come a Long Way

17 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

18 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

19 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

20 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

21 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

22 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

23 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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