1. Retail Institutions by Store-Based Strategy Mix
Chapter 5
Retail Institutions by Store-Based Strategy Mix
RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH
11th Edition
BERMAN EVANS
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 1

2. Retailer Strategy Mix
A strategy mix is the firm’s particular combination of:
store location
operating procedures
goods/services offered
pricing tactics
store atmosphere
customer services
promotional methods 2
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

3. Earning Destination Retailer Status
Must be price-oriented and cost efficient
Must be upscale
Must be convenient
Should offer a dominant assortment
Should offer superior customer service
Must be innovative or exclusive 3
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

4. Figure 5-1: The Wheel of Retailing4
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

5. Figure 5-2: Retail Strategy Alternatives
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

6. Figure 5-3: Scrambled Merchandising by a Shoe Store6
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

7. Retail Life Cycle
Retail institutions pass through identifiable life stages
introduction
growth
maturity
decline 7
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

8. Figure 5-4: The Retail Life Cycle8

9. How Retail Institutions Are Evolving
Mergers, diversification, and downsizing
Cost-containment and value-driven retailing 9
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10. Mergers, Diversification, and Downsizing
Mergers: combinations of separately owned firms (e.g., Bank of America and Commerce Bank)
Diversification: retailers become active in businesses outside their normal operations (e.g., Yum! Brands)
Downsizing: unprofitable stores are closed or divisions are sold off (e.g., Kmart) 10
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

11. Figure 5-5: West Elm from Williams-Sonoma11
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

12. Methods for Cost Containment
Standardizing procedures, store layouts, store size, and product offerings
Using secondary locations
Placing stores in smaller communities
Using inexpensive construction materials
Using plainer fixtures and displays
Buying refurbished equipment
Joining cooperative buying and advertising
Creatively financing inventories 12
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

13. Table 5-1: Store-Based Retail Strategy Mixes
General Merchandise
Specialty store
Traditional department
Full-line discount store
Variety store
Off-price chain
Factory outlet
Membership club
Flea market
Food-Oriented
Convenience store
Conventional supermarket
Food-based superstore
Combination store
Box (limited-line) store
Warehouse store 13

14. Convenience Store Strategy Mix
Location:
Neighborhood
Prices:
Average to
Above average
Atmosphere and
Services:
Average
Merchandise:
Medium width
and low depth
of assortment;
average quality
Promotion:
Moderate 14

15. Conventional Supermarket Strategy Mix
Location:
Neighborhood
Prices:
Competitive
Atmosphere and
Services:
Average
Merchandise:
Extensive width
and depth
of assortment;
average quality;
manufacturer,
private, & generic brands
Promotion:
Heavy use of
newspapers, flyers,
and coupons 15

16. Food-Based Superstore Strategy Mix
Location:
Community shopping
center or isolated site
Prices:
Competitive
Atmosphere and
Services:
Average
Merchandise:
Full assortment plus
health and beauty aids
and general
merchandise
Promotion:
Heavy use of
newspapers, flyers 16

17. Figure 5-7: Supermarkets Have Come a Long Way17
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

18. Combination Store Strategy Mix
Location:
Community shopping center
or isolated site
Prices:
Competitive
Atmosphere and
Services:
Average
Merchandise:
Full assortment plus
health and beauty aids
and general merchandise
Promotion:
Heavy use of
newspapers, flyers 18

19. perishables; few national
Box Store Strategy Mix
Location:
Neighborhood
Prices:
Very low
Atmosphere and
Services:
Low
Merchandise:
Low width and depth of
assortment; few
perishables; few national
brands
Promotion:
Little or none 19

20. Warehouse Store Strategy Mix
Location:
Secondary site, often in
industrial area
Prices:
Very low
Atmosphere and
Services:
Low
Merchandise:
Moderate width and
low depth of
assortment; emphasis on
manufacturer brands
bought at discount
Promotion:
Little or none 20

21. Specialty Store Strategy Mix
Location:
Business district or
shopping center
Prices:
Competitive to
Above average
Atmosphere and
Services:
Average to excellent
Merchandise:
Very narrow width and
extensive depth of
assortment; average to
good quality
Promotion:
Heavy use of displays
Extensive sales force 21

22. Figure 5-8: Old Navy – A Discount Power22
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

23. Traditional Department Store Strategy Mix
Location:
Business district, shopping
center or isolated store
Prices:
Average to
Above average
Atmosphere and
Services:
Good to excellent
Merchandise:
Extensive width and
depth of
assortment; average to
good quality
Promotion:
Heavy ad and catalog
use; direct mail;
personal selling 23

24. Full-Line Discount Store Strategy Mix
Location:
Business district, shopping
center or isolated store
Prices:
Competitive
Atmosphere/Services:
Slightly below
average to average
Merchandise:
Extensive width and
depth of
assortment; average to
good quality
Promotion:
Heavy on newspapers;
price-oriented; selling 24

25. Variety Store Strategy Mix
Location:
Business district, shopping
center or isolated store
Prices:
Average
Atmosphere/Services:
Below average
Merchandise:
Good width and
some depth of
assortment;
below-average
to average quality
Promotion:
Use of newspapers 25

26. Off-Price Chain Strategy Mix
Location:
Business district, shopping
center or isolated store
Prices:
Low
Atmosphere/Services:
Below average
Merchandise:
Moderate width and
poor depth of
assortment;
average to good quality;
low continuity
Promotion:
Use of newspapers;
brands not advertised;
limited selling 26

27. Factory Outlet Strategy Mix
Location:
Out of the way site
or discount mall
Prices:
Very Low
Atmosphere/Services:
Very low
Merchandise:
Moderate width and
poor depth of
assortment;
low continuity
Promotion:
Little 27

28. Membership Club Strategy Mix
Location:
Isolated store or
secondary site
Prices:
Very Low
Merchandise:
Moderate width and
poor depth of
assortment;
low continuity
Atmosphere/Services:
Very low
Promotion:
Little;
some direct mail 28

29. Flea Market Strategy Mix
Location:
Isolated store
Prices:
Very Low
Merchandise:
Extensive width and
poor depth of
assortment;
low continuity;
variable quality
Atmosphere/Services:
Very low
Promotion:
Limited 29