1. RETAILING AND MARKETING
Marketing in Retailing Organizations
Charles Blankson, Ph.D.

2. 2. Learning Objectives Define retailing and marketing
Explain the meaning and concept of marketing and its practices in retail organisations
Review the concept of marketing for retailers
Review the elements of retail management mix. 2.

3. Definition of Retailing
The term ‘retailing’ is derived from the old French word ‘retailler’, meaning ‘a piece of’ or ‘to cut up’.
Retail is:
“any business that directs its marketing efforts towards satisfying the final consumer based upon the organisation of selling goods and services as a means of distribution”. 3.

4. Growing Importance of Retail Sector
Large and increasing contribution to GDP
Economic importance more visible
Major employer
Retailers as gatekeepers
Retailers diversifying their activities
Organisations growing on an international scale
Blurring of areas of retail to include wider areas of business activity
Size of operation allowing for supply chain control. 4.

5. Structural trends in European retailing
Increase dominance of retailers over suppliers
Increasing market share held by multiples and associated loss by independents and co-operatives.
Increasing rates market concentration
Technical superiority of the big players providing cost-effectiveness
Note:
All of the trends occur to differing extents throughout Europe. 5.

6. Marketing in Retail Organization
Definition of Marketing
The Chartered Institute of Marketing (CIM) defines marketing as:
“the management process responsible for identifying, anticipating and satisfying customer requirements profitably”.
Marketing philosophy is the acceptance of customer as king. 6

7. Definition continues….
Marketing is therefore:
A management function
It organises and directs
It has a function of assessing
It has a function of conversion
It deals with consumer purchasing power
It deals with consumers or users
It deals with moving the goods to the final consumer
It achieves the profit target or other objectives. 7

8. Marketing Functions Obtaining demand via: Price and pricing
Advertising
Personal selling
Sales promotion
Product planning
Customer segmentation
Merchandise display
Store location 8

9. Marketing functions Servicing demand through: Transportation Logistics
Warehousing
Customer service
Inventory control
Order processing
Merchandise handling
Credit control 9

10. Other functional activities
Other functional activities cover broad areas including:
General administration and management
Public relations and inter-organisation communications
Retail financing
Retail marketing research
Retail technology
Retail information technology system
International operations or cross-boarder retailing
Retail innovation.
10.

11. Marketing management mix
The marketing management mix covers the key dimensions of:
Product (brand name)
Personal selling
Price and pricing
Services including customer service
Perceived image
Location
Sales incentives
Integrated communications
Store ambience and atmospherics.
11.

12. Marketing Practices in Retailing
Activities at strategy level:
Environmental search
Strategy development
Building strong organisation
Implement retail strategy
Counter competitive threats
Forecast future market trends
12.

13. Marketing practices in Retailing
Activities at operational level:
Collect information
Make operational decisions
Implement operational strategy
Manage store operations
Manage human resource
Manage store-level resources
13.

14. Retail marketing mix Store location Merchandising Store ambience
Customer service
Retail pricing
Retail integrated communications
Personal selling
Store image
Sales incentives 14

15. Role of competition in retailing
Retailing is more competitive than most other sectors
Retail competition is multidimensional i.e., 5 levels
1st level – product, services, communication, and physical distribution.
2nd level – related to retail organization and its horizontal competitors.
3rd level – other retail organization and the vertical competition.
4th level – deals with geographical dimensions including location and shopping environment.
5th level – nature of the marketplace.
15.

16. Dimensions of Change in retail competition
Retail competition has been changing along spatial, institutional and functional dimensions.
Spatial dimension – retailing follows population trends.
Institutional dimension – both large and small firms are engaged in retail competition.
Functional dimension – takes two dimensions e.g. price competition; and non-price competition.
16.

17. Retail concentration
High concentration of retail competition could be attributed to ease of entry.
High profit in retailing invites competition and resulting in high concentration.
Large firms taking over smaller firms leads to polarisation and concentration.
Government policies and regulations favoring large firms and less favourable to smaller firms lead to concentration.
Consumers willingness to accept process foods and innovative products helped build retail concentration.
17.

18. Competitive advantage (differentiation)
Retailers need to differentiate themselves from their competitors
Competitive advantage is achieved through differential congruence.
Differential congruence is the positive balance between store’s image and the customer’s self-image.
Successful retailers must achieve differential congruence as a means of coping with growing competition.
Retail management must create a congruence between the store’s perceived image and the customer’s self-image to achieve differential advantage.
18.

19. Monopolistic competition
Monopolistic competition is where each retailer has certain unique features, e.g. in terms of merchandise mix, its location etc.
The unique features give retailers competitive advantage over their competitors.
The ability to use the opportunity to create competitive advantage is indicative of good retail marketing management.
Retailers need to establish a degree of monopoly power in order achieve competitive edge or to survive in a fast changing retail market.
19.

20. Conditions for monopolistic competition
The conditions that monopolistic competition imposes on retail organisation include:
Relative ease of entry
Relative ease of exit
A less than perfectly elastic demand function
Less than perfect information for individual firm
Consumer behaviour is less than being entirely rational
The possibility of acquiring additional information. 20

21. Seminar (Group Work)
“It is the effective blending of all the retail marketing mix activities within the retail organization that determines the success of retail marketing management”.
Task
In your group, prepare in summary form for class presentation how these retail marketing mix activities could be blended for effective retail marketing management.
You may use PowerPoint presentation style.
21.

22. Key Text Reading
Omar, O. (1999), Retail Marketing, London: Financial Times / Pitman. Ch.1.
Kent, T. and Omar, O. (2003), Retailing, Basingstoke: Palgrave, Ch. 1 and 2.