2. Book 3
Retail Marketing

3. Session 2: Retail marketing planning
What is retail marketing planning?
Business mission
Marketing audit
SWOT analysis
Marketing objectives
Core strategy
Competitive advantage

4. What is retail marketing planning?
Marketing is more than advertising, promotions & sales people
Marketing is understanding how to create customer value & then planning to achieve market-focused goals
Retailers need customers to return & make repeat purchases: goal of marketing is long-term satisfaction not short-term deception'

5. To succeed, retailer must understand that marketing orientation influence all aspect of organization
Operations support creation of customer satisfaction
Staff must recognize importance of customer satisfaction & take responsibility to create it
Goals are achieved thru customer satisfaction.
Marketing includes whole of retail operation from P for sale to complaints, buying function, logistics department & etc.

6. Marketing orientation vs. Production orientation
Marketing-orientated
Production-orientated
Companies focus on production methods before customer
Is cost focused
Aim for economies of scale with limited range of products to minimize production costs.
Aggressive sales effort to sell regardless buyer benefits
Companies close to customers
Understand needs & problems: market driven.
Organization focus on strategies to maximize customer benefits
Identifying potential market opportunities, & developing P&S to satisfy customer needs.

7. The development of retail marketing
Recently, major retailers are dominating marketing channels , manufacturers & wholesalers.
Cause retailers have taken control of marketing mix
In the past, retailing had taking a passive role in distribution : G passed from manufacturer to consumer through retailer
Now retailer is involved throughout supply chain
Adopts a market-centred view
Develop market share through better understanding of customer & tailoring business to satisfy needs

8. The development of retail marketing
1970s: Shift in the balance of power from manufacturer to supplier & then retailer, when there was a major shift in channel power.
1950s: the 'manufacturer was king'.
1960s: Consumer spending was on increase, as was competition. Thus, shift towards consumer, so in this era customer was king.
1970s: trade became more concentrated & powerful retailers took over the marketing functions so in this era 'trade was king'

9. Retailers developed power in supply chain through:
Abolition(ending) of resale price maintenance (RPM) & development of strong retailer brands
Concentration of retail trading - leading brands dominating various sectors
Terms of trade, i.e. large retailers force power by greater purchasing power over smaller retailers
Access to information
Shift in balance of power between retailers & manufacturers thus dependence on multiple retailers

10. Even with power over marketing mix many fail
Lacking organization & coordination
Thus, importance of Strategic marketing
Retailers had a marketing department
Sophisticated marketing solutions dealing with complex & demanding marketing environment
D for managerial skills & competencies has created retailing professionals adept at market analysis, strategic thinking & planning
Shift towards marketing orientation
Customers is important & needs at heart of planning

11. The retail marketing planning process
Six questions for planning process:
Where are we now?
How did we get here?
Where are we heading?
Where would we like to be?
How do we get there?
Are we on course?
By answering each of these questions, a business can develop a marketing plan.

12. Figure 2.1 The stages in the marketing planning process

13. This approach to marketing planning shows:
This model is useful as it provides a clearly defined path from the vision of what a business might be to the actual implementation.
But, retailers rarely follow such well-ordered stages.
This approach to marketing planning shows:
A systematic way of getting to know about each of the elements of the planning process
How individual elements of the planning process are integrated.

14. Business mission
Business should have mission statement guiding its activities.
Mission statement is enduring & served to distinguish business from its competitors.
It sets out business retailers are in & reason for its existence
Business mission focus for developing other stages
Guiding mission has to be operationalized for business success & that by understanding trading environment.
Thus, conducting a marketing audit let you capture how those forces might be affecting a retail business.

15. Marketing audit
It provides a framework for a systematic examination of a business's marketing environment
Therefore, development of marketing plan
Audit helps to identify key problem areas & answer the 1st three of key planning questions:
Where are we now? How did we get here? Where are we heading?

16. Identifying elements of micro- & macro-environement helps to provide us with a checklist retailer might consider when conducting a marketing audit.
External audit focuses on forces in environment affecting business performance,
whilst internal audit focuses on business's activities.
Internal marketing audit checklist focusing on company performance: market mix effectiveness; strategic performance; marketing structures, marketing systems

17. It is an ongoing activity used to support business planning & decision making.
Audit should enable a company to evaluate its current position.
The next stage: where company is heading & where it would like to be heading.
This can be achieved by identifying + & - affecting future successes

18. SWOT analysis
Marketing audit is a process of constant information gathering & analysis.
These information need to be summarized to inform development of a marketing plan.
To achieve this : SWOT analysis.
SWOT: Strengths, Weaknesses, Opportunities & Threats
Used to analyze output of marketing audit
SWOT analysis provides a straightforward

19. Example of SWOT analysis
Strengths
Opportunities
Excellent customer service
Loyal customer
Clear focus on specialist niche market
weaknesses
P are of good quality but designs are a bit dated
Lack of marketing expertise
lack of knowledge of web marketing
Growing market D
Economic conditions - movement in the housing market is slow so many homeowners are renovating
Threats
Economic conditions - consumers are becoming price sensitive
Competitors entering the soft furnishing market.

20. Marketing objectives: Strategic thrust & Strategic objectives
A- Strategic thrust: Defines future direction
Existing P in existing markets (market penetration )
New P for existing markets (P development)
Existing P in new markets (market dvlp)
New P for new markets (new markets)

21. Fig 2.4 Strategic thrust options

22. Market penetration
Take existing P in existing market
Existing customers become more brand loyal & new customers in same market begin to buy brand.
Getting existing customers to use brand more often (wash hair more frequently) & to use a greater quantity (2 spoonfuls of tea instead of one)
Product development
Increasing sales by improving P or developing new P for current markets. It may be brand extensions (Anadin Extra, Maximum &Strength) providing slightly modified features for target customers

23. Market development
Targeting new customers with existing P
When successful product range, there may be opportunities in new target markets.
Selling to different types of consumers (e.g., older)
Often means moving into ≠ geographic locations.
Entry into new markets
Selling new P into new markets
Most risky
Sometimes only option, especially if company's current market is in decline & future upturn is unlikely.

24. Strategic objectives
B- Strategic objectives: specific objectives at P level
Build - if a retailer is selling a P, it will need to build sales in order to grow its share of the market
Hold - Promotional price wars to protect market share in a particular category, e.g., seasonal P
Harvest - market share of a particular P is allowed to fall but profit margins are maximized.
Divest – P is dropped when it no longer profitable
By setting objectives, a retail marketing planner answers 'where would the business like to be?'

25. There are three key elements:
Core strategy
Marketing objectives set out the focus
Then core strategy identifies how these objectives are going to be achieved.
There are three key elements:
Target markets
Competitor targets
Competitive advantage

26. Target markets
 Marketing is not about chasing any customer at any price.
A decision has to be made regarding segments attractive to the business & match its supply capabilities.
Retailers need to understand target market they wish to serve.
Marketing planning process helps marketers to focus on identifying right target market.
Choice of target market will emerge as a result of SWOT analysis & setting of marketing objectives (strategic thrust).
☼ Retailer needs to link analysis from audit & SWOT analysis with company's resources & capabilities to develop a strategy

27. Competitive advantage
Retail marketing planners must consider which competitors to target.
Link between target markets & competitor targets is the competitive advantage
A competitive advantage is the achievement of superior performance through differentiation to provide superior customer value, or by managing to achieve lowest delivered cost

28. Most successful methods are built upon some combination of three advantages.
Being better - superior quality or service
Being faster - anticipate or respond to customer needs faster than the competition
Being closer - establishing close long-term relationships with customers

29. Another route to competitive advantage
Lowest relative cost position of all competitors.
Low prices, or by producing standard items thus higher profit margins than those of competitors.
Advertising as a tool for competitive advantage is often employed when P benefits are subjective
Distribution putting customer in mind, not only in terms of availability but also with respect to S levels, image & customer convenience.