(4) developing a retail market strategy

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Retail Market Strategy



Introduction

A retail strategy is the means by which a retailer

achieves goals & objectives. A retailer formulates

strategy for Merchandise, Promotions & Private

Brands.

The main focus of a retail strategy is upon

Target Market

Retail Format

Sustainable Competitive Advantage



Retail Strategy

Target Market is the market segment for whom the

retailer plans to focus resources and are prospect

customers.

Retail Format is the retail mix a retailer has for his

customers.

Competitive Sustainable Advantage is the

difference a retailer has or an edge a retailer can

maintain over competitors for a longer period of time.



Building a Sustainable Competitive

A retailer has seven opportunities to build such an

advantage over a longer period of time.

1) Customer Loyalty

2) Location

3) Human Resource Management

4) Distribution & Information System

5) Unique Merchandise6) Relations with Vendors

7) Customer Services.



Sustainable Advantage

Customer Loyalty: A retailer can build customer loyalty by

Positioning is design and implementation of a retail mix to

create an image of the retailer.

Loyalty Programs are the activities that convince customers to

buy from a specific retailer.

Location: is a critical factor in consumer selection

for a store.

This is one competitive advantage that can not be

duplicated.




Human Resource Management

Employees play a pivotal role in its success.Knowledgeable and skilled employees can help in

building customer loyalty.

Recruiting and retaining good employees is a hardtask.

If a retailer develops a strong and a positiverelationship with employees and organizationalstructure is a good one then it would pay in the longrun.




Distribution & Information System

All retailers strive for efficient operations. They want

to provide what customers wish to have. Unique Merchandise A retailer can have an edge in this by developing his

private label brands.

Vendor Relations

A retailer must develop strong relations with thevendors or suppliers of its products. As it may givehim certain exclusive rights.




Customer Services

Offering good service consistently is difficult as

humans are less consistent than machines. It is

required that customer service should be a naturalthing for all the team member of the retailer.

Most customers simply want to be treated well and

have basic simple requests.

Once a retailer earns service reputation than its an

advantage for a long time.



Growth Strategies

Growth is the ultimate objective & retailers have four

type of growth opportunities

Market Penetration

Market Expansion

Retail Format Development

Diversification



Market Penetration

A market penetration opportunity is about directing

efforts toward existing customers by using present

retailing format. This can be done by

Promotional Schemes

Opening new stores

Train staff for cross-selling & Add on Selling



Market Expansion

By Market Expansion we mean that you apply the

existing retail format to other segments and increase

sales.

Retail Format Development: It means that you

offer a different retail format (a format with a

different retail mix) to the same target market.



Diversification

Diversification opportunity means when a retailer

offers a new retail format to a market segment that is

not currently being served by him.

Related versus Unrelated Diversification

Vertical Integration means that retailers diversify inwholesaling or manufacturing.



Strategic Retail Planning Process

Strategic retail planning process is the set of steps a

retailer takes to develop a strategic retail plan.

1) Define the Business Mission

2) Conduct a Situation Audit

3) Identify Strategic Opportunities

4) Evaluate Strategic Opportunities

5) Establish Objectives & Allocate Resources6) Develop a Retail Mix & Implement Strategy

7) Evaluate Performance & Adjust

(4) developing a retail market strategy

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