Retail Marketing Retail Marketing StrategyStrategy

Rajnish KumarRajnish Kumar

DETERMINING THE COMPETITORS

I. POSITIONING: SHOPPERS’ STOP

WestsideWestside

END OF SEASON SALE depicted on a bright red background along with the sale period duration as well as maintaining its position of being a fashionable store..

IV. PROMOTION: LIFESTYLE

►The Retail Marketing strategy is The Retail Marketing strategy is similar to Marketing strategysimilar to Marketing strategy

►Marketing strategy is an integral Marketing strategy is an integral component of corporate strategy, component of corporate strategy, defining how the organization will defining how the organization will successfully engage with customers, successfully engage with customers, prospects, and competitors in the prospects, and competitors in the market arena.market arena.

► It is derived from broader corporate It is derived from broader corporate Strategies, corporate missions, and Strategies, corporate missions, and corporate goals corporate goals

►The various strands of the strategy , The various strands of the strategy , which include advertising, In store which include advertising, In store communication, internet Marketing, communication, internet Marketing, promotions and public relations can promotions and public relations can be orchestrated. be orchestrated.

►Many companies cascade a strategy, Many companies cascade a strategy, by creating strategy tactics that then by creating strategy tactics that then become strategy goals for the next become strategy goals for the next level or group. Each group is expected level or group. Each group is expected to take that strategy goal and develop to take that strategy goal and develop a set of tactics to achieve that goal. a set of tactics to achieve that goal. This is why it is important to make This is why it is important to make each strategy goal measurable each strategy goal measurable

Key elements …Key elements …► Map your customers needs.Create a niche based on Map your customers needs.Create a niche based on

demand.demand.► You will have price sensitive customers and you will have You will have price sensitive customers and you will have

customers who are willing to pay extra for Qualitycustomers who are willing to pay extra for Quality► Remmember you cannot make sense for everything to Remmember you cannot make sense for everything to

every body. Have a Target Group which you think will every body. Have a Target Group which you think will respond to respond to youryour USP USP

► Every communication Every time should talk about the Every communication Every time should talk about the same positioning else it will be difficult for the customers to same positioning else it will be difficult for the customers to relate to you as a retailer and as a businessrelate to you as a retailer and as a business

► Avoid multiple channels of communication. Choose the ones Avoid multiple channels of communication. Choose the ones with which your customers engage the most. It will also help with which your customers engage the most. It will also help in measuring the success of your marketing mix.in measuring the success of your marketing mix.

► Monitor constantly through interaction with customers the Monitor constantly through interaction with customers the success of your sales pitch. You could go terribly wrong success of your sales pitch. You could go terribly wrong thinking all the while that you have been able to grab more thinking all the while that you have been able to grab more heart and mind share than your competition.heart and mind share than your competition.

► You may not be able to measure success instantly but you You may not be able to measure success instantly but you can keep looking for signals which will tell you if you are can keep looking for signals which will tell you if you are headed in the right direction.headed in the right direction.

Marketing PlanMarketing PlanMarketing is more than just selling and advertising.  It's about Marketing is more than just selling and advertising.  It's about

what you need to do to capture and keep your customers over what you need to do to capture and keep your customers over time. time. 

Your marketing plan needs to answer the question: Your marketing plan needs to answer the question:  Why am I in business ?Why am I in business ? What do customers want ?What do customers want ? and Why will customers buy from me and not my competitors?and Why will customers buy from me and not my competitors?

Developing your marketing plan covers four main aspects:Developing your marketing plan covers four main aspects:► Market research.Market research.► Marketing goals.Marketing goals.► Marketing strategies.Marketing strategies.► Monitor and control. Monitor and control.

Market ResearchMarket Research Before you develop your marketing goals and strategies you need to Before you develop your marketing goals and strategies you need to

identify what are the most promising Retail opportunities you should identify what are the most promising Retail opportunities you should pursue.  You need to consider:pursue.  You need to consider:

   Your Products and ServiceYour Products and Service  

It may seem obvious, but you will benefit from analyzing your It may seem obvious, but you will benefit from analyzing your product/service offering from the customer point of view.  Ask yourself product/service offering from the customer point of view.  Ask yourself what:what:

► benefits are you offering your customers?benefits are you offering your customers?► which ones will be  most valued by customers?which ones will be  most valued by customers?► Do customers look for a wider choice or a sharper price in your context ?Do customers look for a wider choice or a sharper price in your context ?► What constitutes Quality as in Consumers perception ?What constitutes Quality as in Consumers perception ?► How much more they are willing to pay for Exceptional Service? Can I How much more they are willing to pay for Exceptional Service? Can I

differentiate with Better Service ?differentiate with Better Service ?

Your MarketYour Market  

Understand your market and identify factors that will impact on your Understand your market and identify factors that will impact on your business.  Aspects to consider:business.  Aspects to consider:

► What is its size and is it growing or shrinking?What is its size and is it growing or shrinking?► Where are your target customers located?Where are your target customers located?► What are its characteristics, eg. gender, aspirations, ability to pay?What are its characteristics, eg. gender, aspirations, ability to pay?► What changing social trends and attitudes could affect your business?What changing social trends and attitudes could affect your business?

Your CustomersYour Customers  

Once you have researched your market you can define the specific segments you Once you have researched your market you can define the specific segments you intend to target.  Market segments are groups of customers who share similar intend to target.  Market segments are groups of customers who share similar attributes and attitudes -   attributes and attitudes -  

► Purchasing powerPurchasing power► location (distance, Neighborhood type)location (distance, Neighborhood type)► gendergender► ethnic identity ( South Indians, Bengalis, Expatriates)ethnic identity ( South Indians, Bengalis, Expatriates)► attitudes ( frequent shoppers ,treasure hunters, discount seekers) and attitudes ( frequent shoppers ,treasure hunters, discount seekers) and ► attributes (Washing Machine owners, car owners)attributes (Washing Machine owners, car owners)► Shopping trip Shopping trip   

You need to understand the factors that will drive your customers to buy products at You need to understand the factors that will drive your customers to buy products at your storeyour store

Your CompetitorsYour Competitors  

Identify both direct competitors (those selling the same products in similar retail Identify both direct competitors (those selling the same products in similar retail format) and indirect competitors (those offering same products but in different format) and indirect competitors (those offering same products but in different format).format).

   Information you need to know about competitors includes:Information you need to know about competitors includes:► What exactly they offer their customers ?What exactly they offer their customers ?► How well established they are and their reputation?How well established they are and their reputation?► Their strengths and weaknesses and what makes them successful?Their strengths and weaknesses and what makes them successful?► Their pricing?Their pricing?► Their Promotion strategiesTheir Promotion strategies► What’s the level of service customers get at your competitors storeWhat’s the level of service customers get at your competitors store

Market Research SourcesMarket Research Sources

► Competition ShoppingCompetition Shopping► Market SurveyMarket Survey► Consumer researchConsumer research► Exit interviews at competitor locationsExit interviews at competitor locations► Published data Published data ► Discussions with SuppliersDiscussions with Suppliers

Your SWOT AnalysisYour SWOT Analysis  

Using the information you have collected you can undertake a Using the information you have collected you can undertake a SWOT analysis to help you determine your marketing goals.  SWOT analysis to help you determine your marketing goals.  Your SWOT involves assessing:Your SWOT involves assessing:

► Strengths you should build onStrengths you should build on► Opportunities you should exploitOpportunities you should exploit► Weaknesses you need to overcomeWeaknesses you need to overcome► Threats you need to manageThreats you need to manage

You need to develop strategies to deal with each identified issue.You need to develop strategies to deal with each identified issue.

Setting Your Marketing Setting Your Marketing GoalsGoals

  Your marketing goals build on your broader business objectives Your marketing goals build on your broader business objectives and specify:and specify:

► What product/service you will offer for which market segments ?What product/service you will offer for which market segments ?► What key benefits you will offer – Customization, Service, What key benefits you will offer – Customization, Service,

Ambience?Ambience?► How you will gain a competitive advantage – Price, Quality, How you will gain a competitive advantage – Price, Quality,

design ?design ?► What specific targets you aim to meet over what time frame- What specific targets you aim to meet over what time frame-

market share, revenue, Footfalls ?market share, revenue, Footfalls ?

Your marketing goals should pass the SMART test:Your marketing goals should pass the SMART test:

► S - SpecificS - Specific► M - MeasurableM - Measurable► A - AchievableA - Achievable► R - RealisticR - Realistic► T - Time boundT - Time bound

Marketing Strategies…Marketing Strategies…

►Based on Market DominanceBased on Market Dominance► Leader Leader ► Challenger Challenger ► Follower Follower

►Based on Competitive Advantage Based on Competitive Advantage ► Price leadership Price leadership ► Product differentiation Product differentiation

► Market segmentationMarket segmentation ►Based on InnovationBased on Innovation ► PioneersPioneers► FollowersFollowers

To put your goals into action you need to develop specific strategies To put your goals into action you need to develop specific strategies to achieve them.  Key aspects that need to be covered regardless of to achieve them.  Key aspects that need to be covered regardless of what your strategy is :what your strategy is :

► ProductProduct  Your product offering including width of assortment,   Your product offering including width of assortment, quality, packaging, guarantees, after-sales service. quality, packaging, guarantees, after-sales service. 

  ► PricePrice  Your pricing policy – cost plus or consumer facing, target   Your pricing policy – cost plus or consumer facing, target

margins including mark downsmargins including mark downsYour pricing should be based on a realistic assessment of all your Your pricing should be based on a realistic assessment of all your costs and taking into account what the market will bear and the costs and taking into account what the market will bear and the image you are trying to create.image you are trying to create.

► PromotionPromotion  Your approach will depend on the nature of your   Your approach will depend on the nature of your business and can include new arrivals, buy one get one, flat business and can include new arrivals, buy one get one, flat discounts selling, cross category promotions, loss leaders, discounts selling, cross category promotions, loss leaders, competition based. competition based. 

► PlacePlace  How you will advertise – Posters, Banners, In Store   How you will advertise – Posters, Banners, In Store Communication, Print or electronic Media, Newspaper Flyers. It is Communication, Print or electronic Media, Newspaper Flyers. It is important that you use the correct medium irrespective of the cost. important that you use the correct medium irrespective of the cost. There is no point using a medium with which your customers do not There is no point using a medium with which your customers do not relate as there will be no impact of such communication.relate as there will be no impact of such communication.

Monitor and ControlMonitor and Control► Marketing is a necessary cost to the business Marketing is a necessary cost to the business

and you should set a marketing budget, and you should set a marketing budget, including monthly cash flow, as part of your including monthly cash flow, as part of your business plan.business plan.

► Measuring the results of your marketing Measuring the results of your marketing activities will ensure you continue to get activities will ensure you continue to get value for your marketing investment. value for your marketing investment. 

► Assessing an increase in revenue or Assessing an increase in revenue or customer numbers as a result of promotional customer numbers as a result of promotional activities allows you to decide what activities activities allows you to decide what activities give you the best return.give you the best return.

Winning at Retail Winning at Retail Ander and Stern’s book Winning at Retail puts forward a model designed by Ander and Stern’s book Winning at Retail puts forward a model designed by

Norm McMillan and Sid Doolittle, that can steer a retailer towards success. It is Norm McMillan and Sid Doolittle, that can steer a retailer towards success. It is a simple and straightforward model that has been designed from the a simple and straightforward model that has been designed from the consumer’s point of view. The cornerstone of this new model is the Est model of consumer’s point of view. The cornerstone of this new model is the Est model of retail success. The retail success. The Est modelEst model guides retailers towards making their firms the guides retailers towards making their firms the best in one of five best in one of five essentialessential areas: areas:

► 1. 1. CheapCheap- Essentially: Winning with Price- Essentially: Winning with Price► 2.2. Big Big- Essentially : Winning with Dominant Assortments- Essentially : Winning with Dominant Assortments► 3.3. Hot Hot- Essentially: Winning with Fashion- Essentially: Winning with Fashion► 4. 4. EasyEasy- Essentially: Winning with Solution –Oriented Service- Essentially: Winning with Solution –Oriented Service► 5. 5. QuickQuick- Essentially : Winning with Fast Service- Essentially : Winning with Fast Service

The retailers must strive to be the best in their segment of specialization, The retailers must strive to be the best in their segment of specialization, whether it is low prices they are offering or superior service or the most whether it is low prices they are offering or superior service or the most fashionable clothes. A retailer has to decide on how to differentiate themselves fashionable clothes. A retailer has to decide on how to differentiate themselves from all the other stores who provide a similar or same service and/or product. from all the other stores who provide a similar or same service and/or product. Location is often used as a segment specialization but in recent times that has Location is often used as a segment specialization but in recent times that has been proven to not be a strong enough reason. It might work in tandem with been proven to not be a strong enough reason. It might work in tandem with one of the Est factors but unlikely to do so alone in the long term.one of the Est factors but unlikely to do so alone in the long term.

To be successful at holding an Est position, a retailer must ensure that the To be successful at holding an Est position, a retailer must ensure that the entire company has the same focus. To sell products keeping a low margin, a entire company has the same focus. To sell products keeping a low margin, a company must have low operating costs. Wal-Mart is the perfect example of a company must have low operating costs. Wal-Mart is the perfect example of a retailer in the Cheap-Est position. The company focuses on its products being retailer in the Cheap-Est position. The company focuses on its products being the cheapest and this position translates into every decision that the company the cheapest and this position translates into every decision that the company makes.makes.