BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION:

MARKETING MANAGEMENT

COURSE MODULE COURSE UNIT WEEK

MKTG318 – Retail
3 7
Management
Retail Strategy

 Read course and unit objectives

 Read study guide prior to class attendance
 Read required learning resources; refer to unit
terminologies for jargons
 Proactively participate in classroom discussions
 Participate in weekly discussion board (Canvas)
 Answer and submit course unit tasks

At the end of this unit, the students are expected to:

1) Explain how do retail strategy reflected in the financial objectives.
2) Discuss what do retailers do to assess the performance of the strategies
3) Explain why do retailers need to evaluate the performance.
• Retailing Management , Levy M and Weitz B. , 7TH Edition , McGraw – Hill , Asia

Retail Strategy

» Retail Strategy

- A retail strategy is a comprehensive plan and set of principles that governs a store. A retail
strategy is a well-defined plan that retail businesses develop in order to access the market and
build long-term relationships with customers. In every industry, the stages involved in strategy
creation are the same.
- A retail strategy is the method through which you produce and market your items or services to
clients. This strategy includes several components, including as site, shop,
merchandise/assortment, visual merchandising, staff, service, mass media and communications,
and price.
- A retail strategy is a comprehensive marketing plan for a product or service that is designed to
reach the ultimate retail channel and influence consumers. This strategy encompasses
everything from what retail channels a product or service will be offered in to what pricing or
sales incentive should be given and how the product should be displayed on the shelf.
- A retail strategy is designed for the distribution of a product through retail locations. A variety of
factors influence the selling of a product when it is offered through a retail location.
Example 1
- Julian is a customer who wants to transition from a fried food and meat-based diet to an organic
and vegan diet and lifestyle. Julian decides to conduct some research in order to discover a new
spot to buy fresh fruits and veggies.
- She stumbles across a commercial for a farmer's market while doing research. Images of
brilliant green veggies and vibrant, colorful fruits appeared throughout the commercial. "never
frozen" and "local" were among the phrases that flashed over the screen.
- Julian was enticed by this commercial and decided to begin getting her food from this farmer's
market. The farmer's market knows what to highlight in their advertisements to get new
potential customers to attend.
 Example 2
- One example of a retail strategy is the placement of a product in a retail channel. When we walk
to a retail store, we often notice goods like gum, chocolates, and other products with smaller
SKUs that may be picked up while the client is waiting at the billing counter.

Factors to consider while designing a retail strategy

In general, retail strategy focuses on bringing people to the business and developing methods to
persuade them to purchase your items. This idea is related to retail design strategy. If you consider the
paths your consumers take to locate and then shop in your business, you can develop a suitable design
approach to show your store in an appealing and appealing manner. This technique, when properly
implemented, operates on your consumers' subconscious, compelling them to stay longer and spend
more.
• Many elements that impact the retail industry must be considered while creating a retail
strategy.
• The retailer should examine these variables while keeping the cell project in mind before
designing the retail strategy.

#1 Know thy customers

- Because the customer is the one who will purchase the material, understanding the customer
entails knowing the customer's likes and dislikes, the preferences and tastes of various sorts of
consumers, and current market trends.
- The other reason is that many companies are using the wrong lens to define what they should
know about a customer. They rely on old thinking like the steps a customer takes on a forced
march towards a purchase, as the original marketing funnel described, rather than thinking
about the often complex channel-surfing decision journey customers take. That journey is
everything.
- Knowing thy client necessitates a thorough understanding of human behavior, the subconscious
mind, and the marketplace. Cult Branding is all about taking this information and extrapolating
the more profound memes and themes of your client's mind and using it to create a more
engaging customer experience.

#2 Get new and retain old

- It is critical for the retailer to keep its consumers. Retailers can get new consumers through
advertising and marketing initiatives, but the emphasis should also be on maintaining existing
customers
- Getting a new client might cost five times as much as keeping an old one.
- Increasing client retention by 5% can boost profitability by 25-95 percent.
- Selling to an existing client has a success rate of 60-70 percent, whereas selling to a new
customer has a success rate of 5-20 percent.

#3 Know your business

- Understanding the retail industry is also essential in developing a retail strategy. It is critical that
the retailer examine the nature of the business as well as the type of the items offered.
- The Know Your Business (KYB) procedure is similar to the well-known and standardized Know
Your Customer (KYC) process. The distinction is in the process's aim and purpose, which is
 centered on identifying firms and suppliers in the first scenario and consumers or customers in
the second.

#4 Know the competition

- Retail store has numerous rivals in the neighborhood, and it is critical that the retail business be
aware of its competition and their distinct products
- Knowing who your rivals are and what they provide may help you differentiate your products,
services, and marketing. It will allow you to set competitive rates and respond to rival marketing
campaigns with your own initiatives.
- You may utilize this knowledge to develop marketing tactics that capitalize on your rivals' flaws
while also improving your own business performance. You may also analyze potential dangers
posed by both new entrants and established rivals in your industry. This understanding will
assist you in being realistic about your chances of success.

Retail strategies to boost sales

Several techniques have been implemented by various retailers in order to increase the number
of sales in the business. Although most retail organizations differ from one another on a regular
basis, they all use the following basic tactics to improve sales.

#1 Partnerships
- This relationship can be mutually agreed upon for a fee based on the conditions of business.
Every client recommendation may be charged by the other merchants, or the retailer may
return the favor by referring consumers to his reference when they inquire about a product that
the retailer does not stock.
#2 Social media
- The easiest way to reach a particular set of the targeted audience is social media.
- With the help of social media, unwanted advertising expenses can be avoided, and only specifically filtered customers
can be targeted, and the store can be positioned. Using Facebook has become very common to promote a business.
#3 Referral campaigns
- Referral campaigns are similar to word-of-mouth marketing in that they promote two distinct consumers by current
customers, but the difference is that in recommendation campaigns, customers are compensated for each successful
referral, which is not the case with word-of-mouth efforts.
#4 Instore advertising
• Many retail shops have excellent in-store advertising that quickly converts walk-in customers. These shops use big
displays of items in their windows to attract window shoppers by emphasizing special discounts and the finest of their
wares.

Elements of retail strategy

• Target Market
• the market segment(s) toward which the retailer plans to focus its resources and retail mix
• A target market is a group of people who have certain traits and have been selected by a firm as prospective
buyers for its products. Identifying the target market influences a company's decision-making process as it
creates, packages, and advertises its product.
• A target market may be classified generally based on age, geography, income, and lifestyle. Many additional
demographics may be taken into account. Their age, hobbies, interests, and occupations may all be taken
into account.
• Retail Format
 • the nature of the retailer’s operations—its retail mix
• The retail format (also known as the retail formula) impacts shop selection and meets customer
expectations. A retail format, at its most basic, is a simple marketplace, that is, a venue where products and
services are traded.

• Sustainable Competitive Advantage

• an advantage over the competition
• Sustainable competitive advantages are assets, qualities, or skills of a firm that are difficult to imitate or
exceed, and that give a superior or advantageous long-term position over competitors.
• The notion is that in order for a business to retain a sustained competitive edge, it must own a collection of
exploitable resources with four key qualities. These resources must be (1) valued, (2) scarce, (3) imperfectly
imitable (difficult to mimic), and (4) non-substitutable.

BUILDING A SUSTAINABLE COMPETITIVE ADVANTAGE

Three Approaches for Developing a Sustainable Competitive Advantage

• building strong relationships with customers,
• building strong relationships with suppliers,
• achieving efficient internal operations.
Customer Loyalty
• customers are committed to buying merchandise and services from a particular retailer.
• More than simply liking one retailer over another
• Customers will be reluctant to patronize competitive retailers
• Retailers Build Loyalty By:
• Developing a strong brand image
• Having a clear and consistent positioning
• Providing outstanding customer service
• Undertaking Customer Relationship Management (CRM) programs.
Brand Image
• Retailers build customer loyalty by developing a well-known, attractive image of their brand, their name.
• Strong brand images facilitate customer loyalty because they reduce the risks associated with purchases.
• They assure customers that they will receive a consistent level of quality and satisfaction from the retailer.
• The retailer’s image can also create an emotional tie with a customer that leads the customer to trust the
retailer.
Positioning
• Retailers must also place themselves on the market in order to be regarded appropriately by customers. Retailers use
an unique marketing technique to create consumer loyalty in target groups, whether through cost differential or by
emphasizing on quality. As a result, the study is even more intriguing, because merchants often have not only diverse
store layouts, but also private labels (store brands) via which they attempt to achieve their goal.
• A retailer’s brand image reflects its positioning strategy.
• The design and implementation of a retail mix to create an image of the retailer in the customer’s mind relative to its
competitors.
• PERCEPTUAL MAP is frequently used to represent the customer’s image and preferences for retailers.
• developed so that the distance between two retailers’ positions on the map indicates how similar the stores
appear to consumers.
Unique Merchandise

• While creating a competitive advantage through merchandise is challenging, many retailers achieve a sustained
competitive advantage by developing private-label brands (also known as store brands), which are items produced,
marketed, and accessible only at that shop.
• It is difficult for a retailer to develop customer loyalty through its merchandise offerings because most competitors
can purchase and sell the same popular national brands.
• PRIVATE-LABEL BRANDS (AKA store brands or own brands)
• products developed and marketed by a retailer and available only from that retailer.
Customer Service
 - Customer service is the assistance you provide to your consumers both before and after they purchase and utilize
your products or services, allowing them to have a simple and pleasurable experience with you. If you want to keep
clients and develop your business, you must provide excellent customer service.
• Retailers also can develop customer loyalty by offering consistent excellent customer service.
• “WOW Stories”—true stories of employees who have gone above and beyond conventional customer service
expectations

Growth Opportunities and Competitive Advantage

• MARKET PENETRATION GROWTH OPPORTUNITIES have the greatest chances of succeeding because they build on
the retailer’s present bases of advantage and don’t involve entering new, unfamiliar markets or operating new,
unfamiliar retail formats.
• When retailers pursue MARKET EXPANSION OPPORTUNITIES, they build on their advantages in operating a retail
format and apply this competitive advantage in a new market.
• A retail format DEVELOPMENT OPPORTUNITY builds on the retailer’s relationships and loyalty of present customers.
• Even if a retailer doesn’t have experience and skills in operating the new format, it hopes to attract its loyal
customers to it.
- Retailers have the least opportunity to exploit a competitive advantage when they pursue
DIVERSIFICATION OPPORTUNITIES

 https://www.shipbob.com/blog/multichannel-retailing/.
• file:///Users/dindoinso/Downloads/A_Literature_Review_of_Retailing_Sector_and_Busine.pdf
• Retail Management: A Strategic Approach (11th Edition) Barry R. Berman, Joel R. Evans
• http://sim.edu.in/wp-content/uploads/2018/02/RETAIL-MANAGEMENT-Notes.pdf