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3-1 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 1
Strategic Planning in Retailing
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RETAIL MANAGEMENT:A STRATEGICAPPROACH11th Edition11th Edition
BERMAN EVANS
3-2 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 2
Chapter ObjectivesTo show the value of strategic
planning for all types of retailersTo explain the steps in strategic
planning for retailers: situation analysis, objectives, identification of consumers, overall strategy, specific activities, control, and feedback
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3-3 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 3
Chapter Objectives (cont.)To examine the individual elements of a
retail strategy (both controllable and uncontrollable), and to present strategic planning as a series of integrated steps
To demonstrate how a strategic plan can be prepared
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3-4 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 4
Retail StrategyThe overall plan or framework of action
that guides a retailerOne year in durationOutlines mission, goals, consumer market,
overall and specific activities, and control mechanisms
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3-5 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 5
Figure 3-1: Elements of a Retail Strategy
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3-6 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 6
Benefits of Strategic Retail PlanningBenefits of Strategic Retail Planning
Provides thorough analysis of the requirements for doing business for different types of retailers
Outlines retailer goalsAllows retailer to determine how to differentiate
itself from competitorsAllows retailer to develop an offering that
appeals to a group of customersOffers an analysis of the legal, economic, and
competitive environmentProvides for the coordination of firm’s total
effortsEncourages anticipation and avoidance of crises
3-7 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 7
Organizational Mission
Retailer’s commitment to a type of business
and to a distinctive role in the marketplace.
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3-8 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 8
Figure 3-2: The Focused Organizational Mission of Frisch’s Restaurants
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3-9 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 9
Ownership and Management Alternatives
Sole proprietorship is an unincorporated retail firm owned by one person
A partnership is an unincorporated retail firm owned by two or more persons, each with a financial interest
A corporation is a retail firm that is formally incorporated under state law; it is a legal entity apart from its officers
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3-10 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 10
Figure 3-3: Checklist to
Consider When Starting a New
Business
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3-11 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 11
Figure 3-4: Checklist for
Purchasing an Existing Retail
Business
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3-12 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 12
Durable Goods Stores:Automotive group
Furniture and appliances groupLumber, building, and hardware group
Jewelry stores
Nondurable Goods Stores:Apparel group
Food groupGeneral merchandise group
Gasoline service stations
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3-13 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 13
Service Establishments (Personal):Laundry and dry cleaning
Beauty/barber shopsFuneral services
Health-care services
Service Establishments (Amusement):Movie theatersBowling alleys
Dance hallsGolf courses
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3-14 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 14
Service Establishments (Repair):Automobile repair
Car washesConsumer electronics repair
Appliance repairs
Service Establishments (Hotel):HotelsMotels
Trailer parksCamps
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3-15 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 15
Image and Positioning
An image represents how a given retailer is
perceivedby consumers and others.
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3-16 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 16
Positioning ApproachesMass merchandising is a positioning
approach whereby retailers offer a discount or value-oriented image, a wide or deep merchandise selection, and large store facilities.
Niche retailing occurs when retailers identify specific customer segments and deploy unique strategies to address the desires of those segments rather than the mass market.
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3-17 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 17
Figure 3-6: Niche Retailing by Babies “R” Us
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3-18 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 18
Figure 3-7: Selected Retail Positioning Strategies
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3-19 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 19
Target Market Selection
Three techniquesThree techniquesMass marketingConcentrated marketingDifferentiated marketing
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3-20 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 20
Figure 3-8: Jean-Philippe Patisserie: A Shop of Distinction
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3-21 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 21
Strategic Implications of Target Market Techniques
Retailer’s location Goods and service mix Promotion efforts Price orientation Strategy
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3-22 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 22
RetailStrategy
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Uncontrollable Variables:
• Consumers• Competition• Technology• Economic conditions
• Seasonality• Legal restrictions
Controllable Variables:
• Store location• Managing business
• Merchandise management and pricing
• Communicating with customer
3-23 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 23
Table 3-4a: Legal Environment and Retailing
Store Locationzoning lawsblue lawsenvironmental
lawsdirect selling
lawslocal ordinancesleases and
mortgages
Managing the Businesslicensing
provisionspersonnel lawsantitrust lawsfranchise
agreementsbusiness taxesrecycling laws
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3-24 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 24
Table 3-4b: Legal Environment and Retailing Merchandise Management and Pricing
trademarksmerchandise restrictionsproduct liability laws and lemon lawssales taxesunit-pricing lawscollusion lawssale pricesprice discrimination laws
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3-25 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 25
Table 3-4c: Legal Environment and Retailing Communicating with the Customer
truth-in-advertising and selling lawstruth-in-credit lawstelemarketing lawsbait-and-switch lawsinventory lawslabeling lawscooling-off laws
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3-26 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 26
Table 3-6: Sample Strategic Plan
Sally’s is a small, independently owned, high-fashion ladies clothing shop
located in a suburban strip mall. It is a full-price, full-service store for fashion-
forward shoppers. Sally’s carries sportswear from popular designers, has a personal shopper for busy executives,
and has an on-premises tailor. The store is updating its strategic plan as a means of getting additional financing
for an anticipated expansion.
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3-27 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 27
Additional Concerns for Additional Concerns for Global RetailingGlobal Retailing
In addition to the strategic planning process:assess your international potentialget expert advice and counselingselect your countriesdevelop, implement, and review an
international retailing strategy
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3-28 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 28
Factors Affecting the Success of a Global Factors Affecting the Success of a Global Retailing StrategyRetailing Strategy
TimingA balanced international programA growing middle classMatching concept to marketSolo or partneringStore location and facilitiesProduct selection
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3-29 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall 29
Figure A3-1: Factors to Consider When Engaging in Global Retailing
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3-30 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall
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