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8/10/2019 (4) Developing a Retail Market Strategy
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Retail Market Strategy
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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
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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.
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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.
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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.
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Sustainable Advantage
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.
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Sustainable Advantage
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.
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Sustainable Advantage
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.
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Growth Strategies
Growth is the ultimate objective & retailers have four
type of growth opportunities
Market Penetration
Market Expansion
Retail Format Development
Diversification
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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
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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.
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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.
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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