940 3 Retail 1st Lecture

7/28/2019 940 3 Retail 1st Lecture

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RETAIL MARKETING

LECTURER: VALERIA VOLPONI

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Lessons: every Wednesday, from 2 p.m. to 5 p.m.

One exception: November the 23th, the lesson is

dedicated to a RETAIL TOUR in Milan

Final lesson is November the 30th

Last week of the course examination week - is the

first week of December


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15 minutes break

Suggested readings: Retail marketing, by

Ogenyi Omar, Financial Times Pitman Publishing

Available at Amazon and Libreria Hoepli, Milan

Lessons uploaded on ESE portal, the following

week


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Two assessment sessions

1. Mid term examination: November the 2nd


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2. Final project

Group written project

Final project is due on November the 30th

Last week of the course: oral presentation in class


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Do not show up late in class

Participate


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Exam

On the Oral Presentations day, student must stay in

Those leaving before will be penalized


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What is retail marketing

History & evolution of fashion and design

distribution

Location & Architecture

Product selection, buying & merchandising

management

Understanding the store environment


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Visual merchandisingWindow design, signage & graphics

Consumers purchasing behaviour

On line and off line

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Know the elements of retail marketing

Establish the relationships between the variable

elements

Understand the basic model of consumer

behaviour

Design the perfect store for your target


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Technical but also very concrete

Wide

Focused on the global context


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= ?


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= ?


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Fast fashion vs haute couture?

Global vs local?

Safety or surprise?

Loyalty or not?


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Fast fashion vs haute


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Fast fashion vs haute


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.

Hypermarkets

store?


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Hypermarkets

store?


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Safety or

surprise?


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Safety or

surprise?


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Loyalty or not?


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Retail its hard to define

StoresDistribution channels

Architecture

Experience


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The prosperous retail organisations are those that: THINK AHEAD

CHANGES

DEVELOP AN ORGANISATION CAPABLE OF

RECOGNISING AND EVALUATING BUSINESS

.

COMPETITORS


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marketing

Retail marketing influences our daily lives in our

AS CONSUMERS

AS SHOPPERS


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marketing

It encompasses a wide range of activities Environmental analysis surrounding the retail

industry

Retail market research

Consumer analysis

THE ROLE OF RETAIL MKTING CHANGES


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What is marketing? The concept of presenting goods which people

want, in the manner and place in which they are

required

With the aid of acka in romotion r

At the right price


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When was marketing born?

Ever since people started to barter the surpluses

they had accumulated, that was marketing (Kotler)

The 60s, marketing in its modern form

More and more sophisticated


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When was RETAIL -marketing born?

When there had been a shift in power from THEMANUFACTURER to THE RETAILER, in the early

That was the moment in which most own labelac v es s ar e o grow as a par o re a ers wopronged strategy:

IMPROVE THEIR MARGINS

DIFFERENTIATE THEMSELVES FROM THECOMPETITORS


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The key aspect of retail mkting is an attitude of

In taking marketing decisions, the retail manager

customer

ese ec s ons w us e r ven y w a ecustomer needs and wants

The most difficult part of retail mkting, but the keyto its success, is the ability to adopt thecustomers view oint


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Los Angeles, 1927


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Los Angeles, 1927


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Paris, Les Halles, 1850


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4 theories to explain retail institutional changes:

THE DIALECTICAL PROCESS

RETAIL LIFE CYCLES


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Proposed by Mc Nair (1957)

Changes in retail institutions move in circle,

consisting of three phases:

Entry Innovation

Trading Up


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The repetition of these phases creates a pattern of

1. ENTRY - INNOVATION

A new retail institution enters the market at thelower end of the sho in o ortunit

Its differential advantage over existing competitors

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Lower price is obtained through

STRICKT COST CONTROL

,

at low rent sites, and even lowering storestandards and merchandise ualit

The innovator sometimes sacrifices profit

competitors

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2. TRADING UP

If the innovation succeeds, emulators copy it over

3.VULNERABILITY

In response to competitive pressure, the stores add

services and improve quality, to overpass their

This creates the opportunity for new institutions to

enter at the lower end of the shopping opportunity

line, and the cycle continues

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It views retailing as an evolutionary system

The different retail institutions adapt to each

other, in the process generating new retail

formats

When challen ed b a com etitor ith a

differential advantage, an established institution

will adopt strategies and tactics in the direction

of that advantage, thereby negating some of the

innovators attraction

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The new institution then modifies its strategy to

These mutual adaptations gradually move the two

retailers together in terms of

merchandise offerin s

service

price

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application

The emergence of the DISCOUNT department

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This model states that retail institutions pass

stages

INTRODUCTION

GROWTH

MATURITY

DECLINE

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New types of retail institutions first appear at the

Department Stores (1860)

Fast food (1950)

During this stage the new retail concept has a

marked competitive advantage over

,assortment, convenience or a new approach to

sales & romotion

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The competitive advantage pushes the institution

,

characterised by growth in both sales and profits

(This stage is also marked by the emergence of

new competitors who imitate the original

As competition increases, firms expand their

chains geographically to reach new market and

increase sales

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The stage of rapid growth is inevitably followed by

growth slows and sales start to stagnate

The final stage is the decline: sales and profits are

low

Failure can be avoided by REPOSITIONING

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Charles Darwins theory of the evolution of the

According to this working hypothesis, retail

institutions may lose their relative positions or

disappear

No retail institutions is sacred

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Retailing is more competitive than most other

,

MULTIDIMENSIONAL COMPETITIONS exists

We can identif five levels of retail com etition

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Marketing mix is a term used to describe the

formulate and execute marketing strategy

Product, price, place, promotion

Store location

Merchandise assortment

Store ambiance

us omer serv ce

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Customer service

Customer communications

Store image

Sales incentives

THE AIM IS FOR EACH STORE TO HAVE A

DISTINCT RETAIL IMAGE IN CONSUMERS

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An appropriate retail marketing mix creates a

Seller-buyer trust

Customer loyalty

Goodwill

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marketing mix

STORE LOCATION

Shopping decisions are based upon:

Available parking space

Travelling time

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marketing mix

MERCHANDISE

The nature of merchandise the store offers may

depend on the customer expectation and the

stores perceived image of itsself

Merchandise assortment defines the stores

competitive advantage

the nature of merchandise assortment

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marketing mix

STORE AMBIENCE

This is the atmosphere or the experience that the

retailer wishes to convey

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marketing mix

CUSTOMER SERVICE

Its extent may depend upon the expectations of the

shoppers

For some groups of customers, the range andde th of services offered b the store ma be the

key incentive to patronage and their continuous

loyalty

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marketing mix

PRICE

Brand price can be seen as the signature of brand

quality

In the absence of other variable marketing cues,rice ma be used as a surro ate to erceived

quality and value for money

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marketing mix

COMMUNICATION

Its role is to make customers aware of the stores

offerings and to integrate the activities of

merchandise display, internal signs, advertising

and personal selling

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marketing mix

PERSONAL SELLING

Remains a very important element of the retail

marketing mix in some sectors, especially where

products are relatively complex, expensive and

infrequently purchased

In predominantly self service stores, they help to

guide shoppers in their brand selection

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marketing mix

STORE IMAGE

Many retailers have developed particular images

that they consider to be assets

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marketing mix

SALES INCENTIVES

Most retailers now offer store cards and loyalty

schemes as an added inducement to patronise

their store

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marketing mix

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You work for FOREVER 21: an American fast

as on re a er, se ng c o es, accessor es, s oesto young girls 15 to 35 yrs

You intend to establish a new store in Milan

important area of its international operation

ou recogn se e mpor ance o mar e ng ncontributing the companys successful

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The task:

Using international retailers which, in your opinion,

have got their retail marketing right as examples

Prepare a report for your company director (me)

Explain how your organisation could benefit from

adopting a retail marketing philosophy of the

forefront of every operation)

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The task:

Choose your favorite store

the variable elements of the retail marketing mix

Store location, merchandise, store image, sales

incentives, personal selling, communication, price,

,

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940 3 Retail 1st Lecture

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