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Retail Marketing - ftms.edu.my - Retail Marketing... · Retail Marketing Introduction and overview...

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Retail Marketing Introduction and overview “Today’s shoppers want the total customer experience: superior solutions to their needs, respect, an emotional connection, fair prices and convenience. Offering four out of five pillars isn’t enough; a retailer must offer them all” (Berry 2001)
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Retail Marketing

Introduction and overview “Today’s shoppers want the total customer experience: superior solutions to their needs, respect, an emotional connection, fair prices and convenience. Offering four out of five pillars isn’t enough; a retailer must offer them all” (Berry 2001)

Marketing: integrating the retailing effort

(McGoldrick 2000)

Top 10 global retailers Company

Country of Origin Rank

2006 Retail Sales

(US$mil)

CAGR 2001-2006

Wal-Mart US 1 345.0 11.1 percent

Carrefour France 2 97.9 2.3 percent

The Home Depot, Inc US 3 90.8 11.1 percent

Tesco UK 4 80.0 12.5 percent

Metro Germany 5 74.9 4 percent

The Kroger Co. US 6 66.1 5.7 percent

Target Corporation US 7 59.5 8.3 percent

Costco Wholesale Corporation US 8 59.0 11.6 percent

Sears Holdings Corporation US 9 53.0 8 percent

Schwarz Unternehmens Treuhand KG Germany 10 52.4 12 percent

http://www.interbrand.com/images/studies/

85_Interbrand_Best_Retail_2009.pdf

ESSENTIAL READING

Graduates and retailing

“Managerial skills and competences are

critical determinants of a retailer’s ability to

operate successfully in a highly turbulent

environment” (Dawson 1995)

“The retail sector has some of the most

innovative and successful companies in the

world yet it is only recently that retailing has

become recognised as a true profession”

(Jennison 1997)

Could this be you? Guess who?

Area Manager

Are you a born leader? Do you have the drive and strength of character to help

shape the global success story?

As we expand throughout Europe, North America and Australia, our reputation

is growing, but our guiding principles remain constant.

The most important element in achieving this is having the right people, which is

why we attach such importance to our employees and their development. We're

looking for the best individuals, the brightest of their generation; we expect a

great deal from them and offer something very special in return.

We offer an individual training plan that's designed especially for you, a

market leading package and fantastic prospects:

£40000 plus a fully expensed Audi A4 rising to £63500 plus pension,

private healthcare, life assurance, five weeks’ holiday and opportunity for

directorship within five years. Opportunities nationwide.

Retailing defined

“The sale of goods and services to the ultimate consumer for personal, family or household use” (Cox and Brittain)

“The sale of articles either individually or in small numbers, directly to the consumer” (Freathy)

“Any business that directs its marketing effort towards satisfying the final consumer based upon the organisation of selling goods and services as a means of distribution” (Gilbert)

“The sale of goods and services to consumers for their own use” (McGoldrick)

Scope and purpose of retail marketing

Understand customer values

Create a retail offer that satisfies these values

Communicate these values to the target audience

Create a retail format and experience that delivers these values

Manage the process to ensure maximisation of customer value

The value equation in retailing

Higher prices = more money

Long queues = more time

Poor layout = more stress

Unknown brands = more risk

Key components of retailing

Culture and retail

customers

Retail locations and

outlets

Shopkeepers/retail

managers

Product sourcing and

distribution

Business relationships

Merchandising and

selling

Context, social interaction,

psychosocial meaning (Aldi/Lidl in UK,

Tesco in Thailand, IKEA in China)

Locations and formats, demographic

change, shopping motivation

(destination, social, leisure)

Business Managers, sole traders, 24

hour trading, 600 staff, £100 million

turnover store

Selection and assembly of

merchandise, operational efficiency

and competitive advantage eg local

sourcing

Lean and agile supply chains as SCA

(Zara)

Range, assortment, presentation and

display

Driving retail success: The Retail Growth

Cycle (McGoldrick 2000)

Retail evolution – retail life cycle

Introduction Growth Maturity Decline

Sales

Market share

Dept

store

Grocery superstore

DIY superstore

Variety store Furniture

hypermarket

Clothing

superstore

Internet grocery

Based on McGoldrick

Tesco set to enter this

Market?

Implications of retail life cycle

Assess value of long term investment in

expensive property assets (buy or rent

decisions, 2005 Tesco £600 million sale and

leaseback deal)

Shorter timescale for ROI

Multiple format operators can use portfolio

analysis to assess position of various assets

which might lead to renewal or exit prior to

sharp decline in format

The wheel of retailing

Somerfield

Tesco

Aldi

Aldi: trading up phase?

Quality Food Awards 2012

Have you ever paid so little for such a lot?

Bigger

Brighter

Better stores

More exotic

merchandise

Types of shopping trips

ESSENTIAL

PURPOSIVE

EXPERIENTIAL

CONVENIENCE

EXPERIMENTAL

Replenishment, food,

Tesco

Major item, retail park,

Comet

Gift, Shopping mall,

Borders

Top up, ready meal,

Alldays, Co-op

Organic, fun, on-line,

farm shop

Characteristics of small store formats (based on Dawson and Burt)

FORMAT CUSTOMER NEEDS EXAMPLE

Discount Low prices Aldi, Lidl

Convenience Time saving Alldays, Shell

Specialist Choice Oddbins, TieRack

Style Design, originality Benetton, Bally

Branded Reputation, attachment Estee Lauder, YSL

Service Added value Mr Minit, Timpsons

Locality specific Impulse/emotion Tourist, National

Trust

Variability in retail concepts and

transactions (Based on Burt and Sparks)

Build transaction and information links Clubcard, personal finance

Grow infrastructure links Extra, Metro formats,

Tesco.com

Operational links for customers “Every little helps”, “One in

front”

Personal contact Service desks, service

areas

Expertise links Baby club, wine club, 0800

Emotional links Computers for schools, low

brand prices, healthy eating

Financial links Personal finance products

Availability links Direct, clothing catalogue,

specialist magazines

Retail trends

Increase in large food and non-food superstores

New retail centres

Growth of sales and floor space

Extension of product ranges in superstores

Large retailers taking control of supply chain

Sophisticated technologies

Greater awareness of retailer activity

Bricks, bricks and clicks, clicks only

Shift in balance of power (McGoldrick

2000)

“Of the top 25 European retail brands 60% offer private label brands that

contribute between 30% and 100% of revenues” Interbrand (2009)

Retailing challenges

Over supply of retail floor space

Turbulence in retail environment

Brand and brand extensions

Hyper-competition

Discounting

E-tail (growth/share/profitability). Do you have

to be on-line to survive?

Ownership (private/public)

Week 1: summary

Marketing is central to integrating the retailing

effort

Understand the value equation for different

segments of shoppers

Understand what benefits customers seek

from their shopping trip

Build lasting relationships with customers on

different transactional levels


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