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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 Todays 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 isnt 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 retailers 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

    http://www.aldi-stores.co.uk/uk/html/product_range/2867_4550.htmhttp://www.aldi-stores.co.uk/uk/html/product_range/2867_4552.htm

  • 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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