1-1Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

The PhilosophyRetailers can best address these questions by fully understanding and applying the basic principles of retailing, as well as the elements in a well-structured, systematic, and focused retail strategy.

1-2Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Customer Orientation

Coordinated Effort

Value-driven

Goal Orientation

RetailingConcept

RetailStrategy

1-3Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Retail Strategy

An overall plan for guiding a retail firm

Influences the firm’s business activities

Influences firm’s response to market forces

1-4Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Impulse Purchase

Popularityof

Stores

Retailer’sStrategy

Small Average

Sale

1-5Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Parts of Retail Management: A Strategic Approach

Building relationships and strategic planning Retailing institutions Consumer behavior and information gathering Elements of retailing strategy Integrating, analyzing, and improving retail

strategy

1-6Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Six Steps in Strategic Planning1. Define the type of business 2. Set long-run and short-run objectives3. Determine the customer market4. Devise an overall, long-run plan5. Implement an integrated strategy6. Evaluate and correct

1-7Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

“Expect More. Pay Less” at Target

1-8Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

“?” at Kipa

1-9Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Aspects of Target’s Strategy Growth objectives Appeal to a prime

market Distinctive image Focus Customer service Multiple points of

contact

Employee relations

Innovation Commitment to

technology Community

involvement Monitoring

performance

1-10Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Aspects of Kipa’s Strategy? __________________ __________________ __________________ __________________ __________________ __________________ __________________ __________________

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Building and Sustaining Relationships in Retailing

BERMANBERMAN EVANS EVANS

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RETAIL MANAGEMENT:A STRATEGICAPPROACH11th Edition11th Edition

BERMAN EVANS

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What is Value?The bottom line:

Consumers will demand “more for less” from the shopping experience

They will spend less time shopping They will split the commodity-shopping trip

from the value-added shopping trip

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What is Value? (cont.)Channel Channel

PerspectivePerspectiveValue is a series of

activities and processes (the “value chain”) that provide a certain value for the consumer.

Customer PerspectiveCustomer PerspectiveValue is a

perception that the shopper has of the value chain.

It is the view of all the benefits from a purchase versus the price paid.

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Retail Value ChainRepresents the total bundle of benefits

offered to consumers through a channel of distribution Store location and parking, retailer

ambience, customer service, brands/products carried, product quality, retailer’s in-stock position, shipping, prices, image, and other elements

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Potential Pitfalls to Avoid in Planning a Value-Oriented Retail Strategy

Planning value solely from a price perspectiveProviding value-enhanced services that

customers do not want or will not pay extra for

Competing in the wrong value/price segmentBelieving augmented elements alone create

value

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Best Buy Geek Squad

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Customer ServiceExpected Expected

customercustomer service is the service level that customers want to receive from any retailer such as basic employee courtesy.

Augmented Augmented customercustomer service includes the activities that enhance the shopping experience and give retailers a competitive advantage.

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Classifying Customer Services

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Starbucks: Name on Coffee

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Typical Customer Services

CreditDeliveryAlterations/

InstallationsPackaging/gift

wrappingComplaints/

Return handling

Gift certificatesTrial purchasesSpecial salesExtended store

hoursMail/phone orders?

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Miscellaneous Customer Services

Interior designersPersonal shoppersTicket outletsParkingWater fountainsPayphonesBaby strollers

RestroomsRestaurantsBabysittingFitting roomsBeauty salonsFur storageShopping bagsInformation

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Elements Contributing to Effective Channel Relationships

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Four Characteristics of Services Retailing

IntangibilityInseparabilityPerishabilityVariability

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Intangibility

• No patent protection possible• Difficult to display/communicate service benefits

• Service prices difficult to set• Quality judgment is subjective

• Some services involve performances/experiences

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InseparabilityInseparability

• Consumer may be involved in service production• Centralized mass production difficult

• Consumer loyalty may rest with employees

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Perishability

• Services cannot be inventoried• Effects of seasonality can be severe

• Planning employee schedules can be complex

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Variability

• Standardization and quality control hard to achieve• Services may be delivered in locations

beyond control of management• Customers may perceive variability even when it does not actually occur

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Consumer Perceptions of Service Retailing

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