This presentation educates the audience about Strategic Retail Management. This presentation is intended for educational purposes. The examples used are also for educational purpose. If any person or organization has any issues pertaining to same, please inform me, I will alter the same.
social pharmacy d-pharm 1st year by Pragati K. Mahajan
Strategic Retail Management - 2012
1.
2.
3.
4. Classification of Retail
Based on Ownership
INDEPENDENT CHAINS FRANCHISE COOPERATIVE LEASED
Based on Strategy
General Department Discount Stores Specialty Store Off Price
Merchandise Stores Category Killers Retailers
5. Formats in Food Retailing
Types Conventional Superstore Hyper Market Convenience Store Hard Discounter
Parameters
Supermarket
Size (sq. m) 400- 1,000 1,000-5,000 5,000-30,000 200-400 500-1,500
Merchandise extensive width full assortment of full selection of medium width medium width
and depth of supermarket supermarket and and low depth of and low depth,
assortment; items, plus drugstore items, assortment, heavy use of
average quality; health and and general average quality store brands
manufacturer beauty aids and merchandise; (up to 90 %)
and store brands general extensive width,
merchandise and depth
SKUs 20,000-30,000 30,000-40,000 40,000-150,000 1,000-3,000 700-1,500
Percentage foods 75 - 90% 60- 80% 60- 70 % 90% 80-90 %
Prices average/ competitive competitive average to above very low
competitive average/high
Atmosphere & Services average/ average average average low
good
Locations city or community shopping community shopping city or neighbourhood
neighbourhood centre centre neighbourhood or or traffic -
or isolated sites or isolated sites highly frquented oriented
sites
Promotions use of heavy use of heavy use of little to moderate heavy use of
newspapers, newspapers, newspapers, newspapers &
flyers, coupons flyers, coupons flyers, coupons flyers
6. The Wheel of Retailing
Mature Retailer Innovation Retailer
• top heaviness • low status
• conservatism
Vulnerability
Phase
Entry Phase
• low price
• declining ROI • minimal service
• poor facilities
• limited product offering
Trading –UP Phase
The Retail Life cycle
Traditional Retailer
• elaborate facilities • fashion-orientation
• expectation of both • higher prices
• essential and • extended product
• exotic services • offerings
• higher-rent locations
II • Introduction Stage
II • Development Stage
III • Growth Stage
IV • Maturity Stage
V • Decline Stage
7. B2B Retailing Format
“Big Box Strategy Mix”
• HoReCa (On –Premise) Businesses • Area covered : 9,000 to
Customers • Corporates & SMEs 30,000 sq.m.
• Educational Institutions • SKUs : 50,000 – 60,000
• Self- Employed Professionals • Food percentage: 60-70 %
• Traders & Resellers • Prices: Low price strategy.
• Wholesalers & Distributors • Atmosphere & service :
• Supermarkets & Pharmacies average, WH look & feel
• Fresh Meat & Poultry + Groceries • Location : isolated sites
Categories • Gourmet • Promotion : aggressive low
• DIY & Home Improvement price strategy, mailers,
• Healthcare & wellness coupons., loyalty programs
• Technology World
• Electronics & Appliances
• Apparel & Footwear
• Office & Stationery
• Uncompromising customer focus
• Professional service
• High-quality, diverse range
• Large selection of fresh products
• High availability of goods
• Low prices
• Clear organisation and cleanliness
• Quick processing at check-out
• Good accessibility
• Convenient opening hours
8. Non Store Formats in Food Retailing
Traditional Non-Store formats
For Fresh merchandise e.g. farm produce, bakery products,
meat / fish , the use of market stands or truck and vans
Vending Machine
Kiosks or VM provide customers with product displays and
information on the merchandise or electronic systems track
inventory and cash, thus reducing out –of-stocks or
malfunctions.
Remote Ordering
RO Channels such as internet Shops, traditional catalogues
or TV shopping are gaining importance , in the scenarios
where dominant share of food retailing is generated by store
formats.
Direct Selling
Sales persons contact customers directly at a convenient
location(at home or work or via phone etc.) , they
demonstrate the product or provide them with information
or services. Eg. Party selling , MLM
9. New Competitors-Vertical Strategies
Suppliers becoming Competitors for their Customers !
Controlled Distribution
Secured Distribution System
System
Direct Selling Dealer Partnership Program
Electronic Selling Franchise Systems
Equity Stores
Strengths Weaknesses
Equities • High degree of Control • High capital costs
• Organizational control • Huge operational costs
• Brand/Promo control
Advantages & • Guaranteed distribution
Disadvantages
of Secured &
Controlled Franchising • Limited capital costs • Limited Control
Distribution • Less ownership risk
Concepts • Guaranteed distribution
• Low fluctuation
Dealer Partnerships • Low cost solution • Little control
• Rapid expansion • High risk of losing
partners
• Less stability
10. Direct Selling Electronic Selling Equity Stores
Factory Outlet
Flagship Store
Specialty Store
Multi Channel Distribution Dealer Partnership Program Franchise System
Independent
Retailers
Flagship Store
Factory Outlet
www.pumashop.in
Ecommerce portal
11. Controlled and Secured Distribution
Verticals
• Verticals perform all production and distribution
functions themselves.
• Successful for both Brick N Mortar formats & E-
Controlled Stores.
Secured
Distribution • Brands like Zara, Mango are successful e.g. in
Distribution
apparel industry. From Sheep to Shelf.
• Advantage lies in controlling total value chain ,
SCM and understanding consumer behavior
Retail
Equity quickly.
Partnership Franchising
Concept • Secured Distribution used to develop equity
chains .
• Now manufacturer can sell directly to consumers
without Brick N Mortar stores over the internet &
through Dealer Partnership programs and
Indirect and Direct/Secured Franchising.
Distribution at Esprit • Main challenge is to manage the potential conflict
between independent retailers, selling products
from a particular manufacturer, and retailers ,
cooperating in a contractual system with this
manufacturer on the one hand, and equity stores
from this manufacturer as competitors on the
other hand. As “pure players”, verticals are in much
better position – they do not compete with their
customers.
12. Growth Strategies
Growth Options
Products • With present products & in present markets , growth
Present New can be achieved by Market Penetration.
• Product Development is characterized by offering new
Market Product products to existing customers.
Present
Penetration Development
• Market Development is when a current product offer
is targeted to a new customer segment, often in a new
Market Ansoff’s
geographic area.
Matrix
New
• Diversification entails offering new products to new
Market markets.
Diversification
Development • Withdrawal from Markets is closing down or divesting
(selling –off) the unprofitable parts of business .
• Organic Growth (Internal Growth) is primary method for
expansion.
Outlet Growth Options • Joint Ventures is when parties agree to contribute equity
and share the revenue, expenses & control of enterprise.
• Franchising is a contractual agreement between two
legally and financially separate companies.
Organic Mergers & • M&A involves the consolidation or purchasing of existing
Franchising
Growth Acquisitions retail companies or retail outlets.
13. Internationalization of Retailing
Internationalization of
Benefits of Integration
Standardization Adaptation
Global Glocal
Some products Some products
International are global need some Hi Orientation Orientation
Retailing
products, changes in the
Retail Sourcing meaning they product or
can be sold in promotion
Cross – Border foreign markets strategy to fit
Retailing with virtually no new markets. Domestic Multinational
adaptation.
Lo Market Orientation
Orientation
Lo Hi Low responsiveness
Non- standardized
Strategic Sequencing of Market Entry
Glocal Multinational Entry & Operating Strategy Export
Orientation Orientation
Assortment
Licensing
Global/ Franchising
standardized
Domestic
Market
Orientation Joint Venture
standardized Non- standardized
Format
14. Retail Branding & Positioning
• Retail Branding – A retailer’s products are his stores; hence Retail Measurement of Brand Equity
Brand is then a group of retailer’s outlets that carry a unique name Monetary Brand Consumer Oriented
Equity Brand Equity
or logo or both.
• Indicators of Consumer Oriented retail brand equity are Brand •Additional Cash flow
achieved by
•When consumers
react favorably to an
Awareness, Trustworthiness of the Brand, Customer associating a brand element of marketing
with product or mix.
Satisfaction/Loyalty, Brand Liking & Differentiation. service. •Eg. Macy’s (in US) &
• Positioning is deliberate defining and influencing customer’s •Eg. The Gap (8.2 Bi Big Bazaar /Food
perception of marketable object, with strong focus on USD), Zara (3.7 Bi Bazaar are among the
USD) most recognized and
competitiveness. likeable brands.
• Positioning depends upon Quality of merchandise, variety of
merchandise, convenience, price, customer service, location & store
atmosphere.
Branding Strategies at Different Retail Companies
Brand Strategy Retail Company Retail Brands of the Company
Café Coffee Day Café, Lounge, Express Principles of Successful Retail Branding
Pizza Hut Dining, Express, PHD
Umbrella Brand Spencer's Deli, Super Market, Hyper Market Differentiation from Competitors
Tesco Tesco Extra, Tesco (Super Markets), Tesco Express
Pantaloons, Central, Brand Factory, Home Town, Ezone, Long-term marketing Continuity
Future Group Planet Sports
Big Bazaar, KB's Fair Price, Food Bazaar, FutureBazaar.com Coherence of different marketing components
Family Brand
Trends, Footprints, Mart, Fresh,Digital, Jewels,Subhiksha
Reliance Retail ,Autozone,Time Out & Brands (Diesel, Paul&Shark,
Steve Madden,Hamleys, Thomas Pink etc.)
Rocket Internet Jabong.com, Rock.in, Bamarang, Food Panda, 21Diamonds
Mixed Strategy Smile Group Dealsand you, Fashionandyou, Juvalia&you
Metro Metro Cashn Carry,Real, Media-Markt, Saturn, Kaufhof
15. Marketing Mix in Retail - I
Store Location – Trade Area & Analysis Location Assessment Techniques
Location Evaluation Checklists
Importance of Location
• A good location can lead to competitive
advantage.
• Element of Marketing mix which is unique
& cannot be imitated.
• Long term decision implies long term
capital commitment.
• Fixed nature, hence cannot be changed in
short term like prices, customer service,
product assortment or advertising.
16. Marketing Mix in Retail - II
Merchandise & Category Management Depth of
Assortment Specialty Stores Department Stores
Merchandise Mix Staple
Merchandise
Fashion
Deep
Merchandise
Seasonal
Merchandise Convenience Stores Discounters
Fad Merchandise
Shallow
Narrow Wide Breadth of Assortment
Category
Definition
Category
Category Review Category Rule Strategies
• Traffic
Manufacturer / National Brand
Store Brands / Private Labels
•Opportunity for
•Pull Effect Enhance differentiation ,
customer frequency in available at retailer Increasing
stores. only
•If a customer is Category • Transaction
•Image Transfer , A
retailer image can be satisfied with private Plan Management Category Building
improved when it is label, then he will Implementation Assessment
associated with the revisit the store to buy Process • Profit
it again.
manufacturer’s brands
that are evaluated •Price competition is
Generating
positively. less severe , lower • Image
procurement or
production & Performance
Creating
marketing cost Category Tactics
Measures
Category
Strategies
17. Marketing Mix in Retail - III
Pricing Strategy
Cost Oriented • Price positioning is a retailer’s price image in relation to his competitors
Pricing
& is determined by the positioning of company.
Competition • W.r.t price structure , the differentiation is made between value(budget)
Pricing
Oriented Pricing price segment, medium(standard) price segment and a premium price
segment.
Demand
Oriented Pricing • Price Differentiation occurs due to loyalty programs etc , also depending
on target customer (for eg. Senior citizens)
• Temporary Price Reductions happen through Promotion Packs, BOGOFs
(Buy One Get One Free), Multipacks, Coupons & Store Wide reductions.
Psychological Pricing
Price –Quality relationship – Consumers some times evaluate product’s
HiLo v/s EDLP quality based on the price, reason being consumers at times lack knowledge
& information to judge the merchandising quality accurately.
Price Communication - A red or yellow color of price sticker, large price
HiLo (High Low )
Retailers have high regular Retailers offer consistently signs, crossed out “old” prices, comparison with recommended retail price
prices, but they advertise low prices, thus enhancing
by the manufacturers , and many other communicative measures can lead
EDLP (Every Day Low Price )
their products & draw trust in retailer. Higher
customers through
temporary price
transparency, smooth &
decreased operations
to a perception of lower prices.
reductions. Reduced price costs, reduced out of
credibility & change in stocks&
reference prices.
18. Marketing Mix in Retail - IV
In store Easy internal orientation , In Store Marketing
Marketing facilitate search process
• Visual Merchandising – Refers to the arrangement of
products (presentation & aesthetic appeal) in the store.
Create positive store • Shopping process is differentiated through motives -Task
atmosphere, emotional mind Completion and Recreational Shopping.
of customers • Store Atmosphere comprises of visual elements (color,
brightness etc.), aural elements ( music, audio advert. ),
olfactory elements ( perfumes ), tactile (materials on floor,
touching), gustatory elements (food samples, coffee
served in book store)
• Highly valuable store areas – entrance area , ground level
space, end caps of gondolas, feature / special displays,
check out area, eye level shelves..
19. Marketing Mix in Retail - V
Customer Relationship Management
Relative
Customer Individualization/ Attitude
Information segmentation Latent Loyalty (True)
high Loyalty
CRM
No Loyalty Spurious
low Loyalty
Customer
Profit Orientation Interaction and
Integration
low high Repeat Patronage
• Segmentation is done on three parameters : Value based,
Customer based & Consumer behavior based.
• CRM takes place through marketing communication by Customer Relationship Lifecycle
Addressed direct mailings, E-Mail Marketing, Instore
Multimedia Kiosks, Mobile Marketing, Personal Shopping
Assitants.
• A higher level of CRM can be employed through Internet
marketing using Web Analytics, Web usage mining,
SEO&SEM , Social Media Marketing.
20. Buying – Strategy & Concepts
A Merchandise Philosophy must reflect Target
Market desires, retailer’s institutional type, market Sourcing Tool Box
place positioning, defined value chain, supplier Source Company-Owned Outside Supplier
capabilities, costs, competitors, product trends. Interacting with
active passive
Merchandising Source
Transformation of the interface Supplier relationships transactional collaborative
between Manufacturer and Retailer Stocking Merchandise stock Stock reduced Stock less
Geographical market local/national international/global
Mode of Buying individual cooperative
Organisational Form internal external
electronic
Technological Form traditional
(web -based)
Mode of Buying and Organisational Form
Individual & Cooperative Buying – A group of
Retailers bundle their purchasing volumes to
obtain volume discounts from the suppliers.
Inside & Outside Buying Org. – A
Buyer & Key Account Manager Relationship
• KAM for • Buyer for • Buyer for
• Buyer for
Benetton ABC Benetton
ABC Buying Shopper’s Benetton
House • Buyer for Benetton • KAM for Stop
Jabong.com • KAM for
• KAM for
Raw Shopper’s Corporate
Jabong
Material Stop Sales
21. Logistics – Physical Distribution
Logistics Storage Facilities : ware houses, From Linear to Circular Logistics Systems
Mix Distribution centers, retail stores.
Inventory: Amount of stock to be
held for each product
Transportation : By ship, truck, rail
or plane – from factory to WH/ DC
and WH to Retail outlets
Recycling/Reuse : Reverse logistics
operations i.e. return of packaging Delivery of Online Orders Via E-Fulfillment Centre
material and handling products.
Consolidation of Supply Chain
Logistics Model for Store-Based
Picking of Online Orders
23. The Retail Life cycle
•Introduction •Sales and •Rapid growth •Market •Sales Volume
Development
Maturity
Growth
Introduction
Decline
of new format Profits are of sales & Saturation decline
•Alteration in low , but profit is seen. •Decline in •Profitability
at least one of growing. •Existing sales & profit diminish
the marketing •High Cost & Comp. expand growth •Either
mix. risk their market. •New & repositioning
•Diversion •Long term •New entrants Existing the retail is a
from the sustainability arrive in the competition solution or
strategy mix is not assured same format. gets tougher abandoning
•Towards the •Aim is to the existing
end , growth prevent format &
acceleration decline of introduction
begins to business & of a new
decline & cost maintain format
pressure profitability
emerges.
Notas do Editor
Technically, classification of Retailing is done by Govt. bodies like SIC (Standard Industrial Classification) & NAICS etc . which classifies the retailer through a two digit code (retail sector), then it is further divided into (retail business). Independent stores : A type of retailer that operates a single establishment. can work on improving merchandising, revive marketing practices, outstanding customer service, efficiency of business through IT , more manpower.Chain store: A retailer that operates more than one / multiple store. Economies of scale: economies of scale are the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit cost as the size of a facility and the usage levels of other inputs increase. Chains use IT ERP/CRM s/w to control theft, pilferage, inventory control, ordering & to monitor the sales & buying patterns of customers.Franchise: A contractual agreement between a Franchisor and a Franchisee that allows a franchisee to operate a retail establishment using the brand name & guidelines (working methods).Business Franchise: Like McDonalds , a lot of interaction happens between Franchisor & Franchisee. Franchisor provides all assistance like site selection, accounting, planning, training, marketing, product , machinery etc.Product Franchise: A situation in which Franchisee agree to sell the franchisor's products or services. Like Beer distributors, they avail the benefits of promos , schemes & discounts from companies & sell various brands.Trademark franchise: Franchisee acquires franchisor’s identity & uses the trademarks developed by franchisor. Like GM dealers sell Chevy & Pontiac both .. To use GM’s TM while selling its products.Coop : not so popular in India , however Cooperative stores are of 3 types: retail sponsored – when several retailers band together & start a store.Wholesale sponsored - when several wholesalers band together & start a store.Consumer coop – a retail establishment owned & operated by group of consumers.Leased deptt. Shop In Shop-small area in a deptt. Store is leased to a brand. Also leasing an area or retail space for an outlet like CCD. General Merchandise : retailer involved in general items , barring food & beverages.Department stores: a large retailer , carrying huge variety of products , organized into deptts. They offer better customer service than GM stores, each deptt. Acts as a mini store. Each deptt. Sales advisors & deptt. Managers to handle the over all functioning of one deptt. Not all deptt. Stores are part of retail chains. Discount stores: a deptt. Store that offers limited customer service & has merchandise priced below as compared to other stores.Specialty store: a store that carries a limited no. of products with in one or few lines of goods & services.Category killers : power retailer/ category specialist – offers a deep assortment of merchandise.Offprice retailers : a retailer that sells branded merchandise at 40~50% discount , merchandise can be distressed or over run.Close out retailers: sells broad assortment of merchandise purchased at close out stores.Flea market : a retail format in which many vendors sell used as well as new & distressed merchandise.
Wheel of retailingEntry phase - Retail innovators often appear as low price operators. Thus the cycle begins with retail institutions starting off with low prices & low service levels.Trading up – retailers wish to expand their business and attract more customers, enhance the quality and quality of merchandise handled, provide more services, and open outlets in more convenient locations. This leads to increase in operating costs and prices, thus offer opportunities for new competitors to enter market with low price strategies.Vulnerability phase – is characterized by an increase in competition in services of all kinds and by a convergence in terms of the marketing mix of retailers as they mature. They become vulnerable to new competitors that enter the market with low prices.
Customer card identifies you as an authorised “Member” customer. You cannot gain access to a Cash N Carry centre without your card.Cash & Carry operates on a Business to Business (B2B) model. That is why Customer Cards are only issued to customers who hold valid business licenses.VAT License , Weights & Scale License, Shops & Establishments License , Municipality License , Service Tax/Professional Tax LicenseOr any other valid business license issued the Government to do business.Warehousing arrangement / Stack up to reduce cluttering & increase revenue / sq.mGroup / Collective Packing (Packing of 5/ 10together,OEM packing , No frills)Cash n Carry – Pay thru cash & bring your own vehicle. Parking facility available.HACCP , IFS approved best quality products
Conclusion : The food retailing landscape has changed dramatically over the past few decades. Competition has increased, because of various factors like Mergers & Acquisitions & internationalization of retail companies.Even though non-store retail formats have developed, (because of growth in IT & communication tech.) ; still brick & mortar store formats remain the most important channels that have been developed & has gained market share. Discount oriented retail formats(Hyper markets) , small food based Hard discounters & Convenience stores are becoming increasingly popular.Category Migration is also observed very prominently, along with cross selling across categories (food & Non –food both).
Direct Selling : vertical marketing in which sales people contact customers directly in a convenient location, demonstrate merchandise benefit or explain service/products, take an order and deliver the product.Electronic Selling : Technological form of direct selling. The rapid diffusion of Internet access and usage has stimulated not only bricks and mortar retailers to create Internet shops, but also pure electronic retailers (pure players) have evolved, like Amazon.Equity Stores: Brick and Mortar Stores. Manufacturers from Apparel, Footwear, Jewelry, Sports Equipment, Home equipmentMonobrand Specialty stores: managed as retail chains, manufacturers have strong control & centralized decision making.Flagship stores : offer total production program in high quality presentation (lifestyle presentation) in top locations of large metros.Factory outlet : FOC are an opportunity to improve their revenues from irregulars, production over runs and merchandise returned by retailers. Merchandise is always sold at discounted price.Dealer Partnership programs : manufacturer offers limited offer package (mrktng, IT, training etc.) they run thru SiS, Corner concepts etc.Franchise System : manufacturer contributes thru every possible support (IT, CRM,Marketing, sales promotion, advert., financial support etc.)
Market penetration : Higher sales from existing markets can either be obtained by attracting current non-customers, who either do not buy products in the offered categories at all or who buy them from competitors. Loyalty of customers can be improved & value of their shopping baskets can be increased.Product development : This can be done by providing the existing customer base with new product categories in the existing stores. Eg. Apparel stores expanding into selling shoes. Here Product Development refers to introducing new retail formats in existing markets. Like store retailers offering their product in the internet or supermarket retailers opening convenience stores.Market Development : Regional retailers expanding their traditional store formats to other regions or national retailers expanding to new countries attempt to increase revenue for the company with this strategy.Diversification : it often leads retailers beyond traditional retail markets. like Tata’s – auto, chemicals, power, steel, IT, f&b, housing, finance, insurance etc.Growth strategies for retailers can take two basic forms :Enhancing sales in existing retail outletsEnhancing sales by enlarging the outlet networkOrganic Growth : Location decision, store layout, manpower every aspect is under control. Risk is limited as expansion is gradual. Financial resources, CAPEX is high, Gradual growth as due to zoning restrictions, planning permission, search of sites etc. Also loss in flexibility over time. For the same reason modern retail information systems allow combination of centralized decision making with a locally adapted marketing.JV : adv. Of combination of resources of two companies, with reduction of risk, larger the retail , it is more likely to expand on its own , afford the expenses & absorb the risk. Drawback is high coordination costs, complex management, low stability & control of strategy is not possible.Franchising : Unit franchising – Fsor grants Fsiee the right to engage in a single franchised business operated at a specified location. Master franchising – Fsor grants Master Fsiee a set territory, and within this territory, Master Fsiee can establish unit Franchises.M&A – Merger – 2 companies are combined& one of them loses its legal independence. Acquisition – a company acquires a majority interest in another or takes over certain assets (stores) of another company.
International Retail Sourcing : Stores are domestic , many retailers have been buying goods from foreign countries.Cross border retailing : internationalization of store operations.DMO: retail concept from home market is transferred to other countries.GBO : retail concept is not adapted to differences in local markets.MNO: retail concept of substantial adaptations or diverse formats/ concepts operating in heterogeneous markets.GLO: retail concept of moderate adaptation to heterogeneous markets. The retail company brings together economies of scale (efficiency) & and a concentration on country markets (effectiveness).Assortment v/s Format : GDMO- standardized formats & assortments. Standardized formats include location of stores & instore marketing.Standardization of Assortments include merchandising & category management.GLO – assortment & price /promotion are adapted to local conditions. MNO – means diff. formats (positioning, retail brands ) with diff. assortments & diff. price/promos policies in diff countries.
Advantages of retail brand – an existing retail brand strengthens brand awareness and differentiations , hence increases the effects of marketing.Strong brand simplifies the purchasing process as the decision making becomes easier. Strong Brand exerts halo effect , a positive general effect about the brand. Strong Brand avoids the prospect of cannibalization, as strong brand can facilitate franchise operations, brand extensions etc like Spencers hyper market & convenience stores or CCD coffee shop & Express retail.
Free Standing , Isolated sites – be positioned on roads or near other retailers or shopping centres. Eg large store formats in food and non food retailing or for convenience shops. Unplanned shopping areas – several outlets in close proximity to each other. 1) Central business districts (downtown areas in city) 2) secondary business districts in larger cities and main street or high street locations in smaller cities 3) Neighborhood districts 4) strip or string locations (along a street or motorway)Planned Shopping Districts/ Shopping Centres – Retail parks
Merchandise Mix or Product Range – a retailers total product offering.Merchandise Management – at strategic level it means, selecting the right item for the store & at operational level , it means products are available when customers want to purchase them.Staple – carried permanently by the retailer & have stable sales . Eg white shirt , blue jeans for an apparel retailerFashion – products that have cyclical sales as due to changing tastes and lifestyles. Apparels change every year .Seasonal – products that do not sell equally well over consecutive time periods. Skiing equipment, short pants etc.Fad – products that generate high sales for a short period of time. Eg. Ben10 or Pokemon accessories.Breadth/ width of assortment – no. of product lines the retailer offers. Generalists (wide) & Specialists (narrow). Customer finds most of the merchandise he wants “under one roof”.Depth – no. of SKUs in a particular category ( brands, colors, tastes, sizes). Deep gives customers a good choice within categories. Shallow focuses better on fast selling items in category.Specialty stores – specialist image, very good choice in categories; no one-stop shopping, more dependent on trendsConvenience stores – high inventory returns, aimed at specific target group ; no one-stop shopping, often low customer loyaltyDepartment stores – one stop shopping, broad target group; diffuse image, low inventory turns Discounters – high inventory turns, broad target group ; weak merchandise image, some disappointed customersCategory Def – to determine the products that make up the category & its segmentation from consumer’s perspective.Cat Rule – assign role for the category based on consumer, competitor, & retailer info.Cat Assesment – anlayze category, sub-category etc.. Review of detailed info.Perf. Measures – establish category’s perf. Measures and targets.Category strategies – develop marketing & product supply strategies Category tactics – determine optimum assortment pricing, shelf presentation & promotion tacticsPlan implementation – implement category business plan thru specific schedule & list of responsibilities.
Cost oriented – a fixed percentage (mark up) is added to the cost of products.Competition oriented – retailers identifies his main competitors & sets his price accordingly.Demand oriented- retailer bases his prices on consumer demand.
Instore marketing -
Latent Loyalty – like people have very positive attitude towards Bose speakers , but not able to buy from there.True Loyalty – most favourable position , repeated patronageSpurious Loyalty – repeated patronage is observed towards the retailer, but that is not because of positive attitude, may be because of lack of alternatives.
Buyer - is a person who purchases finished good , typically for resale, for a firm /govrnt/organization.Can also be termed as Purchase Manager or Merchandiser , depending upon industries they belong to. Buying & merchandising is a related function , usually Buyer & Merchandiser is same person , because merchandiser is the one decides about product line, range , quantity , quality on the basis of consumer behaviour , trends, market research & insights. Merchandiser tells the Buyer “What to Buy?”, “How Much?”, “When?” Buyer decides from “Where to buy?”,”At what Price?”, and also coordinates with the Quality teams for Quality Checks. Like GAP is a Buying House.. They buy merchandise from various other buying houses , manufactured as per GAP’s guidelines.KAM – is the SPOC for an account of Buying House … These functions are interchangeable.