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Chapter  3 Strategic Planning in Retailing RETAIL  MANAGEMENT: A STRATEGIC APPROACH,   9th Edition BERMAN   EVANS
Chapter Objectives <ul><li>To show the value of strategic planning for all types of retailers </li></ul><ul><li>To explain...
Chapter Objectives_2 <ul><li>To examine the individual controllable and uncontrollable elements of a retail strategy </li>...
Retail Strategy <ul><li>The overall plan or framework of action that guides a retailer </li></ul><ul><ul><li>One year in d...
Figure 3.1 Elements of a Retail Strategy
Benefits of Strategic Retail Planning <ul><li>Provides thorough analysis of the requirements for doing business for differ...
Benefits of Strategic Retail Planning_2 <ul><li>Offers an analysis of the legal, economic, and competitive environment </l...
Organizational Mission Retailer’s commitment  to a type of business and to a  distinctive role in the marketplace.
Figure 3.2 The Focused Organizational Mission of Frisch’s Restaurants
Ownership and Management Alternatives <ul><li>Sole proprietorship   is an unincorporated retail firm owned by one person <...
Figure 3.3 Checklist to Consider When Starting a New Business
Figure 3.4 Checklist for Purchasing an Existing Retail Business
Figure 3.5 Selected Kinds of Retail Goods and Service Establishments Durable Goods Stores: Automotive group Furniture and ...
Figure 3.5 Selected Kinds of Retail Goods and Service Establishments Service Establishments (Personal): Laundry and dry cl...
Figure 3.5 Selected Kinds of Retail Goods and Service Establishments Service Establishments (Repair): Automobile repair Ca...
Kroger’s Goals <ul><li>Increase its identical food store sales growth target </li></ul><ul><li>Reduce operating and admini...
Image and Positioning An  image  represents  how a given retailer is  perceived by consumers and others.
Positioning Approaches <ul><li>Mass merchandising  is a positioning approach whereby retailers offer a discount or value-o...
Figure 3.6 Niche Retailing by American Outpost
Figure 3.7 Selected Retail  Positioning Strategies
Target Market Selection <ul><li>Three techniques </li></ul><ul><ul><li>Mass marketing </li></ul></ul><ul><ul><li>Concentra...
Figure 3.8 Albertson’s: Keeping a Competitive Edge
Strategic Implications of Target Market Techniques <ul><li>Retailer’s location </li></ul><ul><li>Goods and service mix </l...
Figure 3.9 Developing an Overall Retail Strategy <ul><li>Controllable  </li></ul><ul><li>Variables: </li></ul><ul><li>Stor...
Figure 3.10 The Sheraton Safari Hotel
Table 3.4a Legal Environment and Retailing   <ul><li>Store Location </li></ul><ul><ul><li>zoning laws </li></ul></ul><ul><...
Table 3.4b Legal Environment and Retailing   <ul><li>Merchandise Management and Pricing </li></ul><ul><ul><li>trademarks <...
Table 3.4c Legal Environment and Retailing   <ul><li>Communicating with the Customer </li></ul><ul><ul><li>truth-in-advert...
Additional Concerns for  Global Retailing <ul><li>In addition to the strategic planning process: </li></ul><ul><ul><li>ass...
Factors Affecting the Success of a Global Retailing Strategy <ul><li>Timing </li></ul><ul><li>A balanced international pro...
Figure A3.1 Factors to Consider When Engaging in Global Retailing
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  1. 1. Chapter 3 Strategic Planning in Retailing RETAIL MANAGEMENT: A STRATEGIC APPROACH, 9th Edition BERMAN EVANS
  2. 2. Chapter Objectives <ul><li>To show the value of strategic planning for all types of retailers </li></ul><ul><li>To explain the steps in strategic planning for retailers: situation analysis, objectives, identification of consumers, overall strategy, specific activities, control, and feedback </li></ul>
  3. 3. Chapter Objectives_2 <ul><li>To examine the individual controllable and uncontrollable elements of a retail strategy </li></ul><ul><li>To present strategic planning as a series of integrated steps </li></ul>
  4. 4. Retail Strategy <ul><li>The overall plan or framework of action that guides a retailer </li></ul><ul><ul><li>One year in duration </li></ul></ul><ul><ul><li>Outlines mission, goals, consumer market, overall and specific activities, and control mechanisms </li></ul></ul>
  5. 5. Figure 3.1 Elements of a Retail Strategy
  6. 6. Benefits of Strategic Retail Planning <ul><li>Provides thorough analysis of the requirements for doing business for different types of retailers </li></ul><ul><li>Outlines retailer goals </li></ul><ul><li>Allows retailer to determine how to differentiate itself from competitors </li></ul><ul><li>Allows retailer to develop an offering that appeals to a group of customers </li></ul>
  7. 7. Benefits of Strategic Retail Planning_2 <ul><li>Offers an analysis of the legal, economic, and competitive environment </li></ul><ul><li>Provides for the coordination of the firm’s total efforts </li></ul><ul><li>Encourages the anticipation and avoidance of crises </li></ul>
  8. 8. Organizational Mission Retailer’s commitment to a type of business and to a distinctive role in the marketplace.
  9. 9. Figure 3.2 The Focused Organizational Mission of Frisch’s Restaurants
  10. 10. Ownership and Management Alternatives <ul><li>Sole proprietorship is an unincorporated retail firm owned by one person </li></ul><ul><li>A partnership is an unincorporated retail firm owned by two or more persons, each with a financial interest </li></ul><ul><li>A corporation is a retail firm that is formally incorporated under state law; it is a legal entity apart from its officers </li></ul>
  11. 11. Figure 3.3 Checklist to Consider When Starting a New Business
  12. 12. Figure 3.4 Checklist for Purchasing an Existing Retail Business
  13. 13. Figure 3.5 Selected Kinds of Retail Goods and Service Establishments Durable Goods Stores: Automotive group Furniture and appliances group Lumber, building, and hardware group Jewelry stores Nondurable Goods Stores: Apparel group Food group General merchandise group Gasoline service stations
  14. 14. Figure 3.5 Selected Kinds of Retail Goods and Service Establishments Service Establishments (Personal): Laundry and dry cleaning Beauty/barber shops Funeral services Health-care services Service Establishments (Amusement): Movie theaters Bowling alleys Dance halls Golf courses
  15. 15. Figure 3.5 Selected Kinds of Retail Goods and Service Establishments Service Establishments (Repair): Automobile repair Car washes Consumer electronics repair Appliance repairs Service Establishments (Hotel): Hotels Motels Trailer parks Camps
  16. 16. Kroger’s Goals <ul><li>Increase its identical food store sales growth target </li></ul><ul><li>Reduce operating and administrative costs by more than $500 million </li></ul><ul><li>Further leverage its size to achieve even greater economies of scale </li></ul><ul><li>Reinvest in its core business to increase sales and market share </li></ul>
  17. 17. Image and Positioning An image represents how a given retailer is perceived by consumers and others.
  18. 18. Positioning Approaches <ul><li>Mass merchandising is a positioning approach whereby retailers offer a discount or value-oriented image, a wide or deep merchandise selection, and large store facilities </li></ul><ul><li>Niche retailing occurs when retailers identify specific customer segments and deploy unique strategies to address the desires of those segments rather than the mass market </li></ul>
  19. 19. Figure 3.6 Niche Retailing by American Outpost
  20. 20. Figure 3.7 Selected Retail Positioning Strategies
  21. 21. Target Market Selection <ul><li>Three techniques </li></ul><ul><ul><li>Mass marketing </li></ul></ul><ul><ul><li>Concentrated marketing </li></ul></ul><ul><ul><li>Differentiated marketing </li></ul></ul>
  22. 22. Figure 3.8 Albertson’s: Keeping a Competitive Edge
  23. 23. Strategic Implications of Target Market Techniques <ul><li>Retailer’s location </li></ul><ul><li>Goods and service mix </li></ul><ul><li>Promotion efforts </li></ul><ul><li>Price orientation </li></ul><ul><li>Strategy </li></ul>
  24. 24. Figure 3.9 Developing an Overall Retail Strategy <ul><li>Controllable </li></ul><ul><li>Variables: </li></ul><ul><li>Store location </li></ul><ul><li>Managing business </li></ul><ul><li>Merchandise </li></ul><ul><li>management </li></ul><ul><li>and pricing </li></ul><ul><li>Communicating </li></ul><ul><li>with customer </li></ul><ul><li>Uncontrollable </li></ul><ul><li>Variables: </li></ul><ul><li>Consumers </li></ul><ul><li>Competition </li></ul><ul><li>Technology </li></ul><ul><li>Economic </li></ul><ul><li>conditions </li></ul><ul><li>Seasonality </li></ul><ul><li>Legal restrictions </li></ul>Retail Strategy
  25. 25. Figure 3.10 The Sheraton Safari Hotel
  26. 26. Table 3.4a Legal Environment and Retailing <ul><li>Store Location </li></ul><ul><ul><li>zoning laws </li></ul></ul><ul><ul><li>blue laws </li></ul></ul><ul><ul><li>environmental laws </li></ul></ul><ul><ul><li>direct selling laws </li></ul></ul><ul><ul><li>local ordinances </li></ul></ul><ul><ul><li>leases and mortgages </li></ul></ul><ul><li>Managing the Business </li></ul><ul><ul><li>licensing provisions </li></ul></ul><ul><ul><li>personnel laws </li></ul></ul><ul><ul><li>antitrust laws </li></ul></ul><ul><ul><li>franchise agreements </li></ul></ul><ul><ul><li>business taxes </li></ul></ul><ul><ul><li>recycling laws </li></ul></ul>
  27. 27. Table 3.4b Legal Environment and Retailing <ul><li>Merchandise Management and Pricing </li></ul><ul><ul><li>trademarks </li></ul></ul><ul><ul><li>merchandise restrictions </li></ul></ul><ul><ul><li>product liability laws and lemon laws </li></ul></ul><ul><ul><li>sales taxes </li></ul></ul><ul><ul><li>unit-pricing laws </li></ul></ul><ul><ul><li>collusion laws </li></ul></ul><ul><ul><li>sale prices </li></ul></ul><ul><ul><li>price discrimination laws </li></ul></ul>
  28. 28. Table 3.4c Legal Environment and Retailing <ul><li>Communicating with the Customer </li></ul><ul><ul><li>truth-in-advertising and selling laws </li></ul></ul><ul><ul><li>truth-in-credit laws </li></ul></ul><ul><ul><li>telemarketing laws </li></ul></ul><ul><ul><li>bait-and-switch laws </li></ul></ul><ul><ul><li>inventory laws </li></ul></ul><ul><ul><li>labeling laws </li></ul></ul><ul><ul><li>cooling-off laws </li></ul></ul>
  29. 29. Additional Concerns for Global Retailing <ul><li>In addition to the strategic planning process: </li></ul><ul><ul><li>assess your international potential </li></ul></ul><ul><ul><li>get expert advice and counseling </li></ul></ul><ul><ul><li>select your countries </li></ul></ul><ul><ul><li>develop, implement, and review an international retailing strategy </li></ul></ul>
  30. 30. Factors Affecting the Success of a Global Retailing Strategy <ul><li>Timing </li></ul><ul><li>A balanced international program </li></ul><ul><li>A growing middle class </li></ul><ul><li>Matching concept to market </li></ul><ul><li>Solo or partnering </li></ul><ul><li>Store location and facilities </li></ul><ul><li>Product selection </li></ul>
  31. 31. Figure A3.1 Factors to Consider When Engaging in Global Retailing
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