Retail Strategy On Retail Strategies Presenatation

Subject: Retail Management Name: Dinakar Upadhyay Roll No:55 MMS (Marketing) Saraswati College of Engineering

RETAIL STRATEGY
RETAIL STRATEGY
A clear and definite plan outlined by the retailer to tap the market
A plan to build a long-term relationship with the consumers
Process of strategy formulation in retail is the same as that for any other industry
It starts with the retailer defining or stating the mission for the organization
The mission is at the core of the existence of the retailer
Other aspects of the strategy may change over a period of time or vary for different markets

RETAIL STRATEGY
Establish Mission
Analyze Situation Objectives
Identify Options
Set Objectives
Obtain & Allocate Resources
Develop Implementation Plan
Monitor Progress & Control

RETAIL STRATEGY
DEFINE MISSION OR PURPOSE
Mission statement is a long term purpose of the organization
It describes what the retailer wishes to accomplish in the markets in which he chooses to operate
Retailers mission statement would normally highlight the following
The products and services that will be offered
The customers who will be served
The geographic areas that the organization chooses to operate in
The manner in which he firm intends to compete

RETAIL STRATEGY
CONDUCT A SITUATION ANALYSIS
Once the retail mission is defined, the retail organization needs to look inwards
Understand what its strengths and weaknesses are
Look outwards to analyze its opportunities and threats
Situation analysis helps the retailer determine his position and his strengths and weaknesses
Helps formulate a clear picture of the advantages and opportunities which can be exploited
The weaknesses need to be worked upon
This forms the basis or the core element of any strategy

RETAIL STRATEGY
IDENTIFY OPTIONS / STRATEGIC ALTERNATIVES
After determining the strengths and weaknesses vis-à-vis one environment retailer needs to consider various alternatives available to tap a particular market
Igor Ansoff presented a matrix which looked at growth opportunities
He focused on firm’s present and potential products in the existing and new markets
Ansoff’s matrix also helps to understand the options available to a retailer

RETAIL STRATEGY
IDENTIFY OPTIONS / STRATEGIC ALTERNATIVES
The alternatives available to a retailer are :
Market Penetration
Market Development
Retail Format Development
Diversification

RETAIL STRATEGY

RETAIL STRATEGY
MARKET PENETRATION
Strategy may focus either on:
- Increasing the number of customers
- Increasing the quantity purchased by customers(basket
size)
- Increasing the frequency of purchase
Increasing the number of customers can be achieved by adding new stores and by modifying the product mix
Another approach is to encourage salespeople to cross sell
Market penetration strategy is the least risky one, since it controls many of the firm’s resources and capabilities
However, market penetration has limits
Once the market approaches saturation, a new strategy needs to be pursued if the firm is to continue growth

RETAIL STRATEGY
MARKET EXPANSION / DEVELOPMENT
When a retailer is said to reach out to new market segments or
completely changes his customer base
This strategy involves :
- Tapping new geographical markets
- Introducing new products to the existing range that appeal to a
wider audience
Expansion by adding new retail stores to existing network is an example of geographical expansion
Introducing a pharmacy in a supermarket (eg. The medicine Shoppe at the Haiko Supermarket in Mumbai) is an example of a retailer introducing new products, appealing to a different audience
Another example is McDonald’s who introduced ice creams for Rs.7
This not only created add on sales, but also brought in customers who had the perception that McDonald’s is an expensive fast food restaurant

RETAIL STRATEGY
RETAIL FORMAT DEVELOPMENT
When a retailer is said to introduce new retail format to customers
Example fast food retailers like McDonald’s and Subway offer limited menus inside large department stores
Another example is bookstore chain Crosswords, opening smaller format stores by the name Crossword Corner at Shopper’s Stop
Strategy may be appropriate if the retailer’s strengths are related to specific customers, rather than to specific products
In this situation retailer can leverage its strengths by developing a new product targeted to his existing customers

RETAIL STRATEGY
SET OBJECTIVES
Translation of mission statement into operational terms
Indicate
Results to be achieved
Give direction to and set standards for the measurement of performance
Management sets both long term and short term objectives
One or two year time frames for achieving specific targets are short term objectives
Long term objectives are less specific and reflect the strategic dimension of the firm
Two important focus areas of retailers - Market Performance
- Financial Performance
Objectives are set keeping these focus areas in mind
Sales volume targets
Market hare targets
Profitability targets
Liquidity targets
Returns on investment targets

RETAIL STRATEGY
OBTAIN AND ALLOCATE RESOURCES NEEDED TO COMPETE
Resources needed by a retailer - Human Resources
- Financial Resources
1. Human Resource
HR plan must be consistent with overall strategy of the organization
HR management focuses on issues such as recruiting, selecting, training,
compensating, and motivating personnel
These activities must be managed effectively and efficiently
2. Financial Resources
Takes care of the monetary aspects of business
Shop rent, salaries and payments for merchandise

RETAIL STRATEGY
DEVELOP THE STRATEGIC PLAN
At this stage strategy is determined through which retailer will achieve objectives
The retailer determines and defines his target market
The retailer finalizes the retail mix that will serve the audience
Target Market – that segment of consumer market that the retail orgn.decides to serve
No definite process of deciding and selecting the target market
Most retailers look at the entire market in terms of both size and consumer segments to
which it might appeal
From these segments he identifies smaller number of segments that appear promising
These become possible targets
Variables like growth potential, investment needed to compete, the strength of competition, etc are evaluated.
This enables the retailer to arrive at the best alternative that is most compatible with the organizations resources and skills

RETAIL STRATEGY
Considerations for successful market segmentation
Measurable : The segment should be measurable and identifiable?
Accessible : Focusing market marketing efforts on a particular market segment should have a positive impact towards bringing out the desired response
Economically viable : The expense and efforts of focusing the marketing efforts in potential segments should be justified.
Stable : The consumer characteristics are indicators of market potential. Hence stable indicators to be considered.

RETAIL STRATEGY
After choosing the target market the retail mix needs to be developed
This process involves
the determination of the merchandise mix
the pricing policy
types of location the retail stores would be located at -
services to be offered -
communication platform that would be adopted by the retailer
Next is the formulation of positioning strategy. This refers to
the image the retailer wants the customers to have in their minds about
the products and services

RETAIL STRATEGY
IMPLEMENT THE STRATEGY, EVALUATE AND CONTROL
Implementation is the key to success of any strategy
Effective implementation of the retailers desired positioning requires
Every aspect of stores to be focused on the target market
Merchandising must be single-minded
Displays must appeal to target market
Advertising must talk to the target market
Personnel must have empathy for the target market
Customer service must be designed with the target customer in mind

RETAIL STRATEGY
IMPLEMENT THE STRATEGY, EVALUATE AND CONTROL
After implementation the management needs feedback and should focus on
Performance
Effectiveness of long term strategy by periodic evaluation
Ensuring that the plans do not degenerate into fragmented ad-hoc efforts
Ensuring that all efforts are in harmony with he overall competitive strategy of business
Management can also use the process to decide on
Any future policy change
Modifications if any, in the plan, to ensure that the combination of the retailing mix variables support the firms strategy

Retail Strategy On Retail Strategies Presenatation

by dinkar13 on Oct 25, 2009

Accessibility

Categories

Upload Details

Usage Rights

2 Embeds 52

Statistics

Retail Strategy On Retail Strategies Presenatation — Presentation Transcript

http://www.slideshare.net	51
http://translate.googleusercontent.com	1