Retail Institutions by Store-Based            Strategy Mix
Retailer Strategy Mix      • A strategy mix is the firm’s particular        combination of:         store location,      ...
Earning Destination Retailer Status       Be price oriented and cost efficient       Be upscale       Be convenient    ...
Figure 5.1 The Wheel of Retailing5-4
Three Basic Strategic Positions               Low end               Medium               High end5-5
Figure 5.2 Retail      Strategy Alternatives5-6
Figure 5.3 Scrambled Merchandising                          by a Shoe Store5-7
Retail Life Cycle      • Retail institutions pass through        identifiable life stages         introduction         g...
Figure 5.4 Retail Life Cycle5-9
How Retail Institutions are Evolving        Mergers, Diversification, Downsizing        Cost-Containment and Value-Drive...
Mergers, Diversification, and                                   Downsizing        Mergers: combination of separately owne...
Methods for Cost Containment        Standardizing procedures, store layouts,         store size, and product offerings   ...
Table 5.1 Store-Based Retail                            Strategy Mixes       Food Oriented          General Merchandise   ...
Convenience Store Strategy Mix                              Prices:           Location:                            Average...
Conventional Supermarket                              Strategy Mix              Location:                   Prices:       ...
Food-Based Superstore                               Strategy Mix              Location:                                   ...
Combination Store                                   Strategy Mix             Location:                                    ...
Box Store Strategy Mix              Location:                Prices:            Neighborhood              Very low        ...
Warehouse Store Strategy Mix             Location:                                      Prices:       Secondary site, ofte...
Specialty Store Strategy Mix             Location:               Prices:         Business district or     Competitive to  ...
Traditional Department Store                              Strategy Mix               Location:                   Prices:  ...
Full-line Discount Store Strategy                                     Mix               Location:                         ...
Variety Store Strategy Mix               Location:                                           Prices:       Business distri...
Off-Price Chain Strategy Mix               Location:                                            Prices:       Business dis...
Factory Outlet Strategy Mix           Location:                                   Prices:       Out of the way site       ...
Membership Club Strategy Mix            Location:                                  Prices:        Isolated store or       ...
Flea Market Strategy Mix            Location:              Prices:          Isolated store          Very Low          Merc...
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Calssification by retail strategy mix

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Calssification by retail strategy mix

  1. 1. Retail Institutions by Store-Based Strategy Mix
  2. 2. Retailer Strategy Mix • A strategy mix is the firm’s particular combination of: store location, operating procedures, goods/services offered, pricing tactics, store atmosphere, customer services, and promotional methods5-2
  3. 3. Earning Destination Retailer Status  Be price oriented and cost efficient  Be upscale  Be convenient  Offer a dominant assortment  Offer superior customer service  Be innovative or exclusive5-3
  4. 4. Figure 5.1 The Wheel of Retailing5-4
  5. 5. Three Basic Strategic Positions Low end Medium High end5-5
  6. 6. Figure 5.2 Retail Strategy Alternatives5-6
  7. 7. Figure 5.3 Scrambled Merchandising by a Shoe Store5-7
  8. 8. Retail Life Cycle • Retail institutions pass through identifiable life stages introduction growth maturity decline5-8
  9. 9. Figure 5.4 Retail Life Cycle5-9
  10. 10. How Retail Institutions are Evolving  Mergers, Diversification, Downsizing  Cost-Containment and Value-Driven Retailing5-10
  11. 11. Mergers, Diversification, and Downsizing  Mergers: combination of separately owned firms.  Diversification: retailers become active in businesses outside their normal operations.  Downsizing: unprofitable stores are closed or divisions are sold off.5-11
  12. 12. Methods for Cost Containment  Standardizing procedures, store layouts, store size, and product offerings  Using secondary locations  Placing stores in smaller communities  Using inexpensive construction materials  Using plainer fixtures and displays  Buying refurbished equipment  Joining cooperative buying and advertising  Creatively financing inventories5-12
  13. 13. Table 5.1 Store-Based Retail Strategy Mixes Food Oriented General Merchandise  Convenience store  Specialty store  Conventional  Traditional department supermarket  Full-line discount store  Food-based superstore  Variety store  Combination store  Off-price chain  Box (limited-line)  Factory outlet store  Membership club  Warehouse store  Flea market5-13
  14. 14. Convenience Store Strategy Mix Prices: Location: Average to Neighborhood Above average Atmosphere and Merchandise: Services: Medium width Average and low depth of assortment; Promotion: average quality Moderate5-14
  15. 15. Conventional Supermarket Strategy Mix Location: Prices: Neighborhood Competitive Merchandise: Atmosphere and Extensive width Services: and depth Average of assortment; Promotion: average quality; Heavy use of manufacturer, newspapers, flyers, private, and generic brands and coupons5-15
  16. 16. Food-Based Superstore Strategy Mix Location: Prices: Community shopping Competitive center or isolated site Atmosphere and Services: Merchandise: Average Full assortment plus health and beauty aids and Promotion: general merchandise Heavy use of newspapers, flyers5-16
  17. 17. Combination Store Strategy Mix Location: Prices: Community shopping center Competitive or isolated site Atmosphere and Services: Merchandise: Average Full assortment plus health and beauty aids and Promotion: general merchandise Heavy use of newspapers, flyers5-17
  18. 18. Box Store Strategy Mix Location: Prices: Neighborhood Very low Atmosphere and Merchandise: Services: Low width and depth of Low assortment; few perishables; few national Promotion: brands Little or none5-18
  19. 19. Warehouse Store Strategy Mix Location: Prices: Secondary site, often in Very low industrial area Atmosphere and Merchandise: Services: Moderate width and Low low depth of assortment; emphasis on manufacturer brands Promotion: bought at discount Little or none5-19
  20. 20. Specialty Store Strategy Mix Location: Prices: Business district or Competitive to shopping center Above average Atmosphere and Merchandise: Services: Very narrow width and Average to excellent extensive depth of assortment; average to Promotion: good quality Heavy use of displays Extensive sales force5-20
  21. 21. Traditional Department Store Strategy Mix Location: Prices: Business district, shopping Average to center or isolated store Above average Atmosphere and Merchandise: Services: Extensive width and Good to excellent depth of Promotion: assortment; average to Heavy ad and catalog good quality use; direct mail; personal selling5-21
  22. 22. Full-line Discount Store Strategy Mix Location: Prices: Business district, shopping Competitive center or isolated store Atmosphere/ Services: Merchandise: Slightly below Extensive width and average to average depth of assortment; average to Promotion: good quality Heavy on newspapers; price-oriented; selling5-22
  23. 23. Variety Store Strategy Mix Location: Prices: Business district, shopping Average center or isolated store Merchandise: Atmosphere/ Services: Good width and Below average some depth of assortment; below-average Promotion: to average quality Use of newspapers5-23
  24. 24. Off-Price Chain Strategy Mix Location: Prices: Business district, shopping Low center or isolated store Merchandise: Atmosphere/ Services: Moderate width and Below average poor depth of assortment; Promotion: average to good quality; Use of newspapers; low continuity brands not advertised; limited selling5-24
  25. 25. Factory Outlet Strategy Mix Location: Prices: Out of the way site Very Low or discount mall Atmosphere/ Services: Merchandise: Very low Moderate width and poor depth of assortment; Promotion: low continuity Little5-25
  26. 26. Membership Club Strategy Mix Location: Prices: Isolated store or Very Low secondary site Atmosphere/ Services: Merchandise: Very low Moderate width and poor depth of assortment; Promotion: low continuity Little; some direct mail5-26
  27. 27. Flea Market Strategy Mix Location: Prices: Isolated store Very Low Merchandise: Atmosphere/ Services: Extensive width and Very low poor depth of assortment; low continuity; Promotion: variable quality Limited5-27

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