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Retail Marketing

Retail Marketing. Lecturer: S. van Renssen. Literature. Introduction to Retailing, Lusch, Dunne, Carver ISBN 978-0-538-75507-8. Overview. Learning Objectives. Explain what retailing is. Describe trends in retailing Describe the five methods used to categorize retailers.

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Retail Marketing

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  1. Retail Marketing Lecturer: S. van Renssen

  2. Literature • Introduction to Retailing, Lusch, Dunne, Carver ISBN 978-0-538-75507-8

  3. Overview

  4. Learning Objectives • Explain what retailing is. • Describe trends in retailing • Describe the five methods used to categorize retailers. • Explain different methods for the study of retailing

  5. What is Retailing? • Retailing Consists of the final activity and steps needed to place a product in the hands of the consumer or to provide services to the consumer.

  6. Modern retailing • Retailer: Category Management • Manufacturer: Trade Marketing

  7. Distribution Diagram Your brand Competing brand Wholesaler Trade marketing Consumer marketing Retailer Retailmarketing Consumer

  8. Phases in the cooperation between manufacturerand retailer Retailer Manufacturer Push marketing Consumer marketing (pull) Retail marketing Trade marketing Professional cooperation

  9. Trends in retailing • Growth of E-tailing • Price competition • Internationalisation • Demographic shift • Store size increasing

  10. Categorizing Retailers • By industry or branch of activity (type of business) • Number of Outlets • Store Format (margin versus turnover) • Location • Size

  11. Classification by industry or branch of activity • The United Nations system (ISIC, rev.4). Classification is by industry or branch of activity (one digit), with further subdivision into classes (two digits) and sub-classes (three digits).

  12. Classification by Number of Outlets • Single independent store (mum-and-dad store) • Small chains (2-9 outlets) • Medium sized chains (10 – 50 outlets) • Large chains (50+ outlets) Retailers with several outlets are stronger because they can spread fixed costs

  13. Classification by Store Format • Discount stores • Convenience stores • Specialist stores • Style shops • Branded goods shops • Service shops • Locally specific shops • Non-store retailers • Supermarkets • Hypermarkets • Department stores

  14. Margins Versus Turnover • Gross Margin Is net sales minus the cost of goods sold. • Gross Margin Percentage Is the gross margin divided by net sales or what percent of each sales € is gross margin.

  15. Margins Versus Turnover • Operating Expenses Are the expenses the retailer incurs in running the business other than the cost of the merchandise. • Inventory Turnover Refers to the number of times per year, on average, that a retailer sells its inventory.

  16. Margin versus Turnover Margin Turnover

  17. Classification by Location • Free Standing Sites • City or Town Locations • Inner City • Main Street • Shopping Centers • Strip Shopping Centers • Shopping Malls • Other Location Opportunities

  18. Classification by Size • m2 Sales Area • Number of employees (f.t.e.) • Sales volume • Larger retailer have lower operating costs per sales € than smaller firms

  19. Assignment 1. • Go to www.careersinretailing.com • Pick any of the listed retailers. • As a manager for your selected retailer, compare your retailer’s web site to that of several other retailers. • What changes would you make to your web site? You want to use your web site to make individuals interested in working for your retail enterprise.

  20. A career in retailing • Hard Work • Analytical Skills • Creativity • Decisiveness • Flexibility • Initiative • Leadership • Organization • Risk Taking • Stress Tolerance • Perseverance • Enthusiasm

  21. The Study and Practice of Retailing (P. 32) Analytical Method Manager is finder and investigator of facts. Creative Method Manager is conceptual and very imaginative. Two-Pronged Method Manager who employs both approaches.

  22. Strategic Planning in Retail Mission statement Statement of goals and objectives Financial objectives Productivity objectives Societal objectives Personal objectives Strategies SWOT analysis

  23. Elements of a Mission Statement • How the retailer uses or intends to use its resources • How it expects to relate to the ever-changing environment • The kinds of values it intends to provide in order to serve the needs and wants of the consumer

  24. Components of Strategic Planning • Goals and Objectives are the performance results intended to be brought about through the execution of a strategy. • Market performance objectives • Financial performance objectives

  25. Market Performance Objectives • Sales Volume • Market Share (sales) • Market share (sales volume)

  26. Financial Performance Objectives • Net Profit Margin • Asset Turnover • Return on Assets • Financial Leverage • Return on Net Worth

  27. Strategic Profit Model Net Profit Margin Net Profit*  Total Sales Return on Assets Financial Leverage Return on Net Worth x = x = Net Profit*  Total Assets Total Assets  Net Worth Net Profit*  Net Worth Asset Turnover Total Sales  Total Assets *Net profit after taxes

  28. Retail Objectives Sales Volume Profitability Market Share Financial Performance Objectives Productivity Market Performance Objectives Retail Mission Employment Personal Objectives Societal Objectives Self- Gratification Taxes Power and Authority Consumer Choice Equity Status and Respect Benefactor

  29. Strategy • Strategy Is a carefully designed plan for achieving the retailer’s goals and objectives.

  30. Retail Strategies • Get shoppers into your store. • Convert these consumers into customers by having them purchase merchandise. • Do this at the lowest operating cost possible that is consistent with the level of service that your customers expect.

  31. Environmental analysis • SWOT Analysis Is the identification and analysis of a retailer’s strengths and weaknesses and the opportunities and threats the firm faces.

  32. Strategy • Retail mix Is the combination of merchandise, assortment, price, promotion, customer service, and store layout that best serves the segments targeted by the retailer. • Brand mix Is the combination of brands (manufacturer brands, retailer brands) of the retailer.

  33. Retail Strategic Planning and Operations Management Model Competitive Environment: Behavior of Consumers, Competition and Channel Members Strategic Planning SWOT Strengths Weaknesses Opportunities Threats Goals and Objectives Mission Social and Legal Environment: Socioeconomic Environment, State of Technology, Legal System, Ethical Behavior

  34. Retail Strategic Planning and Operations Management Model Competitive Environment: Behavior of Consumers, Competition and Channel Members Retail Marketing Strategy Target Market(s) Location(s) Retail Mix Brand mix Merchandise Pricing Advertising & Promotion Customer Service & Selling Store Layout & Design Operations Management Buying & Handling Merchandise Pricing Advertising & Promotion Customer Services & Selling Facilities High-Profit Performance Retailing Social and Legal Environment: Socioeconomic Environment, State of Technology, Legal System, Ethical Behavior

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