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Chapter 5

Retail Institutions by Store-Based Strategy Mix. Chapter 5. Objectives. Describe Wheel of Retailing Scrambled Merchandising Retail Life Cycle Discuss Retail Strategy Evolution Examine Store-Based Retail Strategies Food-Oriented General Merchandise. Strategy Mix. Location

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Chapter 5

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  1. Retail Institutions by Store-Based Strategy Mix Chapter 5

  2. Objectives • Describe • Wheel of Retailing • Scrambled Merchandising • Retail Life Cycle • Discuss Retail Strategy Evolution • Examine Store-Based Retail Strategies • Food-Oriented • General Merchandise

  3. Strategy Mix • Location • Operating Procedures • Goods/Services Offered • Pricing Tactics • Atmospherics • Customer Services • Promotional Methods

  4. Establishing Destination Retailer Status • Be Price-Oriented and Cost-Efficient • Be Upscale • Be Convenient • Offer Dominant Assortment • Offer Superior Customer Service • Be Innovative or Exclusive • Provide A Unique Way of Operating

  5. Medium Strategy • Moderate Prices • Improved Facilities • Broader Base of • Value- and Service- • Conscious Consumers • High-Ended Strategy • High Prices • Excellent Facilities • and Services • Upscale Customers • Low-End Strategy • Low Prices • Limited Facilities and Services • Price Sensitive Consumers Wheel of Retailing

  6. Low Rental location -- Side Street High Rental Shopping Center or Central Business District Location No Services or Services Charged at Additional Fee (or Services May Be Limited to Credit and Returns Elaborate Services Available Included in Price, Such As: Credit Decorating Delivery Gift Wrapping Alterations Layaway Spartan Fixtures and Displays Elaborate Fixtures and Displays Simple Retail Personnel Organization Elaborate Retail Personnel Organization Price Emphasis in Promotion No Price Emphasis in Promotion Self-Service or High Sales per Store Personnel Ratio Product Demonstrations, Low Sales Per Store Personnel Ratio Crowded Store Interior Spacious Store Interior Most Merchandise Visible Most Merchandise in Backroom Retail Strategy Alternatives Low-Ended Strategy High-Ended Strategy

  7. Merchandising Sandals Shoe Polish Original Merchandise Mix Slippers Shoes

  8. Scrambled Merchandising Socks Sandals Shoe Polish Belts Scrambled Merchandise Mix Handbags Slippers Shoes Gloves

  9. Accelerated Development Innovation Maturity Decline Retail Life Cycle

  10. Accelerated Development Innovation Maturity Decline Retail Life Cycle Number of Competitors Very Few Moderate Many Direct Moderate Direct Moderate Indirect Many Indirect Very Few

  11. Accelerated Development Innovation Maturity Decline Retail Life Cycle L Growth/Profitability/Duration Very Rapid Rapid Moderate to Slow Slow or Negative Low to Moderate High Moderate Very Low 3-5 Years 8 Years Indefinite Indefinite Very Few

  12. Accelerated Development Innovation Maturity Decline Retail Life Cycle L Investment/Growth/Risk Decisions Investment Min Investment High Tightly Controlled Growth Marginal Capital High Risk to Sustain in Untapped Markets Expenditures, & Accepted Growth Only if Necessary Very Few

  13. Accelerated Development Innovation Maturity Decline Retail Life Cycle L Central Management Concerns Concept Refinement Establishing a Excess Capacity & Engaging in a Through Adjustment Preemptive Overstoring; Prolonging Run-Out & Experimenting Market Position Maturity & Revising the Strategy Business Concept Very Few

  14. Accelerated Development Innovation Maturity Decline Retail Life Cycle Use of Management Control Techniques Minimal Moderate Extensive Moderate Very Few

  15. Accelerated Development Innovation Maturity Decline Retail Life Cycle Most Successful Management Style Entrepreneurial Centralized Professional Caretaker Very Few

  16. Institution Evolution • Mergers • Diversification • Downsizing • Cost Containment • Value-Driven Retailing

  17. Food-Oriented Retailers • Convenience Store • Conventional Supermarket • Food-Based Superstore • Combination Store • Supercenter • Hypermart • Box (Limited-Line) Store • Warehouse Store

  18. Food-Oriented Retailers

  19. General Merchandise Retailers • Specialty • Category Killer • Traditional Department Store • Full-Line Discount Store • Variety Store • Off-Price Chain • Factory Outlet • Membership Club • Flea Market

  20. What You Should Know • How the Wheel of Retailing, Scrambled Merchandising, and Retail Life Cycle Help Explain Performance • The Evolution of Retail Strategy Mix • The Nature of Store-Based Retailers • Food-Oriented • General Merchandise

  21. Questions?

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