Please enable JavaScript.
Coggle requires JavaScript to display documents.
Chapter 5 Retail Institutions by Store-based Strategy Mix (Retailer …
Chapter 5
Retail Institutions by Store-based
Strategy Mix
Scrambled
Merchandising
Benefit
retailers want to increase revenues, fast-selling,
highly profitable goods&services are usually the
one added
customer make more impulse purchase
people like one stop shopping
different target markets may be reached
impact of seasonality and competition is reduced
Why Scrambled
desire for one stop shopping format
concern to adopt 'hot' products to increase
store traffic
Looking to increase store sales per square
foot and same store sales especially recessionary
period
computer electronic retailers need to offset maturity
of business and reduced price levels
looking to make up for lost sales due to Web
Desire for cross selling opportunities
looking for high gross profit businesses
Retailer
Strategy Mix
store location
Operating procedures
goods/services offered
Pricing Tactics
Store atmosphere
customer servics
Promotional methods
Wheel of Retailing
High-end strategy
High Prices
excellent facilities & services
upscale consumers
Medium Strategy
Moderate prices
improved facilities
broader base of value &
service conscious consumers
Low end strategy
Low prices
Limited facilities & services
price sensitive consumers
Cost Containment
Approach
retailer try hard to hold down initial investment & operating costs
standardizing procedures, store layouts, store
size, & product offerings, centralized buying
using secondary use locations (existing store
fixtures, storefronts, carpeting), placing stores in
smaller communities, using inexpensive construction
material
using plainer fixtures & displays (cut case), reusing
fixtures from closed stores
joining cooperative buying & adv programs, increased
use of the web vs traditional adv& catalogs
self-service operations, increased use of part time personnel
reduced product proliferation
Strategy Mix
for
High End
Location- high rental shopping center /
central business district location
Product- full assortment of name brand
Service- technicians and other item require
assembly
Promotion- extensive adv & use of highly trained
sales personnel
Price- sale at list price
Retail Life Cycle
Introduction
not same strategy mixes of existing retail instituition
this stage firm alters at least one element of the
strategy mix from traditional competitors
Growth
sales & profits rapid growth
existing firms expand geographically, newer
companies of the same type enter
cost pressures ( to cover a larger staff, more
complex inventory system
Maturity
slow sales growth for the instituitional type
overall sales continue go up, rise is at a much
lower rate than first time
Decline
industrywide sales & profits for a format fall
off
many firms abandon the format
How Retail Institutions
Evolve
Mergers
involve combination of separately owned retail firms
Diversification
retailers become active in businesses outside
their normal operations
Downsizing
when unprofitable stores are closed / division
are sold off
Store-Based Retail
Strategy Mixes
Food-Oriented
Convenience Store
a well-located, food oriented retailer that is
open long hours & carries a moderate number of items
Location- neighborhood
Prices- average to / above average
Atmosphere & services- average
Merchandise- medium width & low depth
of assortment, average quality
Promotion-moderate
Conventional Supermarket
is a departmentalized food store with a wide
range of food and related products
Location- neighborhood
-Prices- competitive
Atmosphere & services- average
Merchandise- extensive width & depth of
assortment; average quality; manufacturer;
private & generic brands
Promotion- heavy use of newspapers, flyers & coupons
Food-based superstore
is larger & more diversified than conventional
supermarket but usually smaller & less diversified
than a combination store
Location- community shopping, center isolated site
Prices- competitive
Atmosphere & Services- average
Merchandise- full assortment plus, health & beauty
aids & general merchandise
Promotion- heavy use of newspapers, flyers
Combination Store
unites supermarket & general merchandise in one facility
Location- community shopping, center/ isolated site
Prices- competitive
Atmosphere & Services- average
Merchandise- full assortment plus, health & beauty aids
& general merchandise
Promotion- heavy use of newspapers, flyers
Box (limited-line) store
Warehouse store
General Merchandise
Specialty Store
Traditional department
Full-line discount store
Variety store
Off-price chain
Factory Outlet
Membership Club
Flea market