3 Chapter 3 Strategic Planning in Retailing RETAIL MANAGEMENT: A STRATEGIC APPROACH, 10th Edition...
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Transcript of 3 Chapter 3 Strategic Planning in Retailing RETAIL MANAGEMENT: A STRATEGIC APPROACH, 10th Edition...
Chapter 33Strategic Planning in Retailing
RETAIL MANAGEMENT:A STRATEGICAPPROACH,
10th Edition
BERMANBERMAN EVANS EVANS
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Retail Strategy
The overall plan or framework of action that guides a retailerOne year in durationOutlines mission, goals, consumer
market, overall and specific activities, and control mechanisms
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Figure 3-1: Elements of a Retail Strategy
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Benefits of Strategic Retail Planning
Provides thorough analysis of the requirements for doing business for different types of retailers
Outlines retailer goals Allows retailer to determine how to differentiate itself
from competitors Allows retailer to develop an offering that appeals to a
group of customers Offers an analysis of the legal, economic, and
competitive environment Provides for the coordination of the firm’s total efforts Encourages anticipation and avoidance of crises
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Organizational Mission
Retailer’s commitment to a type of business
and to a distinctive role in the marketplace
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Figure 3-2: The Focused Organizational Mission of Frisch’s Restaurants
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Ownership and Management Alternatives
A sole proprietorship is an unincorporated retail firm owned by one person
A partnership is an unincorporated retail firm owned by two or more persons, each with a financial interest
A corporation is a retail firm that is formally incorporated under state law; it is a legal entity apart from its officers
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Figure 3-3: Checklist to
Consider When Starting a New
Business
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Figure 3-4: Checklist for
Purchasing an Existing Retail
Business
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Figure 3-5a: Selected Kinds of Retail Goods and Service Establishments
Durable Goods Stores:Automotive group
Furniture and appliances groupLumber, building, and hardware group
Jewelry stores
Nondurable Goods Stores:Apparel group
Food groupGeneral merchandise group
Gasoline service stations
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Figure 3-5b: Selected Kinds of Retail Goods and Service Establishments
Service Establishments (Personal):Laundry and dry cleaning
Beauty/barber shopsFuneral services
Health-care services
Service Establishments (Amusement):Movie theatersBowling alleys
Dance hallsGolf courses
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Figure 3-5c: Selected Kinds of Retail Goods and Service Establishments
Service Establishments (Repair):Automobile repair
Car washesConsumer electronics repair
Appliance repairs
Service Establishments (Hotel):HotelsMotels
Trailer parksCamps
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Image and Positioning
An image represents how a given retailer is
perceived
by consumers and others
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Positioning Approaches
Mass merchandising is a positioning approach whereby retailers offer a discount or value-oriented image, a wide or deep merchandise selection, and large store facilities
Niche retailing occurs when retailers identify specific customer segments and deploy unique strategies to address the desires of those segments rather than the mass market
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Figure 3-6: Niche Retailing by Hear Music
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Figure 3-7: Selected Retail Positioning Strategies
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Target Market Selection
• Three techniquesThree techniquesMass marketingConcentrated marketingDifferentiated marketing
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Figure 3-8: Jean-Philippe Patisserie: A Shop of Distinction
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Strategic Implications of Target Market Techniques
Retailer’s locationGoods and service mixPromotion effortsPrice orientationStrategy
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Figure 3-9: Developing an Overall Retail Strategy
Controllable Variables:
•Store location•Managing business
•Merchandise management and pricing
•Communicating with customer
Uncontrollable Variables:•Consumers
•Competition•Technology•Economic conditions
•Seasonality•Legal restrictions
RetailStrategy
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Table 3-4a: Legal Environment and Retailing
Store Locationzoning lawsblue lawsenvironmental
lawsdirect selling lawslocal ordinancesleases and
mortgages
Managing the Businesslicensing provisionspersonnel lawsantitrust lawsfranchise
agreementsbusiness taxesrecycling laws
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Table 3-4b: Legal Environment and Retailing
Merchandise Management and Pricingtrademarksmerchandise restrictionsproduct liability laws and lemon lawssales taxesunit-pricing lawscollusion lawssale pricesprice discrimination laws
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Table 3-4c: Legal Environment and Retailing
Communicating with the Customertruth-in-advertising and selling lawstruth-in-credit lawstelemarketing lawsbait-and-switch lawsinventory lawslabeling lawscooling-off laws
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Table 3-6: Sample Strategic Plan
Sally’s is a small, independently-owned, high fashion ladies clothing shop located in a suburban strip mall. It is a full-price, full-
service store for fashion-forward shoppers. Sally’s carries sportswear from popular
designers, has a personal shopper for busy executives, and has an on-premises tailor. The store is updating its strategic plan as a means of getting additional financing for an
anticipated expansion.
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Additional Concerns for Global Retailing
In addition to the strategic planning process:assess your international potentialget expert advice and counselingselect your countriesdevelop, implement, and review an
international retailing strategy
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Factors Affecting the Success of a Global Retailing Strategy
TimingA balanced international programA growing middle classMatching concept to marketSolo or partneringStore location and facilitiesProduct selection
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Figure A3-1: Factors to Consider When Engaging in Global Retailing