Every retailer like manufacturer or wholesaler develops marketing strategy, based upon firm’s goals and strategic plans. A retailer’s marketing strategy, known as retailing strategy, is basically concerned with two aspects:
(i) Selecting a target market and Developing a retailing mix to satisfy the needs of the
(ii) Targeted market.
ADVERTISEMENTS:
The Retailing Strategy has the following seven components:
(а) Selecting a Target Market:
Before determining marketing mix a retailer has to decide about the target market to be served. Target market selection depends upon the size of the market, profit potential of the market and level of competition. Retailers base their target market on demographics, geographic and psychographic factors. Ultimately the retailers decide their target market on the basis of neighbourhood.
Image Source: blogs.ubc.ca
(b) Merchandising Strategy:
Merchandising strategy refers to decision about product lines specific items within lines and the depth. While deciding about marketing mix the retailer has to evaluate Market Activity (Market Share, Revenue Trends, Geographic and Demographic Trends), review Product Category Performance (Sales, Margin, and Inventory Turnover), understand company objectives (Market Penetration, Revenue Growth, and EPS Commitments), develop Annual Merchandising Strategy (Market Shifts, Product Mix, High Level Space, Margin Goal Shifts), and discuss Merchandising Strategy with business leaders (reconcile with Business Goals, Financial Commitments).
ADVERTISEMENTS:
Nathu’s sweet shop retailer has not only sweets, but also namkins and chat. Very recently it has added chocolates as well. Your area’s chemist keeps medicines according to type of doctors in the vicinity, the medicines prescribed by them and the other packed skin-care and hair-care items. In India retailers do not demand ‘slotting fee’ to secure shelf space for new products, but in the USA it is quite common.
(c) Customer Service Strategy:
Some of the retailers design their Marketing strategy around the services for shoppers. Home delivery, credit, return privilege, delivery and installation, and teleshopping are few such services. Basic objective of all customer services is to attract and retain target customers.
(d) Pricing Strategy:
Pricing strategy depends upon a retailer’s marketing objectives and policies. We as customers often have the perception that a particular retail in the locality charges reason and the other retailer charges higher for the same product. One retailer gives a branded packet of bread for Rs. 20, and the other one for Rs. 21, though both of them are located nearby Delhi border in Ghaziabad and the source of procurement is the same. Whatever the retailer adds to the cost of a product to determine selling price is known as markup and when the retailer gives rebate or discount to lower down the price the retailer is engaged in markdown.
(e) Location/Distribution Strategy:
Location is often held responsible for the retailer’s success or failure. Location depends upon the type of merchandise, the retailer’s finances, characteristics of target market and availability of site. A retailer may select pavement, residential areas, central market area or planned shopping centres.
ADVERTISEMENTS:
Planned shopping centres can be of five types-neighbourhood shopping centre (especially for convenience stores and total number of shops around 15 within a few shopping goods stores), Community shopping centre (shops around 30 to serve a population of around 1, 00,000, a bank branch and a supermarket), district shopping centre and regional shopping centre (with major departmental stores) and life-style centre including malls.
(f) Promotion Strategy:
To lure customers retailers use different techniques of promotion. While the neighbourhood retailers depend on word-of-mouth communication, the larger retail stores go in for advertising, still bigger stores especially Big Bazaar buys full page in national dailies and provided different facilities to attract footfalls.
(g) Store Atmospherics:
With the passage of time the consumers have charged. Today, they prefer to shop at a retailer where exterior and the interior attract them. A store’s exterior depends upon architecture design, window displays, and entryways. Interior atmospherics include store layout merchandise presentation, lighting, air conditioning, colour combination, sounds, scents and cleanliness.