Chapter 3

Retailer Strategy Mix

•          store location

•          operating procedures

•          goods/services offered

•          pricing tactics

•          store atmosphere

•          customer services

•          promotional methods

The Wheel of Retailing

•          Do not lose sight of your prime customer’s price consciousness

•          Beware of the dangers in upgrading target markets– Old segment gets “sticker shock” and new segment does not accept retailer’s revised positioning

•          Do not create opening for new cost-conscious retailer to emerge

•          Employ customer benefit costing to weigh the cost and benefits of specific service upgrades

•          Use unbundled pricing to separately charge for select services such as delivery, installation etc.

Retail Strategy Alternatives

Scrambled Merchandising (Format Blurring)

•          Desire for one-stop shopping format.

•          Concern to adopt “hot” products to increase store traffic

•          Desire for cross selling opportunities

•          Looking for high gross profit businesses

The Retail Life Cycle

How Retail Institutions Are Evolving

•          Mergers: combinations of separately owned firms

•          Diversification: retailers become active in businesses outside their normal operations

•          Downsizing: unprofitable stores are closed or divisions are sold off