RETAILING AND MARKETING : RETAILING AND MARKETING Learning Objectives : Learning Objectives Define retailing and marketing
Explain the meaning and concept of marketing and its practices in retail organisations
Review the concept of marketing for retailers
Review the elements of retail management mix.
2. Definition of Retailing : Definition of Retailing The term ‘retailing’ is derived from the old French word ‘retailler’, meaning ‘a piece of’ or ‘to cut up’.
“any business that directs its marketing efforts towards satisfying the final consumer based upon the organisation of selling goods and services as a means of distribution”.
3. Growing Importance of Retail Sector : Growing Importance of Retail Sector Large and increasing contribution to GDP
Economic importance more visible
Retailers as gatekeepers
Retailers diversifying their activities
Organizations growing on an international scale
Blurring of areas of retail to include wider areas of business activity – store cards/credit cards, gas/petrol retailing, bank services.
Size of operation allowing for supply chain control.
4. Structural trends in American & European retailing : Structural trends in American & European retailing Increasing dominance of retailers over suppliers
Increasing market share held by multiples and associated loss by independents and co-operatives.
Increasing rates of market concentration
Marketing and Operational superiority of the big players providing cost-effectiveness
All of the trends occur to differing extents throughout America & Europe.
5. Marketing in Retail Organization : Marketing in Retail Organization Definition of Marketing
The Chartered Institute of Marketing (CIM) defines marketing as:
“the management process responsible for identifying, anticipating and satisfying customer requirements profitably”.
Marketing philosophy is the acceptance of customer as Queen/king.
6 Definition continues…. : Definition continues…. Marketing is therefore:
A management function
It organizes and directs
It has a function of assessing
It has a function of conversion
It deals with consumer purchasing power
It deals with consumers or users
It deals with moving the goods to the final consumer
It achieves the profit target or other objectives/aim.
7 Marketing Functions : Marketing Functions Obtaining demand via:
Price and pricing
8 Marketing functions : Marketing functions Servicing demand through:
9 Other functional activities : Other functional activities Other functional activities cover broad areas including:
General administration and management
Public relations and inter-organization communications
Retail marketing research
Retail information technology system
International operations or cross-boarder retailing
10. Marketing management mix : Marketing management mix The marketing management mix covers the key dimensions of:
Product (brand name)
Price and pricing
Services including customer service
Store ambience and atmospherics.
11. Marketing Practices in Retailing : Marketing Practices in Retailing Activities at strategy level:
Environmental (PESTLE) search
Strategy development (STP marketing, Brand management etc.)
Building strong organization
Implement retail strategy
Counter competitive threats
Forecast future market trends (SWOT analysis, PESTLE analysis, Gap analysis etc.)
12. Marketing practices in Retailing : Marketing practices in Retailing Activities at operational level:
Make operational decisions
Implement operational strategy
Manage store operations
Manage human resource
Manage store-level resources
13. Retail marketing mix : Retail marketing mix Store location
Retail integrated communications
14 Role of competition in retailing : Role of competition in retailing Retailing is more competitive than most other sectors
Retail competition is multidimensional i.e., 5 levels
1st level – product, services, communication, and physical distribution.
2nd level – related to retail organization and its horizontal competitors.
3rd level – other retail organization and the vertical competition.
4th level – deals with geographical dimensions including location and shopping environment.
5th level – nature of the marketplace’s (local, national international) economy, including economic boom, bust, recession, inflation prone, hyper inflation etc..
15. Dimensions of Change in retail competition : Dimensions of Change in retail competition Retail competition has been changing along spatial, institutional and functional dimensions.
Spatial dimension – retailing follows population trends.
Institutional dimension – both large and small firms are engaged in retail competition.
Functional dimension – takes two dimensions e.g. price competition; and non-price competition.
16. Retail concentration : Retail concentration High concentration of retail competition could be attributed to ease of entry.
High profit in retailing invites competition and resulting in high concentration.
Large firms taking over smaller firms leads to polarization and concentration.
Government policies and regulations favoring large firms and less favorable to smaller firms lead to concentration.
Consumers willingness to accept process foods and innovative products help build retail concentration.
17. Competitive advantage (differentiation) : Competitive advantage (differentiation) Retailers need to differentiate themselves from their competitors
Competitive advantage is achieved through differential congruence.
Differential congruence is the positive balance between store’s image and the customer’s self-image.
Successful retailers must achieve differential congruence as a means of coping with growing competition.
Retail management must create a congruence between the store’s perceived image and the customer’s self-image to achieve differential advantage.
18. Monopolistic competition : Monopolistic competition Monopolistic competition is where each retailer has certain unique features, e.g. in terms of merchandise mix, its location etc.
The unique features give retailers competitive advantage over their competitors.
The ability to use the opportunity to create competitive advantage is indicative of good retail marketing management.
Retailers need to establish a degree of monopoly power in order achieve competitive edge or to survive in a fast changing retail market.
19. Conditions for monopolistic competition : Conditions for monopolistic competition The conditions that monopolistic competition imposes on retail organization include:
Relative ease of entry
Relative ease of exit
A less than perfectly elastic demand function
Less than perfect information for individual firm
Consumer behavior is less than being entirely rational
The possibility of acquiring additional information.
20 Seminar (Group Work) : Seminar (Group Work) “It is the effective blending of all the retail marketing mix activities within the retail organization that determines the success of retail marketing management”.
In your group, prepare in summary form for class presentation how these retail marketing mix activities could be blended for effective retail marketing management.
You may use PowerPoint presentation style.