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RMlecture 2

The document discusses the retail marketing mix, emphasizing the controllable tools used to influence target market responses. It covers various dimensions of retail products, including service quality, merchandise assortment, and brand image, while highlighting the importance of category management and product portfolio strategies. Additionally, it explores the significance of retailer brand products and their impact on consumer perception and loyalty.

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13 views23 pages

RMlecture 2

The document discusses the retail marketing mix, emphasizing the controllable tools used to influence target market responses. It covers various dimensions of retail products, including service quality, merchandise assortment, and brand image, while highlighting the importance of category management and product portfolio strategies. Additionally, it explores the significance of retailer brand products and their impact on consumer perception and loyalty.

Uploaded by

dsouzadenson67
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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The retail marketing mix and

the retail product

“the set of controllable tactical


marketing tools that the firm blends to
produce the response it wants in the
target market” (Kotler 1999)
The retail marketing mix
The retailing product and the product in
retailing
PRODUCT BASED
BENEFITS
•Store/product
• Service Total customer benefits
• Retail personnel
• Retail experience
• Image/brand
• Loyalty scheme CUSTOMER
VALUE
COSTS PERCEPTION
•Monetary
•Time Total customer cost
•Travel/energy
•Retail experience
•Risk
Dimensions of the retailing product

 Service: tangibles, reliability, responsiveness,


empathy, assurance
 Quality: product and service, expectations versus
experience
 Merchandise: assortment, variety, image
 Store brand: improved image and added value
 Features and benefits: facilitating aspects of the
store
 Atmospherics: planned physical messages in the
design of the buying environment
The product in retailing

 Products
 Managing product life cycles
 Merchandising functions and process
 Depth and breadth
 Ranging policy
 Own brands
 Stock turn
Merchandising and retail marketing

 Satisfy customer needs/wants to meet


business objectives within context of
competitive strategy
 Selection and sale of merchandise which
presents clear message for consumers
 Identify sources of merchandise
differentiation to distinguish offer from
competitors
 Develop relationships within supply chain as
source of customer value
Merchandising: basic functions

Selection, purchase, stock management,


display, and sale of a range of products
involving:
 Select and evaluate products

 Source, select and appraise suppliers

 Negotiate margins, quantities and marketing


support
 Monitor sales

 Price and markdown


Extract from Merchandising Plan: Tesco Electrical
Merchandising: category management

 “Category management is related to


decisions over groups of products that are
selected and placed to satisfy use occasions
or consumption patterns. This is based upon
strategic retailing principles that attempt to
maximise sales and profits.” Gilbert
 “strategic management of product groups
through trade partnerships which aim to
maximise sales and profits by satisfying
shopper needs” (igd)
The process of category management

www.clearview solutions.com
Types of category management
Occasion based Similar products
Ranging policy: assortment versus variety

 Product line depth: wide choice within generic


product class (assortment): Tie Rack wide
assortment of brands, prices, styles within
generic product class

 Product line breadth: wide choice of generic


product classes with few brand choices
(variety): Lidl 1000 SKUs but only 1 brand in
each product class
Assortment profiles and merchandise
strategies

Tesco Express
Cook and Walters 1991
Assortment profiles and merchandise
strategies

B&Q Convenience store


Assortment profiles and merchandise
strategies

John Lewis Debenhams


(Fashion, cosmetics, homeware)
Planning range and assortment

 Determined by competitive strategy and


objectives
 Customer needs, budget, space availability
 Geographical information systems, customer
databases and sales data facilitate matching
merchandise mix to needs of local market
 Shift to understanding of needs and wants at
local level
New product additions

 Fit with existing range


 Growth potential
 Availability and competitive conditions
 Profitability
 Manage abandonment of slow selling lines
Managing product portfolios
Introduction Growth Maturity Saturation
Sales Low Rapid Little growth Decline
increase
Investment High. Few Low. Profit Price Profits decline
profits growth competition
Vulnerability High Low Increasing High
Distributors Few Many. Intense Shake out Managed
competition abandonement

Experience Low Growing High High


Retail brand products
“a brand name owned by the retailer for a line or variety of items under
exclusive or controlled distribution” (Koskinen 1999)

COUNTRY Retailer brand share of food sector


Switzerland 50%
UK 34
Belgium 24
Netherlands 21
Spain 18
France 16
Germany 12
Finland 9 KPMG (2000)

Tesco 55%, Sainsbury 61% Asda 58%


Retailer own label

Important to nearly
25% of shoppers
and important
differentiator in
competitive market
Boots’ Private Label brand architecture

Premium private label No7,

Price and Speciality lines Botanics, Time Delay


Quality Sanctuary

Standard range Boots Expert, 17, Soltan

Generic private label Boots Essentials

Volume
Drivers of own brand development

 Better margins
 Increased pressure on manufacturers
 Contribution to store image and maintaining
store loyalty: reinforce brand through broad-
ranging and aggressive own brand strategy
 Opportunity for differentiation and premium
pricing (M&S food, Bodyshop)
 Lower prices to consumer/better price choice
 Control over price, delivery and quality
Retailers’ Brand Image Dimensions
 Like the brands they sell retailers have brand images that must
be carefully constructed and maintained
 Access: key component in shoppers’ assessment of total
shopping costs
 Atmosphere: colour, music, crowding, smells influence how often
consumers visit, how long they stay, how much they spend.
Instore personality and rich experience important part of
differentiation
 Price image – created by pricing strategy (and atmosphere).
Frequent discounts help to create favourable image
 Cross category assortment: perception of breadth of products
and services positively influence store image
 Within category assortment: as assortment of brands, flavours,
sizes increases consumers perceive greater utility/value
(Ailawadi and Keller)

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