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Retail Management: A Strategic ApproachThirteenth EditionChapter 5Retail Institutions By Store-based Strategy MixCopyright ? 2018, 2014, 2012 by Pearson Education, Inc. All Rights Reserved
Learning Objectives 5.1 To describe the wheel of retailing, scrambled merchandising, and the retail life cycle and to show how they can help explain the performance of retail strategy mixes5.2 To discuss some ways in which retail strategy mixes are evolving5.3 To examine a variety of food-oriented retailers involved with store- based strategy mixes5.4 To study a range of general merchandise firms involved with store- based strategy mixes
Retailer Strategy Mix A strategy mix is the firm’s particular combination of: store location operating procedures goods/services offered pricing tactics store atmosphere customer services promotional methods
Earning Destination Retailer StatusExamples of destination stores include Trader Joe’s, IKEA, Micro Center, Fortunoff Outdoor Store, J and R Music World, B and H Photo VideoSome combination of price-oriented and cost efficient, innovative or exclusive merchandise, and superior customer serviceWide or deep merchandise strategy
Figure 5.1 The Wheel of Retailing
Lessons of the Wheel of RetailingDo not lose sight of your prime customer’s price consciousnessBeware of the dangers in upgrading target markets– Old segment gets “sticker shock” and new segment does not accept retailer’s revised positioningDo not create opening for new cost-conscious retailer to emergeEmploy customer benefit costing to weigh the cost and benefits of specific service upgradesUse unbundled pricing to separately charge for select services such as delivery, installation etc.
Methods of Cost Containment (1 of 2)Standardizing procedures, store layouts, store size, and product offerings; centralized buyingUsing secondary use locations (existing store fixtures, storefronts, carpeting); placing stores in smaller communities; using inexpensive construc
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