RETAIL MARKETING

RETAIL MARKETING ENVIRONMENTCHAPTER 01

DEFINITION

• The driving forces in the business environment that comprise both external and internal variables which have a direct bearing on the changing scenario of retailing, can be termed as the Retail Business Environment

Relevance

• Competition: SWOT• Changing trend in buying behavior: lifestyle, middle

class• Scanning markets, catchment and location analysis for

a retailer: PESTEL• Cultures and legal laws in different countries• Designing the retail mix: merchandise variety,

assortment, pricing strategy, advertising, promotion, layout, store design and location and visual merchandising

Retail Mix

• Merchandise (wet and dry): Product• Price (Premium, Penetration, Economy,

Skimming): Pricing Strategies• Place (Direct Selling, Agents, Distributors,

Retailers, Advertisements): Location• Promotion (Personal Selling, Sales Promotion,

Public Relations, Direct mail, Trade fairs and exhibitions, Advertising, Sponsorship): Promotional Strategies

SLEPT Analysis

• Social-Cultural:– What is the dominant religion in that particular region?– What are the attitudes to foreign products and services?– Does language impact the diffusion of products into

markets?– How much time to consumers have for leisure?– What are the roles of men and women within society?– What is the lifespan of the populations? Are the older

generations wealthy?– Does the population have a strong/weak opinion on green

issues?

SLEPT Analysis

• Legal Factors: refer to government legislation that places constraints or obligations upon a business. Companies must quickly adapt to changes in the law in order to avoid prosecution

• Economical Factors: Marketers need to consider the state of a trading economy in the short and long terms. This is especially true when planning for international marketing. Therefore, one must be aware of the following key issues. Exe. Interest rate, inflation level, income per capita, GDP

SLEPT Analysis

• Political Factors:– How stable is the political environment?– Will government policy influence laws that regulate or

tax your business?– What is the government’s position on marketing ethics?– What is the government’s policy on the economy?– Does the government have a view on culture and

religion?– Is the government involved in trading agreements such

as EU, HAFTA, ASEAN or others?

SLEPT Analysis

• Technological Factors:– Does technology allow for products and services to be

manufactured or provided more cheaply and to adhere to better quality standards?

– Do the technologies offer consumers and business more innovative products and services such as internet banking, new generation mobile telephone.etc?

– How is the distribution changed by new technologies, exe. Books via the internet, flight tickets, auctions, etc?

– Does technology offer companies a new way to communicate with consumers, exe. Banners, CRM?

Modes of Entry for a Retailer

• Foreign Collaboration• Strategic Alliances• Mergers• Amalgamations: two or more retailers form a new entity• Joint ventures• Acquisitions• Takeovers• Licensing• Franchising

Question and Practice

• Define the retail marketing environment• What are the macro-environmental variables

present in the retail environment? Elaborate using examples.

• What are the changing dynamics in the BRICS nations and their impact on RME?