Retail Marketing Strategy

Presented By

Group-3

Retail Management 1

A retail marketing strategy refers to how a store and its products sell goods to its target customers. Each type of retail business has to make decisions about all the details of its marketing mix. A marketing mix consists of the product, price, place, promotion and packaging. A retail marketing strategy is first outlined in a business plan.

A business plan contains information about the intention and goals of the company. It's created before a business opens. Business plans include research about who the company's potential customers are as well as what their needs and wants are. A retail marketing strategy should be a part of the business plan. It should include decisions about the marketing mix approach, such as how customers will get the

products.

Retail Management 2

For instance, a furniture company may choose a large warehouse, while a jewelry manufacturer may decide to sell only over the Internet. Other businesses may select a combination of a brick and mortar store for in person customer purchases plus a website for customer online shopping. All retail marketing decisions should consider the target customer as well as the company's profit. For example, having an etailwebsite rather than a retail store may save on overhead costs, but it won't be a profitable choice if the target customer isn't likely to shop online.

Common retail marketing strategies involve how products and stores are positioned and differentiated.

A differentiation strategy focuses on products that can stand out from the others competing for the attention and dollars of the target market. For example, a furniture store may offer hand-made products or other items very different from what competing stores are offering. Of course, the product shouldn't only be different, it has to be something that targeted customers want and need. Retail market differentiation must set stores and products apart in order to create strong branding.

Retail Management 3

Branding is the identity of a product or service. Retail products and services in the same industry can differ widely from each other.

For example,

low-cost hair cutting services are branded and differentiated from upscale salons bytheir "no frills" store design. Expensive hair salons, on the other hand, are usually verydetailed and fashionable in their store's look. As part of it's retail marketing strategy,an upscale salon may be positioned to potential customers as trendy, while the low-cost basic hair cutting establishment's market positioning could be promotedas budget-friendly.

Retail Management 4

Retail Management 5

• Wal-Mart Stores, Inc.,Walmart is an American multinational retail corporation that operates a chain of discount department stores and warehouse stores.

• Headquartered in Bentonville, Arkansas, the company was founded by Sam Walton in 1962 and incorporated on October 31, 1969.

• It has over 11,000 stores in 27 countries, under a total 71 different brands.

• The company operates under the Walmart name in the US and Puerto Rico. It operates in Mexico as Walmart de México y Centroamérica, in the United Kingdom as Asda, in Japan as Seiyu, and in India as Best Price. It has wholly owned operations in Argentina, Brazil, and Canada.

• Walmart is the world's largest company by revenue, according to the Fortune Global 500 list in 2014, the biggest private employer in the world with over two million employees, and the largest retailer in the world.

Retail Management 6

Advertising slogans:

Save Money. Live better

Mission Statement, Vision, Goals, & Purpose

Vision:“If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life.

Mission Statement: To help people save money so they can live better

Goal:

Becoming in an international brand

Retail Management 7

Business FormatsWalmart's operations are organized into three divisions:

• Walmart Stores U.S.

• Sam's Club

• Walmart International.

The company does business in nine different retailformats: supercenters, food and drugs, generalmerchandise stores, bodegas (small markets), cash and carrystores, membership warehouse clubs, apparel stores,soft discount stores and restaurants

Retail Management 8

INTE

RN

AL

FAC

TOR

SEX

TER

NA

L FA

CTO

RS

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

SW• Diversity in products & services• Convenient prices & locations• Strong market presence• Customer loyalty• Strong financial performance• Cost and pricing advantages over

rivals• Good supply chain

• Global Expansion: new geographic areas

• Increasing online sales• Strategic alliances

Acquiring rival firms

HarmfulHelpful

•Brand image-weak reputation•Low global presence•Behind rivals in e-commerce

• Intense Competition• Laws and Regulations:

Trade policy• Cultural barriers• Current economy • Slow market growth• Transport of distinctive

comptency

Retail Management 9

PESTEL Analysis

• Political: Policies on economy, trading agreements (NAFTA…) .

• Economical: Unemployment Rate, slightly increase in consumption.

• Socio Cultural: Faster pace of live- Efficiency is key.

• Technological: Use of IT technologies. Online shopping.

• Environmental: Recycling, Contamination issues.

• Legal: More laws and more complex.

Retail Management 10

Business-Level Strategy: Combined Strategy

Wal-Mart combines a Cost-Leadership and Differentiation strategies because:

I. Allowed to achieve a large scale and an efficient supply chain.

II. Has its own low-cost brands, like Great Value.

III. A unique cost structure that allows Walmart to establish the lowest prices and achieve competitive advantage. (best value/price combination )

IV. Present in many different industries and markets with efficient distribution channels.

V. Very difficult strategy to imitate by offering a broad quantity of products at a low price.

Retail Management 11

Walmart International

Retail Management 12

Examples of International Success

• China:

– Most populous country

– Lower income in middle-class families

– Adaptation to market

– 85% of products from local suppliers.

Retail Management 13

Examples of International Failure

Germany– Walmart was not able to benefit from economies of scale– Unable to become cost leader– Culture differences– Low profitability market

India– Political and legal barriers:

• Foreign companies are not allowed to set up big stores unless they sell only one brand.

South Korea– Very demanding customers– Did not customized to market– Big companies also fail in South KoreaRetail Management 14

Current Developments (2011-present)

• In January 2011, at the urging of Michelle Obama and her staff, Walmartannounced a program to improve the nutritional value of its store brands over the next five years, gradually reducing the amount of salt and sugar, and eliminating trans fat.

• Walmart also promised to negotiate with suppliers such as Kraft with respect to nutritional issues. Reductions in the prices of whole foods and vegetables were also promised as well as efforts to open stores in low-income areas, "food deserts", where there are no supermarkets.

• On April 23, 2011, the company announced that it was testing its new "Walmart To Go" home delivery system where customers will be able to order specific items offered on their website such as groceries, toiletries, and household supplies. The initial test is in San Jose, California, and the company has not said whether it will be rolled out nationwide.

Retail Management 15

• On November 14, 2012, Walmart launched their first mail subscription service called Goodies. Customers pay a $7 monthly subscription for five to eight delivered food samples each month, so they can try new foods.

• In August 2013, the firm announced it was in talks to acquire a majority stake in the Kenya-based supermarket chain.

Retail Management 16

Key Success Factors

• A supply chain with integrated technology

• An ability to generate large sales volume (economies of scale)

• Every Day Low Prices

• Superior logistics systems

• Decentralized operations

• A strong and unique culture (in U.S.)

Retail Management 17