CHAPTER 4: RETAIL MARKETING STRATEGY

  Retailing strategy is the attention to long-term strategic planning than ever before. These are due to the emergencies such as new competitors, new formats, new technologies and shifts in customer needs. There are many opportunities for retailers in order to develop sustainable competitive advantages. For example, customer loyalty, location, unique merchandise and customer service. In addition, retailers can develop a sustainable competitive advantage by dropping the price of your merchandise. This means that the retailer can lower down the price offer of the product sold to the customer. Next, retailer can build a store at the best location. This is because the strategic place for the retail store can attract a lot of people to enter the store.

  Besides, there are different strategic growth opportunities that retailers can pursue.

Market Penetration

• Market Penetration

It is a growth opportunity that is directed toward existing customers using the retailer’s present retailing format. This can be done by opening more stores in the target market area or open longer hours. However, the retailers requires high product knowledge and selling skills in order to enter the market.

• Market Expansion

     Market expansion is a growth opportunity that involves using the existing retail format in new market segments. For example, Big Apple that sells donuts open new stores at the petrol stations.

•  Format Development

     It is a new retail format that just developed with a different retail mix for the same target market. For example, Tesco is one-stop destination with the widest range of food and non-food products that are convenience for people to purchase in one store.

•     Diversification

   It is a new retail format toward a market segment that is not currently served by the retailer. It can be either related or unrelated diversification. Related diversification is where retailers’ target market and retail format shares something in common with the new opportunity. Meanwhile, unrelated diversification is little commonality between the retailer’s present business with the new growth opportunity. For example, the retailer itself designing its own private label in order to owning the retail store.