Retailing Management unit-3 - IMBA Osmania university

RETAILING
MANAGEMEN
T
UNIT - 3
PRESENTED BY
K.BALASRI PRASAD

BBA/MBA 5 year Integrated Course III Year - V Semester
Paper – 5.1: Retailing Management
Unit – I: Introduction:
Definition and Scope of Retailing; Retailing Scenario – Global; Retailing Scenario-
India; Prospects of Retailing in India’s; Trends in Retailing; Retailing formats; Retail
Strategies.
Unit – II: Store Planning:
Store planning; Design and Layout; Retail merchandising; Supply Chain Management
in Retailing.
Unit – III: Retail Marketing and Advertising:
Retail Marketing Strategies; strategic Positioning; retail marketing mix; customer
relationship management; direct marketing; micro marketing in retailing, and adverting
in retailing.
Unit – IV: Retail Operations and e-Tailing:
Store Operating parameter; using strategic resource model in Retailing; Designing
performance programme; online retailing, and online retail categories.
Unit – V: Retail Management Information System and Retail Research:
Retail Technology and Automations; Retail Technology and CRM; Human resources
and Executive information systems; Developing a research Methodology; Retail audit.
References:
1. Cullen & Newman, 2007, “Retailing, environment and operations”, Thomson. 2. Levy & Weitz, 2005, Retailing, TMH.

Unit – III
Retail Marketing and Advertising
Retail Marketing Strategies;
Strategic Positioning;
Retail marketing mix;
Customer relationship management;
Direct marketing;
Micro marketing in retailing, and
Advertising in retailing.

Retail Marketing Strategies
Retail marketing involves every element from the
interior to exterior, promotions and offers, product
placements, in-store advertisement, strategic
placement as well as the behavior of store
representatives.
Retail Marketing include set of activities where a
retailer buys products from a wholesaler or
manufacturer to sells them to ends users
(consumers).
Retailers are always in search of different marketing
strategies to attract more customer, increase
awareness and sales growth.
In the first place it should select target market and
then select combination of right marketing mix can

The elements that need close consideration
when drafting a retail marketing strategy:
1. Targeting and Retail Positioning
 Defining the target markets should be the first priority
before positioning.
The main objective of Retail positioning is to achieve
competitive advantage by differentiating itself from
its competitors.
Differentiation allows customer to prefer a retail store
than other stores.
In the retail positioning strategy, retail branding for
example brand name, brand logo, technological
advancement and retail customer experience play a

2. Retail Store Location (Place)
 Retail store location has a huge impact on overall sales
performance of the product.
 Today‘s customer is more empowered and having many
alternative for example online shopping.
 The best retail strategy is to focus on your target market
- level of competition, disposable income, traffic
conditions and parking facilities when deciding to open
a store in a city, specific area of the city or even an online
store.
3. Price Strategies
 Pricing is the key to retail marketing strategy. The price
should include not only the cost of the product but also
overhead costs as well.
 Pricing strategies used by majority retailer:

4. Promotional Strategies
 Retailers can adopt both in-side and out-store
advertisement strategies.
 Strategic placement of marketing messages can
increase the sale of targeted brands and products.
 Retailers can use promotional strategies for different
objectives for example introducing new products,
increasing sales, increase brand equity and corporate
image.
5. Trained Employees
 In any retail marketing, trained staff can easily
influence customers’ decision making process.
 If the staff know how to deal customer at personal level,
it can positively affect the retail store in the long-run.

Retail Marketing Examples
Wal-Mart: Wal-Mart is the giant of retail consumer market;
however, despite the constantly rising of cost of goods and
thinner profit margins. Wal-Mart has still managed to cater
all type of income groups.
Amazon: Amazon is a big player in both the e-
commerce world and physical retail and holds a strategy to
deliver products to customers even faster and compete
more effectively with other online and brick-and-mortar
outlets.

Strategic Positioning
Strategic positioning is concerned with the way in
which a business as a whole distinguishes itself in
a valuable way from its competitors and delivers
value to specific customer segments.
A company’s relative position within its industry
matters for performance.
Strategic positioning reflects choices a company
makes about the kind of value it will create and
how that value will be created differently than
rivals.
The role of the strategist is to engineer superior
performance within a given industry.

Companies must search out “white space” in the
industry, which usually means competing on one of
two fronts:
1. Differentiation:
 Driving up prices is one way to increase profitability. To
command a premium price, a company must deliver
distinctive value to customers.
 Creating a distinctive store has two goals – one, to
attract customers to visit the store, and second, to
create an image and experience of the store visit in the
minds of the customers so that the memory of the store
is remembered.
 A critical first step in developing a differentiating plan is to
understand what happens when a customer interacts
with the product assortment.
 Three potential levels of influence exist - assortment

2. Cost Leadership:
 Driving down costs is another way to increase
profitability. To compete on cost, companies must
balance price with acceptable quality.
Strategists aim to shift relative price or relative cost
in a company’s favor, to achieve competitive
advantage.
Price differentiation
Price range of products to suit target customer
Low features, low price ranges
High features, top-of-line
Positioning is detailed using Four Dimensions –
products and their attributes, services to be

Positioning in retail is the basis of how
one store competes with another
retail store; it starts by defining
target consumers in terms of
‘distinctive’ needs, and ends when
‘unique’ set of executable
action steps are identified to
achieve an ‘identity’ in the minds of
customers, an identity that
customers’ experience in the store
and distinguish in their minds.

Retail marketing mix
A retail mix is the marketing plan put in place to
address key factors such as location, price,
personnel, services, and goods. The retail mix is
also referred to as the “6 P’s”

 Competitive advantages you have in your strategy should
help form your retail mix.
 The retail mix should always have the target market in
mind.
 The retail mix will differ based on the store and the type of
product offered to the customer.
1. Price
 What is my pricing strategy?
 What is my markup strategy and how does that affect my
overall retail price?
 You must make sure you calculate your retail price based
on the markup you receive and not the costs involved.
 You also want to think about profitability and relate this
back to the goals of your area as well as your organization.

2. Promotion
 What promotional tools will you use to influence the
consumer’s purchase decision and, overall, their intention
to purchase?
 This is where you also want to make sure you include a
budget that shows where resources are allocated as well
as a time table for the promotional activities.
 Remember to include specific examples of your proposed
promotional activities.
 Some examples include online promotions, print
advertising, and any television advertising.
3. Place
 What are the hours of operation for your store?
 How many employees do you need and when do you
need them?

 General description of the responsibilities of each
associate along with some type of detailed info on the
organization’s structure.
 Dependent upon the area in which you are located as well
as the needs of the customer.
4. Product
 What type of product do you intend to carry?
 What is the depth as well as the breadth (number of SKUs)
you will carry in your assortment?
 What is your anticipated turn as well as inventory levels?
 Make sure you have adequate inventory levels to meet
customer demand.
 Too much product could lead to excessive markdowns
which deteriorates profitability.
 Too little desired merchandise might lead to missed sales

5. Presentation
Will you have a free-standing location?
Will you be located in the mall?
How is the location you have chosen a good fit for your
target market?
It is during this time you will also want to provide a
thorough trade analysis that shows the population in
the area and how they are a good fit for your business.
6. Personnel
How are you selling to your customers?
What kind of internal marketing supports your sales
team?
What are the graphics that set your store apart?

Customer Relationship Management
 Customer relationship management (CRM) is the
combination of practices, strategies and technologies that
companies use to manage and
analyze customer interactions and data throughout
the customer lifecycle.
 The goal is to
improve customer service relationships and assist
in customer retention and drive sales growth.
 One important aspect of the CRM approach is the systems
of CRM compile data from a range of different
communication channels, including a company's website,
telephone, email, live chat, marketing materials and more
recently, social media.
 Collection of and access to customer data can help
businesses identify trends and insights about their

CRM process
 CRM process is a collaborative effort between marketing,
sales, and support departments.

1. Generate brand awareness
The first step to acquiring new customers is to introduce
them to your business.
a) Learning about your target audience: Marketers will
conduct research to identify their target audience’s
demographics, interests, preferred channels of
communication, what messaging they respond most to
and what they care about.
b) Segmenting your target audience: To segment a
brand’s target audience into similar groups based on
similar interests or demographics. This helps marketers
identify which types of people are most likely to become
customers and who their campaigns should target.
c) Creating marketing campaigns that speak to those
target demographics: Create unique campaigns for
unique customer segments such as on social media or

2. Acquire leads
Introducing your brand to a potential customer is just
the beginning of the CRM process. You have to
encourage them to learn more about your business
and engage with it.
Depending on how your company is structured, this
lead acquisition step could be a marketing or sales
team responsibility — or both.
Your marketing team, for example, might encourage
website visitors to share their email with a newsletter
signup CTA or a social media giveaway.
Sales, on the other hand, could use their CRM system
to set up live chat on your site. With this feature, your
team can proactively reach out to potential customers
who land on your website.

3. Convert leads into customers
 Now it’s time to turn those leads into customers.
 Whether they’re interested enough to make a purchase.
 Identify opportunities with the highest probability of a sale.
 If leads do seem likely to make a purchase, executives
must then be able to nurture them further and build their
trust enough to convert.
4. Provide superior customer service
 In order to grow as a company, you need to retain
customers. How do you keep that customer coming back?
Excellent service from support.
 According to Zendesk’s 2020 Customer Experience
Trends Report, customer service is the biggest factor that
determines a consumer’s loyalty to a brand.
 Forty-nine percent of customers say being able to resolve

5. Drive up-sales
When we think of a returning customer, we imagine a
shopper continually coming back to the same business
to buy the products they know and love.
But there is another key way existing customers
provide value — by upgrading to more expensive
products.
How do you convince customers to switch products?
Personalized recommendations via email are a great
place to start.

Advantages of Customer Relationship
Management
Enhances Better Customer Service
Facilitates discovery of new customers
Increases customer revenues
Helps the sales team in closing deals faster
Enhances effective cross and up selling of
products
Enhances customer loyalty
Builds up on effective internal communication

Direct Marketing
Direct Marketing is a form of retailing under which a
potential customer is first exposed to a product or
service through any form of non- personal
communication and then orders by phone, fax, courier
or email.
Direct marketing is an interactive system of marketing
that uses one or more advertising media to affect a
measurable response at any location.
The response can be in the form of:
1. An order (direct order)
2. An inquiry (lead generation)
3. A visit to a store or other place of business for
purchase of a specific product (s) or service(s)
traffic generation.

 An organization directly communicates to its customers to
generate revenue producing response, transaction or
sale through leaflets, pamphlets, brochures, print ads
mailed or catalogs distributed directly to its existing and
potential consumers.
 All of the information necessary for the prospective buyer
to make a decision to purchase and complete the
transaction is provided in the advertisement.
 Direct marketing is a method wherein the manufacturer or
producer sells directly to retailer, user or ultimate
consumers without intervening intermediaries. Various
forms of Direct Marketing-telemarketing, Direct mail
marketing, television, marketing,
 Direct marketing is one of the forms of communications
which seeks to cause action; forms databases about
clients; influences separate layers of consumers; gives

Problems of Direct Marketing
Operating costs
Low response rates
 Intense competition
Image problems
Lack of comfort with interactive technology
Privacy and ethical issues

Micromarketing
An approach to advertising that tends to target a
specific group of people in a niche market. With
micromarketing, products or services are marketed
directly to a targeted group of customers.
With micromarketing, a company defines an
audience by a specific trait, such as gender or job
title or age range, and then creates campaigns geared
toward that specific group.
A company's ultimate goal in micromarketing is to
communicate to a targeted group of consumers and
get them to take action, such as buying a good or
service.
The retail service (such as the merchandise offered in

Retailing Management unit-3 - IMBA Osmania university

Advantages of Micromarketing
Micromarketing is highly targeted, as it tends to
target a specific segment of the population.
Micromarketing helps in saving costs, as it
narrows down the population you target.
Small micro-budgets are assigned for this type
of marketing, and overall, it reduces the
marketing expenses for a company.
Micromarketing provides user-generated
growth.
It means that if the first users like your product
or service, they are likely to spread the word to
their friends and family.

Disadvantages of Micromarketing
Micromarketing is time-consuming, as it requires
the marketer to carefully select the segment of the
population it wants to target.
It requires a large amount of research and
resources.
The marketer must spend time on developing the
campaign.
Micromarketing requires a higher cost of customer
acquisition because the target segment comprises
fewer people.
The average cost of acquiring a new customer
may increase.
Micromarketing may not target the right audience,

Example:
A good example of micro marketing can be
found in the real estate industry. The
realtor will consider the specific needs and
demands of the clients within a
larger demographic profile and will invest
all efforts to find a property that suits their
as many requirements as possible while
continuously focusing on the homes that
clients can afford.

Advertising in retailing
Any paid form of non-personal communication
through the media about a product that has an
identified sponsor.
Retail advertising is the process by which
retailers use store advertising (online and
offline) to drive awareness and interest towards
their products to generate sales from their target
audience. Through advertising, a retailer attempts
to influence their audience to take a specific
action.
Advertising is normally associated with mass
communication, where a broad target market

DAGMAR model (Defining
Advertising Goals for Measured
Advertising Results) describes the
sequence of stages through which the
prospective customer has to move:
Unawareness;
Awareness;
Comprehension of the offer;
Conviction;
Action or Inaction.

As part of the advertising communication
process, information has to be clearly
transmitted so that it can be decoded and
comprehended properly.
The two-step flow of
communication
1. The first step in the process is the
communications flow from media to opinion
leaders – the individuals whose attitudes,
opinions, preferences and actions affect
others.

Types of advertising
Product advertising
 Product advertising will feature the promotion of
merchandise that is new, exclusive, and superior in
aspects of quality and design as well as creating
awareness of complete assortments or special
merchandise events.
 It is aimed at creating awareness of the product, its
availability and benefits.
Markdown event advertising
 This is used to create some excitement about a special
period of lower cost offers for products.
 It is likely to be more successful if the reduction is
believed to be part of a genuine sale of products which
in the past had been fairly priced.

Institutional advertising
This type of advertising is used to sell the store or
shopping mall as a pleasing place to shop.
The store attempts to reinforce the image of one or
more of the following: a leader in fashion, fair prices,
wide merchandise selection, superior service or
quality, a leisure experience or somewhere to
enjoy visiting.
Co-operative advertising
This is used where manufacturers fund part of a
promotion by supplying leaflets or advertising
material for use by the store.
A manufacturer may agree to share equally the
costs of an advertising campaign.

Retail promotion in relation to that of
manufacturers
Retail advertising is often based upon short-term
objectives with the emphasis on value or price
of the products on offer.
This is unlike manufacturers’ approaches; they
often attempt to build favourable attitudes or
improve the image of the brand or organization
over an extended period of time.
Window displays
Provides a distinctive image for a store, to
promote seasonal activities and merchandise,
or to create interest and capture the attention of
the public.

Retailing Management unit-3 - IMBA Osmania university

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Retailing Management unit-3 - IMBA Osmania university