Chapter 5
• Describe
– Wheel of Retailing
– Scrambled Merchandising
– Retail Life Cycle
• Discuss Retail Strategy Evolution
• Examine Store-Based Retail Strategies
– Food-Oriented
– General Merchandise
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Location
Operating Procedures
Goods/Services Offered
Pricing Tactics
Atmospherics
Customer Services
Promotional Methods
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Be Price-Oriented and Cost-Efficient
Be Upscale
Be Convenient
Offer Dominant Assortment
Offer Superior Customer Service
Be Innovative or Exclusive
Provide A Unique Way of Operating
High-Ended Strategy
• High Prices
• Excellent Facilities
and Services
• Upscale Customers
Medium Strategy
• Moderate Prices
• Improved Facilities
• Broader Base of
Value- and ServiceConscious Consumers
Low-End Strategy
• Low Prices
• Limited Facilities and Services
• Price Sensitive Consumers
Low-Ended Strategy
High-Ended Strategy
Low Rental location -- Side Street
High Rental Shopping Center or
Central Business District Location
No Services or Services Charged
at Additional Fee (or Services
May Be Limited to Credit and
Returns
Elaborate Services Available
Included in Price, Such As:
Credit
Decorating
Delivery
Gift Wrapping
Alterations
Layaway
Spartan Fixtures and Displays
Elaborate Fixtures and Displays
Simple Retail Personnel Organization
Elaborate Retail Personnel
Organization
Price Emphasis in Promotion
No Price Emphasis in Promotion
Self-Service or High Sales per Store
Personnel Ratio
Product Demonstrations, Low Sales
Per Store Personnel Ratio
Crowded Store Interior
Spacious Store Interior
Most Merchandise Visible
Most Merchandise in Backroom
Original
Merchandise
Mix
Scrambled
Merchandise
Mix
Accelerated
Innovation Development
Maturity
Decline
Number of Competitors
Accelerated
Innovation Development
Very Few
Very Few
Moderate
Maturity
Many Direct
Moderate Indirect
Decline
Moderate Direct
Many Indirect
Growth/Profitability/Duration
L
Accelerated
Innovation Development
Very Rapid
Very
Few
Low to
Moderate
3-5 Years
Rapid
High
8 Years
Maturity
Moderate to Slow
Moderate
Indefinite
Decline
Slow or Negative
Very Low
Indefinite
Investment/Growth/Risk Decisions
L
Accelerated
Innovation Development
Investment Min
Very
Few
High
Risk
Accepted
Investment High
to Sustain
Growth
Maturity
Decline
Tightly Controlled Growth Marginal Capital
in Untapped Markets
Expenditures, &
Only if Necessary
Central Management Concerns
L
Accelerated
Innovation Development
Maturity
Concept Refinement Establishing a
Excess Capacity &
Very Few
Through Adjustment
Preemptive
Overstoring; Prolonging
& Experimenting
Market Position Maturity & Revising the
Business Concept
Decline
Engaging in a
Run-Out
Strategy
Use of Management Control Techniques
Accelerated
Innovation Development
Minimal
Very Few
Moderate
Maturity
Decline
Extensive
Moderate
Most Successful Management Style
Accelerated
Innovation Development
Entrepreneurial
Very
Few
Centralized
Maturity
Decline
Professional
Caretaker
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Mergers
Diversification
Downsizing
Cost Containment
Value-Driven Retailing
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Convenience Store
Conventional Supermarket
Food-Based Superstore
Combination Store
– Supercenter
– Hypermart
• Box (Limited-Line) Store
• Warehouse Store
• Specialty
– Category Killer
• Traditional Department
Store
• Full-Line Discount Store
• Variety Store
• Off-Price Chain
• Factory Outlet
• Membership Club
• Flea Market
• How the Wheel of Retailing,
Scrambled Merchandising, and Retail
Life Cycle Help Explain Performance
• The Evolution of Retail Strategy Mix
• The Nature of Store-Based Retailers
– Food-Oriented
– General Merchandise
Questions?