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RETAIL MARKETING
LECTURER: VALERIA VOLPONI Valeriaelisabetta volponi@gmail com Valeriaelisabetta.volponi@gmail.com

Practical informations
Lessons: every Wednesday, from One

2 p.m. to 5 p.m.

exception: November the 23th, the lesson is dedicated to a RETAIL TOUR in Milan lesson is November the 30th

Final Last

week of the course examination week - is the first week of December

Practical informations
15

minutes break

Suggested

readings: Retail marketing, by Ogenyi Omar, Financial Times Pitman Publishing at Amazon and Libreria Hoepli, Milan

Available Lessons

uploaded on ESE portal, the following

week

Practical informations
Two

assessment sessions term examination: November the 2nd to answer & case study to analyze

1. Mid

Questions

Practical informations
2. Final Group Real Final Last

project

written project

case study to analyse and plan project is due on November the 30th

week of the course: oral presentation in class

Basic rules
Do

not show up late in class

Participate Do

your homework

A very important rule on Final Exam

On

the Oral Presentations day, student must stay in class until the end of all presentations leaving before will be penalized

Those

Course contents
What

is retail marketing

History

& evolution of fashion and design distribution & Architecture

Location Product

selection, buying & merchandising management the store environment

Understanding

Course contents
Visual

merchandising design, signage & graphics

Window The

role of technology & digital signage purchasing behaviour

Consumers On

line and off line & more

Promotion, Promotion advertising

Aims of the course

Know

the elements of retail marketing the relationships between the variable the basic model of consumer

Establish

elements
Understand

behaviour
Design

the perfect store for your target

Our perspective
Technical Wide Attentive Focused

but also very concrete

to external influences

on the global context

A few examples

A few examples

Be careful. careful
Fast

fashion vs haute couture? vs local? or little grocery stores?

Global

Hypermarkets Safety

or surprise? or not?

Loyalty

Be careful. careful
Fast

fashion vs haute couture?

Be careful. careful
Fast

fashion vs haute couture?

Be careful. careful
Hypermarkets

vs grocery store?

Be careful. careful
Hypermarkets

vs grocery store?

Be careful. careful
Safety

or surprise?

Be careful. careful
Safety

or surprise?

Be careful. careful
Loyalty

or not?

What is retail? Retail its hard to define

Stores Distribution Supply

channels

chain & logistics

Architecture Experience

Retail that works

The

prosperous retail organisations are those that: AHEAD

THINK MAKE

POSITIVE EFFORTS TO ANTICIPATE CHANGES AN ORGANISATION CAPABLE OF RECOGNISING AND EVALUATING BUSINESS OPPORTUNITIES AHEAD OF THEIR OPPORTUNITIES.AHEAD COMPETITORS

DEVELOP

Don t underevaluate retail Dont marketing

Retail

marketing influences our daily lives in our

roles:

AS CONSUMERS AS SHOPPERS

Don t underevaluate retail Dont marketing

It

encompasses a wide range of activities

Environmental analysis surrounding the retail industry market research analysis

Retail

Consumer Product

planning.

THE ROLE OF RETAIL MKTING CHANGES IN EACH NEW RETAILING SITUATION

Marketing & retail

What

is marketing?

The concept of presenting goods which people want, in the manner and place in which they are required the aid of packaging, promotion, pr

With At

the right price

Marketing & retail

When Ever

was marketing born?

since people started to barter the surpluses they had accumulated, that was marketing (Kotler) 60s, marketing in its modern form and more sophisticated

The

More

Marketing & retail

When

was RETAIL -marketing born?

When

there had been a shift in power from THE MANUFACTURER to THE RETAILER, in the early 80s 80 s (McGoldrick) was the moment in which most own label activities ti iti started t t dt to grow as a part t of f retailers t il t two pronged strategy: MARGINS G S FROM THE

That

IMPROVE O THEIR

DIFFERENTIATE THEMSELVES

COMPETITORS

The essence of retail marketing

The In

key aspect of retail mkting is an attitude of mind taking marketing decisions, the retail manager looks at the situation from the viewpoint of the customer d decisions i i will ill thus th b be d driven i b by what h t th the customer needs and wants most difficult iffi part of f retail i mkting, i but the key to its success, is the ability to adopt the customers customer s viewpoint

These Th The

Retail has changed

Los Angeles, 1927

Retail has changed

Los Angeles, 1927

Retail has changed

Retail has changed

Paris, Les Halles, 1850

Retail has changed?

Retail has changed?

Retail has changed?

How does retail change?

4

theories to explain retail institutional changes:

THE WHEEL THE

OF RETAILING

DIALECTICAL PROCESS LIFE CYCLES SELECTION

RETAIL

NATURAL

1 The wheel of retailing 1.

The wheel of retailing

Proposed Changes

by Mc Nair (1957)

in retail institutions move in circle, consisting of three phases: Innovation Up

Entry

Trading

Vulnerability

The wheel of retailing

The

repetition of these phases creates a pattern of continuous movement - INNOVATION

1. ENTRY

A new retail institution enters the market at the lower end of the shopping opportunity differential advantage over existing competitors is its LOWER PRICE

Its

The wheel of retailing

Lower

price is obtained through COST CONTROL

STRICKT

Which means: limiting store services, services locating at low rent sites, and even lowering store standards and merchandise quality innovator sometimes sacrifices profit margins in comparison to those of its established competitors

The

The wheel of retailing

2. TRADING If

UP

the innovation succeeds, emulators copy it over time and increase the level of COMPETITION In response to competitive pressure, the stores add services and improve quality, to overpass their vulnerability

3. VULNERABILITY

This creates the opportunity for new institutions to enter at the lower end of the shopping opportunity line, and the cycle continues

2 The dialectical process 2.The

It

views retailing as an evolutionary system

The

different retail institutions adapt to each other, in the process generating new retail formats When challenged by a competitor with a differential advantage, an established institution will adopt strategies and tactics in the direction of that advantage, thereby negating some of the innovators attraction

The dialectical process

The

new institution then modifies its strategy to maintain its competitive advantage mutual adaptations gradually move the two retailers together in terms of offerings

These

merchandise

service

price

The dialectical process: an application

The

emergence of the DISCOUNT department store

The dialectical process

3 Retail life cycles 3.Retail

Retail life cycles

This

model states that retail institutions pass through a life cycle that can be divided into four stages

INTRODUCTION GROWTH MATURITY DECLINE

Retail life cycles

New

types of retail institutions first appear at the introduction or innovation stage Stores (1860)

Department

Fast food (1950) this stage the new retail concept has a marked competitive advantage over conventional stores based on price price, merchandise assortment, convenience or a new approach to sales & promotion

During

Retail life cycles

The

competitive advantage pushes the institution into the second stage of life cycle, cycle which is characterised by growth in both sales and profits stage is also marked by the emergence of new competitors who imitate the original concept)

(This

As competition increases, firms expand their chains geographically to reach new market and increase sales

Retail life cycles

The

stage of rapid growth is inevitably followed by one of maturity when the speed of market growth slows and sales start to stagnate final stage is the decline: sales and profits are can be avoided by REPOSITIONING low

The

Failure

4 Natural selection 4.
Charles

Darwins theory of the evolution of the species: the survival of the fittest to this working hypothesis, retail institutions may lose their relative positions or disappear No retail institutions is sacred fittest will survive

According

The

The role of competition

Retailing

is more competitive than most other aspects of marketing, marketing because at the retail level MULTIDIMENSIONAL COMPETITIONS exists

We can identify five levels of retail competition

The role of competition

The retail marketing mix

Marketing

mix is a term used to describe the various elements and methods required to formulate and execute marketing strategy

Product, price, place, promotion Store

location assortment

Merchandise Store

ambiance service i

Customer C t

The retail marketing mix

Customer Customer Personal Store Sales THE

service communications

selling

image incentives

AIM IS FOR EACH STORE TO HAVE A DISTINCT RETAIL IMAGE IN CONSUMERS MINDS

The retail marketing mix

An

appropriate retail marketing mix creates a retail personality that will generate: trust

Seller-buyer Customer Goodwill Sales

loyalty

The retail marketing mix

Its It s coffee time

The variable elements of retail marketing mix

STORE

LOCATION decisions are based upon:

Shopping Ease

of access parking space time

Available

Travelling

The variable elements of retail marketing mix

MERCHANDISE The

nature of merchandise the store offers may depend on the customer expectation and the stores perceived image of itsself assortment defines the store stores s competitive advantage the other marketing variables are shaped by the nature of merchandise assortment

Merchandise

All

The variable elements of retail marketing mix

STORE This

AMBIENCE

is the atmosphere or the experience that the retailer wishes to convey

The variable elements of retail marketing mix

CUSTOMER Its

SERVICE

extent may depend upon the expectations of the shoppers some groups of customers, the range and depth of services offered by the store may be the key incentive to patronage and their continuous loyalty

For

The variable elements of retail marketing mix

PRICE Brand

price can be seen as the signature of brand quality the absence of other variable marketing cues, price may be used as a surrogate to perceived quality and value for money

In

The variable elements of retail marketing mix

COMMUNICATION Its

role is to make customers aware of the stores offerings and to integrate the activities of merchandise display, internal signs, advertising and personal selling

The variable elements of retail marketing mix

PERSONAL Remains

SELLING

a very important element of the retail marketing mix in some sectors, especially where products are relatively complex, expensive and infrequently purchased predominantly self service stores, they help to guide shoppers in their brand selection

In

The variable elements of retail marketing mix

STORE Many

IMAGE

retailers have developed particular images that they consider to be assets

The variable elements of retail marketing mix

SALES Most

INCENTIVES

retailers now offer store cards and loyalty schemes as an added inducement to patronise their store

The variable elements of retail marketing mix

In class-assignment
The You

problem:

work for FOREVER 21: an American fast f hi retailer, fashion t il selling lli clothes, l th accessories, i shoes h to young girls 15 to 35 yrs intend to establish a new store in Milan

You The

company has not regarded marketing as an important area of its international operation recognise i th the i importance t of f marketing k ti in i contributing the companys successful development

You Y

In class-assignment
The

task:

Using

international retailers which, in your opinion, have got their retail marketing right as examples a report for your company director (me)

Prepare Explain

how your organisation could benefit from adopting a retail marketing philosophy of the customer is king (putting the customer at the forefront of every operation)

HOMEWORK
The

task: your favorite store

Choose Write

down its characteristics following the list of the variable elements of the retail marketing mix location, merchandise, store image, sales incentives, personal selling, communication, price, customer service, service store ambiance

Store