Retail Institutions by

Store-Based Strategy
Mix
 Chapter Objectives
To describe the wheel of retailing,
scrambled merchandising, and the retail
life cycle and to show how they can help
explain the performance of retail strategy
mixes
To discuss some ways in which retail
strategy mixes are evolving
To examine a variety of food-oriented
retailers involved with store-based
strategy mixes
To study a range of general merchandise
firms involved with store-based strategy
mixes

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 Retailer Strategy Mix
• A strategy mix is the firm’s
particular combination of:
store location
operating procedures
goods/services offered
pricing tactics
store atmosphere
customer services
promotional methods

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The Wheel of Retailing

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Retail Strategy Alternatives

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Scrambled Merchandising by a Shoe Store

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 Retail Life Cycle

•Retail institutions pass through

identifiable life stages
 introduction
 growth
 maturity
 decline

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The Retail Life Cycle

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How Retail Institutions Are Evolving

 Mergers, diversification, and

downsizing

 Cost-containment and value-

driven retailing

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Mergers, Diversification, and Downsizing
 Mergers: combinations of separately
owned firms (e.g., Bank of America
and Commerce Bank)
 Diversification: retailers become
active in businesses outside their
normal operations (e.g., Yum! Brands)
 Downsizing: unprofitable stores are
closed or divisions are sold off (e.g.,
Kmart)

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 Prices:
Location:
Average to
Neighborhood
Above average

Atmosphere and
Merchandise: Services:
Medium width Average
and low depth
of assortment; Promotion:
average quality Moderate

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 Location: Prices:
Neighborhood Competitive

Merchandise: Atmosphere and

Extensive width Services:
and depth Average
of assortment; Promotion:
average quality; Heavy use of
manufacturer, newspapers, flyers,
private, & generic brands and coupons

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 Location:
Prices:
Community shopping
Competitive
center or isolated site

Atmosphere and
Merchandise: Services:
Full assortment plus Average
health and beauty aids
and general Promotion:
merchandise Heavy use of
newspapers, flyers

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 Location: Prices:
Community shopping center
Competitive
or isolated site

Atmosphere and
Services:
Merchandise: Average
Full assortment plus
health and beauty aids Promotion:
and general merchandise Heavy use of
newspapers, flyers

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 Location: Prices:
Neighborhood Very low

Atmosphere and
Merchandise: Services:
Low width and depth of Low
assortment; few
perishables; few national Promotion:
brands Little or none

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 Location:
Prices:
Secondary site, often in
Very low
industrial area

Atmosphere and
Merchandise: Services:
Moderate width and Low
low depth of
assortment; emphasis on
manufacturer brands Promotion:
bought at discount Little or none

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 Location: Prices:
Business district or Competitive to
shopping center Above average

Atmosphere and
Merchandise: Services:
Very narrow width and Average to excellent
extensive depth of
assortment; average to Promotion:
good quality Heavy use of displays
Extensive sales force

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 Location: Prices:
Business district, shopping Average to
center or isolated store Above average

Atmosphere and
Merchandise: Services:
Extensive width and Good to excellent
depth of Promotion:
assortment; average to Heavy ad and catalog
good quality use; direct mail;
personal selling

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 Location:
Prices:
Business district, shopping
Competitive
center or isolated store

Atmosphere/Services:
Merchandise: Slightly below
Extensive width and average to average
depth of
assortment; average to Promotion:
good quality Heavy on newspapers;
price-oriented; selling

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 Location:
Prices:
Business district, shopping
Average
center or isolated store

Merchandise: Atmosphere/Services:
Good width and Below average
some depth of
assortment;
below-average Promotion:
to average quality Use of newspapers

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 Location:
Prices:
Business district, shopping
Low
center or isolated store

Merchandise: Atmosphere/Services:
Moderate width and Below average
poor depth of
assortment; Promotion:
average to good quality; Use of newspapers;
low continuity brands not advertised;
limited selling

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 Location:
Prices:
Out of the way site
Very Low
or discount mall

Atmosphere/Services:
Merchandise: Very low
Moderate width and
poor depth of
assortment; Promotion:
low continuity Little

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 Location:
Prices:
Isolated store or
Very Low
secondary site

Atmosphere/Services:
Merchandise: Very low
Moderate width and
poor depth of
assortment; Promotion:
low continuity Little;
some direct mail

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 Location: Prices:
Isolated store Very Low

Merchandise: Atmosphere/Services:
Extensive width and Very low
poor depth of
assortment;
low continuity; Promotion:
variable quality Limited

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