Source: Mc Graw Hill Education.

All Rights Reserved, 2019

CHAPTER 4:

RETAILE MARKET STRATEGY

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

 4.1 WHAT IS A RETAIL STRATEGY
Identifying:

(1) The retailer’s target market [market segment]

(2) The format resource [retailer’s operations] the retailer

plans to use to satisfy the target market needs

(3) The base on which the retailer plans to build

sustainable [maintain over its competition] competitive
advantage.

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.2 CENTRAL CONCEPTS IN A RETAIL
MARKET STRATEGY
4.2.1 Target market and retail format

+ Retail market segment: group of similar needs customers;

+ Retail format: similar retail channels and format/operations to

satisfy its customers’ needs [market segments];

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.2 CENTRAL CONCEPTS IN A RETAIL
MARKET STRATEGY
4.2.2 Building a Sustainable competitive advantage

+ Building a Sustainable competitive advantage: the

final element in a retail strategy;

Focus on [satisfy] its present and potential customers over its

competitors [in market segments]  consider as a “wall around its
battle position”;

Some necessary advantages are sustainable over a long time;

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.2 CENTRAL CONCEPTS IN A RETAIL
MARKET STRATEGY
4.2.3 Relationship with Customers–Customer Loyalty

+ Customer Loyalty: committed to buying merchandise &

services form particular retailers;

+ Brand image: developing a well-known, attractive image of their

brands [fast food  McDonald’s]  strong brand image: customer
loyalty  reduce the risk associated with purchases!

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.2 CENTRAL CONCEPTS IN A RETAIL
MARKET STRATEGY
4.2.3 Relationship with Customers–Customer Loyalty

+ Customer Loyalty: committed to buying merchandise &

services form particular retailers;

+ Positioning: brand image reflects its positioning strategy  design

and implementation of a retail mix to create an image in customers’
mind [relative to competitors]  perceptual map is applied to
represent customers’ image!

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.2 CENTRAL CONCEPTS IN A RETAIL
MARKET STRATEGY
4.2.3 Relationship with Customers–Customer Loyalty

+ Customer Loyalty: committed to buying merchandise &

services form particular retailers;

+ Unique merchandise: develop private-label brands [store

brand/own brand]  create an image  improve customer loyalty!
[# popular national brands, most competitors can offer]

+ Customer service: offering excellent customer services

[consistently offering good services]  improve customer loyalty!

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.2 CENTRAL CONCEPTS IN A RETAIL
MARKET STRATEGY
4.2.3 Relationship with Customers–Customer Loyalty

+ Customer Loyalty: committed to buying merchandise &

services form particular retailers;

+ Customer relationship management programs: called Loyalty or

Frequent-shopper programs [identify/customer shopping behavior &
develop loyalty]  offering customer rewards based on the value [$]
they purchase! [better than the discounts offering]

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.2 CENTRAL CONCEPTS IN A RETAIL
MARKET STRATEGY
4.2.3 Relationship with Customers–Customer Loyalty

+ Customer Loyalty: committed to buying merchandise &

services form particular retailers;

+ Building a retail community using social media: website or social

media popular application for group of customers [forum, retailer’s
Facebook page]  [sharing information, shopping experiences Q/A]

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.2 CENTRAL CONCEPTS IN A RETAIL
MARKET STRATEGY
4.2.4 Relationship with Suppliers

+ The second approach for gaining a competitive

advantage: strong relationship with companies that provide
merchandises & services [supplier sources long-time confirm]

 [this relationship shares sensitive/necessary information or data];

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.2 CENTRAL CONCEPTS IN A RETAIL
MARKET STRATEGY
4.2.5 Efficiency of Internal Operations

+ More efficiency of Internal Operations: cost advantage

over competitors [retail format/operations]

+ Human resource management: a labor-intensive business [a major

role providing services to customers and building customer loyalty]

+ Distribution and information systems: a sophisticated distribution

and information systems reduce operating costs [offering
opportunity]

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.2 CENTRAL CONCEPTS IN A RETAIL
MARKET STRATEGY
4.2.6 Location

+ the most pervasive form of advantage in retailing:

(1) the most important factor determining which store customer
patronize

(2) a sustainable competitive advantages [it is not easy duplicated]

4.2.7 Multiple Sources of Advantage

+ the multiple approach better relying on single approach:
sustainable competitive advantages for a long time
GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy
 4.3 GROWTH STRATEGIES
4.3.1 Growth opportunities
TARGET MARKET
Existing Existing New
RETAIL FORMAT

Market penetration Market expansion

Format Diversification
New

development (unrelated/related)

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.3 GROWTH STRATEGIES
4.3.1 Growth opportunities

+ Market penetration: directed toward existing customers

using the retailer’s present retailing format [new customers/current
ones buying more merchandises]

One more approach: opening more stores in target market and/or

keeping existing stores open for longer hours!

Other approach: training sale-people to cross-sell [increase impulse

purchase].

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.3 GROWTH STRATEGIES
4.3.1 Growth opportunities

+ Market expansion: using existing retail format in new market

segments

+ Retail format development: developing new retail format

[with different retail mix for the same target market]

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.3 GROWTH STRATEGIES
4.3.1 Growth opportunities

+ Diversification: introduce new retail format directed toward

market segments [not currently served by the retailer]

Related diversification growth opportunity: present market segment

& retail format share something with new opportunity

Unrelated diversification: little commonality between retailer’s

present business & new opportunity

Vertical integration: diversification by retailers into wholesaling or

manufacturing.
GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy
4.3 GROWTH STRATEGIES
4.3.2 Growth opportunities & Competitive advantage

+ Present retail operations & market: greatest competitive

advantage & most success [effectively internal operations & retail
format]

+ Market expansion opportunities: building advantages in

operations & format [retailer’s relationship & present customers’
loyalty]  apply them in new market [lack of experience or
operating skills in new format  less opportunities]

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4.4 GLOBAL GROWTH STRATEGIES
4.4.1 Attractiveness of international markets

+ the potential size of the retail market in the country

+ the degree to which the country does & can support
the entry of foreign retailers engaged in modern retail
practice

+ the risks or uncertainties in sales and profits

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4. GLOBAL GROWTH STRATEGIES
4.4.2 Keys to success in Global retailing

+ Globally sustainable competitive advantage: building

on retailer’s core bases of competitive advantages [culture,
increasing access via internet, social media] [most
successful expansion opportunities].

+ Adaptability: recognizing culture differences and adapt

their core strategy [social norms]  [government regulations &
culture value affect store operations].

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4. GLOBAL GROWTH STRATEGIES
4.4.2 Keys to success in Global retailing

+ Global culture: retailers think globally [transplant a home-

country culture & infrastructure to another countries] [global
management structure of regional committees].

+ Financial resources: difficult to generate short-term

profits when transition to global retailing  [long-term
commitment & considerable up-front planning].

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4. GLOBAL GROWTH STRATEGIES
4.4.3 Entry strategies

+ Direct investment: retail firm invests in & owns a retail

operations in a foreign country [highest level of investment]
[greatest risks, but highest potential returns].

+ Joint venture: with local retailers  ownership, control,

and management are shared [sharing financial burden, local
sources, market]  [reduce the entrant’s risks].

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

4. GLOBAL GROWTH STRATEGIES
4.4.3 Entry strategies

+ Strategic alliance: collaborative relationship between

independent [direct investment application, independent firms
facilitate local activities].

+ Franchising: lowest risks, least investment but lowest

potential returns  [limited controls, split potential profits with
franchisee].

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

5. THE STRATEGIC RETAIL PLANNING
1. Define the business mission PROCESS
2. Conduct a SWOT analysis:
+ Internal environment [strengths & weakness]
+ External environment [opportunities & threads]

3. Identify strategic opportunities 4. Evaluate strategic opportunities

5. Establish specific objectives & allocate resources

6. Develop a retail mix to implement strategy

7. Evaluate performance and make adjustments

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy
5. THE STRATEGIC RETAIL PLANNING
PROCESS
5.1 S1. Define the business mission

The mission statements: description of a retailer’s

objectives & scope of activities it plan to undertake

+ What type of business we are ?: [retail industry,...].

+ What do we need to do to accomplish our goals &

objectives?:  [which resources,..]

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

5. THE STRATEGIC RETAIL PLANNING
PROCESS
5.2 S2. Conduct a SWOT analysis

Internal environment: identify the retailer’s strengths and

weaknesses [unique strategic capabilities: Assets, knowledge
and skills,...].

External environment: identify the retailer’s opportunities

and threads [positive or negative effect R’s performance:
market, competition & environment dynamic,...].

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

5. THE STRATEGIC RETAIL PLANNING
PROCESS
5.3 S3. Identify strategic opportunities
Identify opportunities for increasing retail sales [growth
opportunities].

5.4 S4. Evaluate strategic opportunities

Determine R’s potential to establish a sustainable competitive
advantages & reap long-term profits [both strengths &
weaknesses factors consideration].

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

5. THE STRATEGIC RETAIL PLANNING
PROCESS
5.5 S5. Establish specific objectives & allocate
resources
Establish specific objectives [1/ The performance sought; 2/.
Time frame for achieving the goal; 3/. The level investment to
achieve the objective].

5.6 S6. Develop a retail mix to implement strategic

Develop a retail mix for each opportunities [control & evaluate
performance].
GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy
5. THE STRATEGIC RETAIL PLANNING
PROCESS
5.7 S7. Evaluate performance & make adjustment
Evaluate the result the strategy & implementation program
[change or adjust if necessary].

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy

 Key Terms

Cross-selling/customer loyalty

Diversification growth opportunity

Frequent-shopper program/Joint venture

Market expansion growth opportunity

Market penetration growth opportunity

Mission statement/SWOT analysis

Retail strategy/Retail format/Retail market segment

Related/Unrelated diversification growth opportunity

GV: Đường Võ Hùng: Retailing Management/C4: Retail market strategy