The retailers are always looking for a new marketing strategy to have a competitive edge in the market and to serve the customers better. Nowadays, there’s a trend for branded products and you’ll find them everywhere across all the departmental stores, discount stores, and mass merchandising malls. That’s why they all look almost the same.
The concept of differentiating your product/service is diminishing. The number of off-prices and discounted stores is increasing, and mainstream shopping malls are cutting down their services. The customers, on the other hand, have become price-conscious because they’re realizing that all the brands are almost similar with a little difference.
That’s why retailers have a great challenge of marketing decisions to face in terms of positioning and target marketing, product assortment, place, service, and price.
Retailer Marketing Decisions
Today, we will discuss 5 major retailer marketing decisions with examples.
Target Market and Positioning Decision
One of the most important retail marketing decisions that retailers make is to define their target audience, and then they would be to decide their position in the market. You have to know whether your target audience wants variety, low price, quality, convenience, or features. Without creating a profile of your target market, you can’t make decisions about service, advertisement, product assortment, and pricing that impact your position.
Retailers follow the simple rule of offering a wide variety for everyone without targeting anyone. They end up not satisfying anyone. On the other hand, smart retailers have a good market position because they target their market well.
For instance, Leslie H. Wexner started a store “The Limited” in 1963 focusing the young fashion-oriented women. The color, music, outlook, and clothing assortment were focusing on a particular audience. He went on opening up a new store because of the success of the store. Their target audience didn’t remain young 10 years later. They opened up a new store “Limited Express” to target the new young audience of a different generation. The Limited brand opened up many stores over the years and earned billions of dollars of revenue.
Product Assortment and Service Decision
The retailers should keep in mind the three variables when they make product decisions like product assortment, service mix, and store atmosphere. We’ll discuss them one by one in detail, they’re as follows;
The product assortment of the retail shop should be according to the needs and expectations of the customers. For instance, the narrow and shallow product assortment of a small restaurant like a cafeteria, or the wide and deep product assortment of a big restaurant, or you can offer the product assortment of quality products. It is because customers aren’t only interested in the product choices, but they also want the quality of choices.
It doesn’t matter whatever quality level or product assortment you use, there would always be competitors. Therefore, you have to look for unique and creative ways to differentiate yourself. You can follow different product differentiating strategies.
For instance, you can launch your brand at your store with designer clothes and your special merchandise at your store.
For instance, “The Limited” brand used to obtain exclusive rights from the designers and labels and offer their clothes at its stores. The “Bloomingdale” brand use to run different shows focusing on features of products of different countries. The “Loehmann” used to launch a surprise product assortment of closeouts and overstocks.
Some retailers offer a “service mix” to their customers along with the sale of products. They offer free home delivery, conversation, and credit that most stores avoid. If you offer a “service mix” at your store, it would help you to differentiate your store from the non-price competition.
The “store atmosphere” also plays an important role. It’s because every store has a different interior design, layout, and interior setting that makes it easy, difficult, or comfortable for the visitors. In other words, every store has different vibes. Therefore, the retailers should also plan the atmosphere of the store that it should be according to the moods of the target market.
The price decision is also very important to retailers. It involves many factors like product assortment, competitors’ prices, and relevance to the target customers. The main purpose focus of all retailers is to increase the market share and charge more. But they don’t often go hand in hand. It is because if you charge more, then you’ll receive less market share. If you charge less, then you would increase the market share.
For instance, TJ Maxx band used to provide discounts to the customers and sell a high volume of products.
The usage of the right promotional tools, it’s also an important decision for retailers. Those promotional tools are advertisements, public relations, sales promotion, and personal selling. Whether you should run an advertisement campaign on TV, newspaper, radio, direct mail, or magazines, or you should start personal selling. The personal selling would require training of the sales personals of using the right words, how to greet, talk, dress, and behave.
If you want to use public relations tool, then it would involve speeches, organizing events, the opening of the store, public service activities, magazines, newsletters, and special events. If you want to use sales promotion, and then it would involve inviting celebrities, displaying billboards, and involving contests.
There are three factors that all retailers must keep in their minds for the success of their business. They are location, location, and location. It means that the location plays a significant role to attract customers. The cost you spent on the location of the building would have a great impact on the profitability of the business.
The big retailers have resources and expertise, and they use advanced methods to select the building. On the other hand, small retailers have limited resources and they have to settle for the location wherever they can get. For instance, brands like Walmart choose the location of its stores near the small markets of the populated rural areas and it’s the main reason behind its success.
After reading the article, we have realized that several factors like targeting marketing, promotional, price, and place decision impact the decision of retailers.