5HG011

International Retail Design

Session 6
Marketing in Retailing
Organisations

The aims of this session are to:

Define retailing and marketing
Explain the meaning and concept of marketing and its
practices in retail organisations
Review the concept of marketing for retailers
Review the elements of retail management mix.

Definition of Retailing
The term retailing is derived
from the old French word retailler,
meaning a piece of or to cut up.

Omar, (1999), suggests retail is:

any business that directs its marketing efforts towards
satisfying the final consumer based upon the organisation of
selling goods and services as a means of distribution.

Marketing in Retail:

A retailers products and services must relate to

their target markets and attract customers to buy
on the basis of their performance and price
Kent and Omar (2003:153)

What attracts customers

to buy in your
spa/salon?
Who are your target
markets?
*More on marketing,
segmentation
and positioning
next week

Large and increasing

contribution to
Gross Domestic Product (GDP)
Organisations
growing on an
international scale

Retailers diversifying
their activities

Growing Importance
of Retail Sector
Major employer
Blurring of areas of retail
to include wider areas
of business activity

Size of operation
allowing for supply
chain control.

Structural trends in European retailing

Increase dominance of retailers over suppliers
Increasing market share held by multiples and
associated loss by independents and cooperatives.
Technical superiority of the big players providing
cost-effectiveness

Marketing in Retail Organization

The Chartered Institute of Marketing (CIM) (2010)
defines marketing as:
the management process responsible for
identifying, anticipating and satisfying customer
requirements profitably.
Marketing philosophy is the acceptance of the
customer as king - Discuss

Marketing is therefore:

A management function
It organises and directs
It has a function of conversion
It deals with consumer purchasing power
It deals with consumers or users
It achieves the profit target or other objectives.

Marketing Functions - Obtaining demand via:

Personal selling
Price and pricing

Advertising

Sales promotion

Store location
Product planning

Customer segmentation

Merchandise display
*Consider these
for Ass 2

Marketing practices -Activities at operational

level:

Collect information
Make operational decisions
Implement operational strategy
Manage store operations
Manage human resource
Manage store-level resources

Retail marketing mix

Store location
Merchandising
Store ambience
Customer service
Retail pricing
Retail integrated communications
Personal selling
Store image
Sales incentives

Role of competition in retailing

Retailing is more competitive than most other sectors and
retail competition is multidimensional i.e., 5 levels
1st level product, services, communication, and physical
distribution.
2nd level related to retail organization and its horizontal
competitors.
3rd level other retail organization and the vertical
competition.
4th level deals with geographical dimensions including
location and shopping environment.
5th level nature of the marketplace.

Dimensions of Change in retail competition

Retail competition has been changing along spatial,

institutional and functional dimensions.
Spatial dimension retailing follows population
trends.
Institutional dimension both large and small firms
are engaged in retail competition.
Functional dimension takes two dimensions e.g.
price competition; and non-price competition.

Retail concentration
High concentration of retail competition could be attributed to
ease of entry.
High profit in retailing invites competition and resulting in high
concentration.
Large firms taking over smaller firms leads to polarisation and
concentration.
Government policies and regulations favouring large firms and
less favourable to smaller firms lead to concentration.
Consumers willingness to accept process foods and
innovative products helped build retail concentration.

Gaining competitive advantage

(differentiation)

Competitive advantage occurs when an

organization acquires or develops an
attribute or combination of attributes
that allows it to outperform its
competitors.

Tutorial
It is the effective blending of all the retail marketing mix
activities within the retail organization that determines the
success of retail marketing management.
Task
In your group, prepare in summary form for class
presentation how these retail marketing mix activities could
be blended for effective retail marketing management.

References

Omar, O. (1999), Retail Marketing, London:

Financial Times / Pitman. Ch.1.
Kent, T. and Omar, O. (2003), Retailing,
Basingstoke: Palgrave, Ch. 1 and 2.