Professional Documents
Culture Documents
Buying Roles (Blackwell et al 2000) THINK IAMDDB +S4U>>> take out the IAM & S4
Gender
For Women- Brown (1995) argues that romantic fiction can be found as
something that influences the consumer behaviour of women (the confessions
of a shopaholic, Devil Wears Prada)
For Men- Hardie (2012) argues that men love to have bought something.
However, they don’t like the process. Subtle difference but an important one.
Overall- 31% of men often bought from the first shop they visited, in
comparison to 23% of women, suggesting that women shop around more
before making purchases (Shoppercentric, 2013).
Millennial Consumers
1980-2000
Potential Question: What are the early Millennials and the late Millennials
and is this distinction relevant to retail?
Characteristics of millennials
Hierarchy of Needs – must haves for millennials are different, not as important
as previous generations (rent over owning)
Brands and Retail (Millennials)
They’re also the first generation of digital natives, and their affinity for
technology helps shape how they shop. They are used to instant access to
price comparisons, product information and peer reviews.
Beyond the Brand, Power of Social, Click to Buy, Searching For Value
Wellness (Millennials)
Finally, they are dedicated to wellness, devoting time and money to exercising
and eating right. Their active lifestyle influences trends in everything from food
and drink to fashion.
These are just some of the trends that will shape the new Millennial economy.
Criteria:
Actionable (what actions to take to satisfy needs)
Identifiable (determine which customers are in the market segment)-
size and whom to target
Substantial
Reachable
Approaches:
GEOGRAPHIC (country)
DEMOGRAPHIC (gender, age, marital status)- H&M divided, Zara TRF
PSYCHOGRAPHIC (personality traits, interests)-harley davidson-
freedom to conquer open road
BEHAVIOURAL (toothpaste white/sensitive- needs >> first time user or
nah)
VALS Framework - tool for lifestyle/psychographic segmentation (mainly)
and demographic REMEMBER I(TBASEM)S
Survey
Classified into eight segments
This is based upon level of resources (horizontal) and motivation
(Vertical)
High resources=high innovation & Low resources=Low innovation
Firms find lifestyle segmentation is more effective than
demographic segmentation
Retail marketing tends to find a BALANCE between the two types of needs
Hierarchy of Needs
Behavioral segmentation
Seeking adventure
Socializing
Seeking satisfaction
Searching for ideas
Buying for others
Searching for value
Competition Assortment
Price positioning Leader lines
Penetration pricing Price lining
Skimming pricing Odd-even ends
Price matching Price bundling
Economics
Cost and Demand
Price Elasticity
Retail Margins
Locations Time
Internet prices Special offers
Local price flexibility Seasonal sales
Prices for store formats Everyday low prices
International prices Price auctions
Middle Market- covers a large range of prices in between these extremes e.g.
DKNY
Luxury Market- Expensive goods that can be referred to designer goods e.g.
Loubs
Price Architecture
Once a retailer has established which price level to adopt, the specific range of
prices within the level should be decided upon
Price architecture is defined as the retailer’s offer of more than once price
level in order to appeal to different types of customer or occasion.
1. Transaction and basket data – retailers can analyse and rank order
category and item-level performance, including sales and number and
size of baskets, including item, elasticity and market share
2. Shopper price-perception data- through primary research, retailers can
identify the categories and items that most drive value perception
3. Merchant Judgement- experienced merchants can then review and add
strategic items with high degree of competitive intensity (that is, where
competitors’ space allocation or marketing spending is high).
How the new digital retail era has changed the game
Categories of pricing
Cost-oriented pricing
Competition-oriented pricing
Strategies
Price elasticity- the degree to which changes in price affect the quantities
of products purchased by customers
Black Friday
Blue cross sale
Varley 2006 states that if the product range and the outlet work in harmony,
the retailers’ positioning strategy is reinforced but if they work in conflict, the
positioning will be unclear to customers, who will become confused and
disappointed.
Zara’s store design concept is centered on four key principles that Zara maintain
definitively represent its core values; beauty, clarity, functionality and sustainability.
its implementation of industrial lightings, exposed ceilings and brushed concrete walls
(Saunter, 2015); (Dennis, 2015). Space between clothing rails reveals the building’s glass
exterior, designed to create a personal connection between the store and the outside
street (Saunter, 2015). Spotlighting and a neutral backdrop help the product to take center
stage, which is exhibited in the retailer’s signature outfit merchandising concepts (Saunter,
2015). In addition, the design of the store is fully sustainable, with energy consumption
being slashed by 30% than that of a convenience store, epitomizing Zara’s unwavering
commitment to sustainability, which customers expect from them (Saunter, 2015); (Dennis,
2015). This is presented in the form of speed-controlled mechanical escalators
Visual Merchandising- a proactive, integrated retail atmospherics approach
aimed to create a certain look, properly display products, stimulate shopping
behaviour, and enhance physical behaviour (Bernan and Evans, 2010)
Includes-
Exterior design:
Interior Design
Store Layout
Racetrack/Boutique Layout
Loop with a major isle that has access to departments and stores
multiple entrances
Draws customer around store
Provides different site lines and encourages exploration (impulse
buying)
Used in department stores e.g. Selfridges, Debenhams, John Lewis
Freeform Layout
Retail Atmosphere
4 Elements
Strategy:
1. Determine promotional objectives
2. Establish overall promotional budget
3. Select promotional mix
4. Implement promotional mix
5. Review and revise the promotional plan
PUSH- A push promotional strategy involves taking the product directly to the
customer via whatever means, ensuring the customer is aware of your brand
at the point of purchase. E.G. point-of-sale displays, personal selling,
packaging design
PULL- A pull strategy involves motivating customers to seek out your brand in
an active process.
Purpose is to inform and remind the target customer the retailers are in
the area>>guerrilla marketing e.g. Pespsi Way, Colgate
Select the main focus for the visual elements of press advertising through any of
these ways
Forms of Communication
Retailers must constantly review and if essential adapt their product range in
line with their customers’ changing requirements. Therefore, there is a need to
have a sufficient level of understanding of who their customers are, what their
product preferences are, and how their consumption needs and desires change
over time.
Buyers
Coordinators
Users
Initiators
Influencers
Decision-makers
Category management has been defined as ‘the strategic management of
product groups through trade partnerships, which aims to maximize sales
and profits by satisfying consumer needs’ (IGD, 1999).
Products are put into groups that are carefully defined according to consumer
shopping behaviour. All products within a category can be managed using a
strategy that is specifically formulated for that group of products.
Trade partnerships
Suppliers play a very active role in the management of the product group.
The performance of the product group (sales and profits), but by linking this
performance to consumer satisfaction. Long-term performance objectives can
only be reached if consumer needs, both for products and in the shopping
process, are met.
• Routine
• Seasonal/Occasional
• Convenience
• Destination
• Narrow/deep vs. Broad/shallow Product line
• H&M vs. Zara (broad is more expensive and relies on sale of more
merchandise) while narrow is cheaper, more concentrated, leads to higher
profits
• HARRODS (DEEP AND WIDE)
• Scrambled product assortment
PLC
A concept suggesting that a product goes through various stages in the course
of it’s life: introduction, growth, maturity and decline.
CRITICISM
Can create an emotional tie with customers that build their trust and
loyalty
Facilitates store loyalty because it stands for a predictable level of
quality
Price led
All about atmosphere
Ideas led
Price plus
The entirety of this product development cycle begins with market research. This includes
visits to university campuses, feedback from stores and sales reports and observations in
locations such as clubs, discos and similar settings where many fashionable individuals are
likely to be in attendance. Consequently, this means that Zara has needed to invest heavily in
information to technology in order to be able to keep-up-to-date with the latest information
on trends and consumer decisions. Next, this information is received and effectively analysed
at Zara headquarters. Once this occurs, commercial teams work simultaneously with design
teams, utilizing this information to create new lines and revamp old ones- determining the
fabrics, cut, and price points of a new garment. Once these decisions are finalised, the
necessary resources and materials are obtained based upon availability and the garments are
then produced, as opposed to waiting for certain materials to come before producing, and
thus improving efficiency of production. Finally, with state-of-the art technology (optical
devices, trackers) the products are distributed to the specific stores.