1. Retail Institutions by Store-Based
Strategy Mix

2. 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, and
promotional methods
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3. Earning Destination Retailer Status
 Be price oriented and cost efficient
 Be upscale
 Be convenient
 Offer a dominant assortment
 Offer superior customer service
 Be innovative or exclusive
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4. Figure 5.1 The Wheel of Retailing
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5. Three Basic Strategic Positions
Low end
Medium
High end
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6. Figure 5.2 Retail
Strategy Alternatives
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7. Figure 5.3 Scrambled Merchandising
by a Shoe Store
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8. Retail Life Cycle
• Retail institutions pass through
identifiable life stages
introduction
growth
maturity
decline
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9. Figure 5.4 Retail Life Cycle
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10. How Retail Institutions are Evolving
 Mergers, Diversification, Downsizing
 Cost-Containment and Value-Driven
Retailing
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11. Mergers, Diversification, and
Downsizing
 Mergers: combination of separately owned
firms.
 Diversification: retailers become active in
businesses outside their normal operations.
 Downsizing: unprofitable stores are closed
or divisions are sold off.
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12. Methods for Cost Containment
 Standardizing procedures, store layouts,
store size, and product offerings
 Using secondary locations
 Placing stores in smaller communities
 Using inexpensive construction materials
 Using plainer fixtures and displays
 Buying refurbished equipment
 Joining cooperative buying and advertising
 Creatively financing inventories
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13. Table 5.1 Store-Based Retail
Strategy Mixes
Food Oriented General Merchandise
 Convenience store  Specialty store
 Conventional  Traditional department
supermarket
 Full-line discount store
 Food-based
superstore  Variety store
 Combination store  Off-price chain
 Box (limited-line)  Factory outlet
store  Membership club
 Warehouse store
 Flea market
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14. Convenience Store Strategy Mix
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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15. Conventional Supermarket
Strategy Mix
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, and generic brands and coupons
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16. Food-Based Superstore
Strategy Mix
Location:
Prices:
Community shopping
Competitive
center or isolated site
Atmosphere and
Services:
Merchandise: Average
Full assortment plus health
and beauty aids and Promotion:
general merchandise Heavy use of
newspapers, flyers
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17. Combination Store
Strategy Mix
Location:
Prices:
Community shopping center
Competitive
or isolated site
Atmosphere and
Services:
Merchandise: Average
Full assortment plus health
and beauty aids and Promotion:
general merchandise Heavy use of
newspapers, flyers
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18. Box Store Strategy Mix
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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19. Warehouse Store Strategy Mix
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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20. Specialty Store Strategy Mix
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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21. Traditional Department Store
Strategy Mix
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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22. Full-line Discount Store Strategy
Mix
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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23. Variety Store Strategy Mix
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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24. Off-Price Chain Strategy Mix
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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25. Factory Outlet Strategy Mix
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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26. Membership Club Strategy Mix
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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27. Flea Market Strategy Mix
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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