Chapter 3

Strategic
Planning in
Retailing RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH,
10th Edition

BERMAN EVANS
 Chapter Objectives
 To show the value of strategic planning
for all types of retailers
 To explain the steps in strategic
planning for retailers: situation analysis,
objectives, identification of consumers,
overall strategy, specific activities,
control, and feedback

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 Chapter Objectives (cont.)

 To examine the individual controllable

and uncontrollable elements of a retail
strategy, and to present strategic
planning as a series of integrated steps
 To demonstrate how a strategic plan can
be prepared

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 Retail Strategy

 The overall plan or framework of action that

guides a retailer
One year in duration
Outlines mission, goals, consumer
market, overall and specific activities, and
control mechanisms

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 Figure 3-1: Elements of a
Retail Strategy

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 Benefits of Strategic
Retail Planning
 Provides thorough analysis of the requirements for doing
business for different types of retailers
 Outlines retailer goals
 Allows retailer to determine how to differentiate itself from
competitors
 Allows retailer to develop an offering that appeals to a
group of customers
 Offers an analysis of the legal, economic, and competitive
environment
 Provides for the coordination of the firm’s total efforts
 Encourages anticipation and avoidance of crises

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 Organizational Mission

Retailer’s commitment
to a type of business
and to a
distinctive role in the marketplace

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 Figure 3-2: The Focused Organizational
Mission of Frisch’s Restaurants

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 Ownership and Management
Alternatives
 A sole proprietorship is an unincorporated retail
firm owned by one person
 A partnership is an unincorporated retail firm
owned by two or more persons, each with a
financial interest
 A corporation is a retail firm that is formally
incorporated under state law; it is a legal entity
apart from its officers

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 Figure 3-3:
Checklist to
Consider When
Starting a New
Business

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 Figure 3-4:
Checklist for
Purchasing an
Existing Retail
Business

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 Figure 3-5a: Selected Kinds of Retail
Goods and Service Establishments
Durable Goods Stores:
Automotive group
Furniture and appliances group
Lumber, building, and hardware group
Jewelry stores

Nondurable Goods Stores:

Apparel group
Food group
General merchandise group
Gasoline service stations

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 Figure 3-5b: Selected Kinds of Retail
Goods and Service Establishments
Service Establishments (Personal):
Laundry and dry cleaning
Beauty/barber shops
Funeral services
Health-care services

Service Establishments (Amusement):

Movie theaters
Bowling alleys
Dance halls
Golf courses

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 Figure 3-5c: Selected Kinds of Retail
Goods and Service Establishments
Service Establishments (Repair):
Automobile repair
Car washes
Consumer electronics repair
Appliance repairs

Service Establishments (Hotel):

Hotels
Motels
Trailer parks
Camps

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 Image and Positioning

An image represents
how a given retailer is
perceived
by consumers and others

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 Positioning Approaches
 Mass merchandising is a positioning approach
whereby retailers offer a discount or value-
oriented image, a wide or deep merchandise
selection, and large store facilities
 Niche retailing occurs when retailers identify
specific customer segments and deploy unique
strategies to address the desires of those
segments rather than the mass market

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 Figure 3-6: Niche Retailing by
Hear Music

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 Figure 3-7: Selected Retail
Positioning Strategies

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 Target Market Selection

• Three techniques
Mass marketing
Concentrated marketing
Differentiated marketing

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 Figure 3-8: Jean-Philippe Patisserie:
A Shop of Distinction

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 Strategic Implications of Target
Market Techniques

 Retailer’s location
 Goods and service mix
 Promotion efforts
 Price orientation
 Strategy

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 Figure 3-9: Developing an Overall
Retail Strategy

Controllable Uncontrollable
Variables: Variables:
•Store location •Consumers
•Managing business •Competition
•Merchandise •Technology
Retail •Economic
management
Strategy
and pricing conditions
•Communicating •Seasonality
with customer •Legal restrictions

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 Table 3-4a: Legal Environment and
Retailing
 Store Location Managing the Business
 zoning laws  licensing provisions
 blue laws  personnel laws
 environmental  antitrust laws
laws  franchise
 direct selling laws agreements
 local ordinances  business taxes
 leases and  recycling laws
mortgages

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 Table 3-4b: Legal Environment and
Retailing
 Merchandise Management and Pricing
 trademarks
 merchandise restrictions
 product liability laws and lemon laws
 sales taxes
 unit-pricing laws
 collusion laws
 sale prices
 price discrimination laws

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 Table 3-4c: Legal Environment and
Retailing
 Communicating with the Customer
 truth-in-advertising and selling laws
 truth-in-credit laws
 telemarketing laws
 bait-and-switch laws
 inventory laws
 labeling laws
 cooling-off laws

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 Table 3-6: Sample Strategic Plan

Sally’s is a small, independently-owned, high

fashion ladies clothing shop located in a
suburban strip mall. It is a full-price, full-
service store for fashion-forward shoppers.
Sally’s carries sportswear from popular
designers, has a personal shopper for busy
executives, and has an on-premises tailor.
The store is updating its strategic plan as a
means of getting additional financing for an
anticipated expansion.

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 Additional Concerns for
Global Retailing

 In addition to the strategic planning process:

assess your international potential
get expert advice and counseling
select your countries
develop, implement, and review an
international retailing strategy

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 Factors Affecting the Success of a
Global Retailing Strategy
 Timing
 A balanced international program
 A growing middle class
 Matching concept to market
 Solo or partnering
 Store location and facilities
 Product selection

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 Figure A3-1: Factors to Consider When
Engaging in Global Retailing

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