Final.docx - RETAIL MARKETING STRATEGY LO1 Define the retail strategy.A retail strategy is a statement that identifies(1 the retailer\u2019s target

Final.docx - RETAIL MARKETING STRATEGY LO1 Define the...

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RETAIL MARKETING STRATEGY . LO1 Define the retail strategy. A retail strategy is a statement that identifies (1) the retailer’s target market, (2) the format and resources the retailer plans to use to satisfy the target market’s needs,and (3) the bases on which the retailer plans to build a sustainable competitive advantage. The target market is the market segment(s) toward which the retailer plans to focus its resources and retail mix. A retail format describes the nature of the retailer’s operations—its retail mix. A sustainable competitive advantage is an advantage the retailer has over its competition that is not easily copied by competitors and thus can be maintained over a long period of time. LO2 Illustrate how retailers build a sustainable competitive advantage. Three approaches for developing a sustainable competitive advantage are (1) building strong relationships with customers, (2) building strong relationships with suppliers, and (3) achieving efficient internal operations. Each of these approaches involves developing an asset—loyal customers, strong vendor relationships, committed effective human resources, efficient systems, and attractive locations- that is not easily duplicated by competitors. Three approaches for developing a sustainable competitive advantage are (1) building strong relationships with customers, (2) building strong relationships with suppliers, and (3) achieving efficient internal operations. To build an advantage that is sustainable for a long period of time, retailers typically cannot rely on a single approach, such as good locations or excellent customer service. Instead, they use multiple approaches to build as high a wall around their position as possible. LO3 Classify the different strategic growth opportunities retailers pursue. Four types of growth opportunities that retailers may pursue are market penetration, market expansion, retail format development, and diversification. The success in pursuing these growth opportunities is the synergies between the retailer’s present markets and the growth opportunity—whether the opportunity involves markets the retailer is presently pursuing or new markets—and the synergies between the retailer’s present retail mix and the retail mix of the growth opportunity—whether the opportunity exploits the retailer’s skills and knowledge in operating its present format or requires new capabilities to operate a new format . LO4 Identify issues that arise as domestic retailers become global retailers. By expanding internationally, retailers can increase their sales, leverage their knowledge and systems across a greater sales base, and gain more bargaining power with vendors. But international expansion is risky because retailers must deal with different government regulations, cultural traditions, consumer preferences, supply chains, and languages. The attractiveness of international opportunities is assessed by (1) the potential size of the retail market in the country, (2) the degree to which the
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