RETAIL POSITIONING CHAPTER 13 STEPS TO RETAIL SUCCESS

RETAIL POSITIONING CHAPTER 13

STEPS TO RETAIL SUCCESS 1. 2. 3. 4. Define Target Market Differentiate From Competitors Create Marketing Mix Position themselves in a certain place in the market

RETAIL POSITIONING • Relates to where the store situates itself in the market • Guides decision making • Goal: to differentiate itself from competition

RETAIL STRATEGY 1. 2. 3. Define Target Market Differentiate from competitors Blend Marketing Mix 1. 2. 3. 4. Product Price Place Promotion

TARGETING A SPECIFIC MARKET • Market= all consumers willing and able to buy a particular product • No TM defined= satisfy NO MARKET • Must segment market • Define a target customers with similar characteristics • Ways to Segment a market: • • Demographics Psychographics Geographic behavioral • Research, Research • YOU CANNOT TARGET EVERYONE.

SATISFY THEIR CUSTOMERS • Merchandising Policy- management guidelines to control inventory choices • Operational Policy- make store appealing to TM through physical appearance and customer service.

CUSTOMER BUYING MOTIVES • Purchasing behavior- way customers act in the market. • Cultural, social and psychological • Buying Motives- the reasons why people buy what they buy.

RATIONAL MOTIVES • buying based on logic • Purchase because item is durable, comfortable, quality, price. • Evaluate effective use of resource according to • How badly the item is needed • How often it will be worn • How long it will last

EMOTIONAL MOTIVES • Purchasing based on feeling • Examples: • purchase something because it is your favorite color. • Purchase because your favorite celebrity had one. • Generally unaware of the role these factors play in their choices. • Example: the use of SEX in advertising

PRODUCT MOTIVES • Purchase based on image of product, quality, construction or style. • Manufactures try to instill loyalty to create brand loyalty.

PATRONAGE MOTIVES • Customers who constantly buy from certain retailers or favor a particular store. • Based on reputation, merchandise assortment, price, or image

FINAL PROJECT DAY 1 • You have decided that Columbus is lacking fashionable options for clothing and accessories and you have decided to open a local boutique to better satisfy a need in the market. Create each of the following Develop a store name and logo- Make into Title Page for Project Create a Table of Contents Page for Page 2 New Page- Create a Customer Profile Print when complete and save in final project folder. Be sure to save with a logical save name. Otherwise you will struggle later. SAVE OFTEN!!

KNOW YOUR COMPETITION • • Direct Indirect Price Non Price

DIFFERENTIATE FROM COMPETITION • Price • Merchandise • Variety • Value • Worth the money • Perceived value is very different than true value • Convenience • Location, location • Services • Add-ons are a must to any service business • Makes the customers happy • Atmosphere • Must match Image • Image is everything • Like a personality

HOW IS CHARMING CHARLIE'S DIFFERENT? The Charming Charlie Fun Formula Selection My Style of the Day Is… Charming Charlie stores allow shoppers to find trendy fashion accessories and classic staples to suit any occasion, mood or style. So whether the look you are going for is vintage, modern, ethnic, bohemian, punk rocker, sophisticated. . . you can find the right fashion accessories at Charming Charlie to complete your look. And that includes those big occasions like weddings, job interviews, cocktail parties, prom… Color Delighting the Senses Charming Charlie can be sensory overload (in a good way). Not only do we serve up an amazing selection, we organize our store by color families. So if you are not up to exploring the vast selection of accessories, you can head straight to the right color family to find your accessories. Accessorizing a red dress and you want “red” or “black” accessories? Make a bee line for those sections. We keep it simple, so your inner fashion stylist can do the rest. Value Eureka! I've Struck Gold! (And I Can Afford It Too!) Window shopping is fun, but at Charming Charlie shoppers can find a goldmine of affordable baubles. So you can take home a bauble or two or three or four. Our fashion jewelry, women’s handbags and accessories are priced primarily between $4. 97 and $49. 97. Atmosphere There's a Party Going on Right Here! Fun music, sparkly chandeliers, friendly greeters. . . we want our shoppers to feel like they just stepped into a party. So we are always adding new touches and perks that upgrade the customer experience, hence the chandeliers and the upbeat tunes! Conversations We're Social! The social Charming Charlie store experience extends online as well. We keep you informed on what’s happening in our local stores through e-mail, Facebook, Twitter, You. Tube and Flickr.

CREATING AN IMAGE • How a store is perceived by the public • It is like a personality • Powerful part of attracting and satisfying customers • Developed to appeal to TM Image is formed by a combination of its merchandise fashion level, services offered, physical environment, employees, and promotion.

UPSCALE IMAGE • Wider range of services • higher price/quality • Credit privileges • Generous return policies • Gift wrapping • Well appointed restrooms • Plenty of sales assistance • Curteous, knowledgeable, helpful, and dressed in similar fashion level as the merchandise for sale

BARGAIN STORE • Limited to no services • Cash and carry • Limited refund policies

AMBIANCE • Or atmosphere • Pleasing to customers senses Upscale- luxurious surroundings Mid priced- pleasing surroundings Discount- may not try for any particular ambiance at all

CHARMING CHARLIE’S IMAGE Charming Charlie is an award-winning fashion jewelry and accessories retailer that has been delighting women of all ages since 2004. Charming Charlie is transforming the fashion industry through a stimulating in-store experience; product merchandised by color and a jaw-dropping selection of on-trend fashion jewelry and accessories. Always putting the consumer at the forefront, allowing Her to help guide the reins and spread the word.

FINAL PROJECT DAY 2 Now that you know who you are targeting, it is time to get to know your competition so that you can better compete with them. Create each of the following as different documents Competitors Profile- See handout Differentiation Strategy- See handout Image Statement- See handout Print and turn in when complete and save in final project folder. Be sure to save with a logical save name. Otherwise you will struggle later. SAVE OFTEN!!

PRODUCT STRATEGY • Products are either goods or services • Retailers must HAVE BOTH! • Shoppers are very demanding these days • Highest quality • Lowest prices • With the best service • Goods=tangible • • Shirts Slacks Suits Accessories • Services= intangible • Advice from sales associate • Convenient parking • Clean restrooms

SELECTING PRODUCTS FOR MIX • Merchandise selection • Assortment= array of goods carried by a store • Full • Limited • Specialty • Their goal is to successfully compete against other retailers

RETAIL MERCHANDISE • Hardline vs. Softline • Womenswear • Sizes • Categories • Sportswear, dresses, evening, maternity, outerwear, suits, activewear, swimsuits/beachwear, intimates, accessories, footwear, miscellaneous • Menswear • Sizes • Categories • Tailored Clothing, Furnishings, Active sportswear, Heavy Outerwear, Working Clothing, Accessories, footwear, Miscellaneous

RETAIL MERCHANDISE CONT. • Infant’s and Children’s Apparel • Infants- baby and toddler’s under 3 • Children’s- 3 to 12 for girls, 3 to 16 for boys • Typically three selling seasons • Spring/summer • Fall/winter • Most important because it features back to school wear • Holiday • Incorporates same trends as adult • Same merchandise categories as adult for most part • Special features: self-help, growth features

INFANT AND CHILDREN’S SIZING • Birth to Walking- sizing by 3 month increments • 0 -3 M, 3 -6 M, 6 -9 M, 9 -12 M, etc. • Toddler Sizing • 1 T to 4 T • Based on age • Children’s • 3, 4, 5, 6, 6 X • Slim line and regular • Older Children • 7 to 16 for girls • 8 to 22 for boys • Juniors • 0 to 15, odd increments (girls) • Same as older children for boys

RETAIL MERCHANDISE • Accessories • • Secondary items Extenders Impulse purchases Categories • Footwear, Hosiery, handbags, and small leather goods, belts, jewelry, headwear, scarves, neckties, handwear

ACCESSORIES • Footwear • Dress shoes • Casual • boots • Slippers • athletic • Hosiery • Panty hose • Tights • Socks • Leg warmers • Other stockings • Handbags and Small leather goods • pocketbooks • Wallets • Billfolds • Coin purses • Small cases • Belts • Jewelry • Fine jewelry • Bridge jewelry • Costume jewelry • Headwear • Caps and hats • Scarves • Neckties • Handwear

RETAIL MERCHANDISE • Cosmetics • Toiletries • Fragrances

PRODUCT MIX • Assortment Breath- the number of different categories offered. • Broad= many variety of goods available • Many different types, brands, price ranges • Narrow= few variety of goods available • Assortment Depth- the quantity of each item available • Deep= item in great number, in many sizes and colors • Shallow= few of each item

THREE DIFFERENT APPROACHES • Broad and Shallow • Narrow and Deep • Moderate breadth and Depth

SERVICES • Self Service • Limited Service • Full Service • List of services on page 364 in book

FINAL PROJECT DAY 3 • Now it is time to plan for the goods and services that your store will offer. Open Final Project document & title the next page Marketing Mix Develop a product mix chart for your boutique (See handout) Print only what you completed today and save in final project folder. Be sure to save with a logical save name. Otherwise you will struggle later. SAVE OFTEN!!

PRICING STRATEGY • Determining Price Levels Store sell their merchandise at • Must coordinate with IMAGE • Some companies use their name to indicate their price point • i. e- Payless Shoes, Bargain Shoes • Key to positioning store • Price Point- dollar amount at which an item is offered for sale.

YOUR PRICE STRATEGY • Overall profitability • Profit= Revenue- Expenses • Revenue= Selling Price * Quantity Sold • Expenses= Fixed Cost + Variable Cost (Quantity Sold) • Optimize sales volume • • Balance between sales and profit If price too low- high sales volume but forgo profit If price too high- low sales volume but higher profit Set a prediction of sales in dollar amount. • Deterrence of competition • Presenting an image

PRICING CALCULATIONS • Mark-up • Cost + MU= Selling Price • Keystone markup- doubling the cost to arrive at the retail price. • Typically used by small shops and is easy to calculate • 100% markup

PRESTIGE PRICING • Setting high prices on items to attract customers who want quality goods or the status of owning expensive and exclusive merchandise • Need to good location, high level of service, and carry exclusive brands to pull off this strategy

PRICE PROMOTING • Advertising special price reductions of goods and services to bring shoppers in. • Builds traffic to buy other items • Upscale stores do less price promotion

VALUE PRICING • Selling of item below suggested price by vendor • MSRP- manufacturers suggested retail price • Price matching is a strategy of value pricing

EVERYDAY LOW PRICING (EDLP) • Promote the idea that consumers can shop in the store at any time, knowing they will get fair price that gives good value for the money

ODD-FIGURE PRICING • Pricing merchandise a few cents less than a dollar denomination. • Psychologically, customers will consider item to be lower price than higher dollar amount.

LOSS LEADERS • Low priced articles on which stores make little or no profit. • Used to attract customers to come into the store

PLACE STRATEGY • • Site location and physical store design Should complement each other Want to be close to TM Design must appeal to TM

TYPES OF STORE CLUSTERS • • • Central business district Neighborhood shopping centers Community shopping centers Regional shopping centers Super-regional shopping centers

PROMOTION STRATEGY • Promotional Mix • Advertising • Print, broadcast, transit, store front • Sales Promotion • Any activities that encourage consumer interest in purchasing good • Coupons, Sales, etc. • Personal Selling • Sales staff- knowledgeable and friendly • Publicity • Special events, charity events • Visual Merchandising • Physical presentation of goods in most attractive way

FINAL PROJECT DAY 4 Now it is time to finish planning your marketing mix. Open your Marketing Mix Chart from yesterday. For each Product Type- Create a price point for each item. For each Service- State whether it is free, or an additional charge. If it will be an additional cost, provide a price those services. Below your Product Plan Discuss your Pricing Strategy Discuss your Place Strategy (Refer to previous handout for help) *We will be doing your promotional strategy later Print when complete and save in final project folder. Be sure to save with a logical save name. Otherwise you will struggle later. SAVE OFTEN!!