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Marketing Basics - Kotler Philip

Retailer Marketing Solutions

Now we will consider the main marketing decisions that a retailer needs to make regarding the target market, product mix and range of services, prices, incentives and location of their trading company.

DECISION ON THE TARGET MARKET . The most important decision to be made by the retailer is the choice of the target market. Without choosing a target market and compiling its profile, it is impossible to make consistent, consistent decisions regarding the product mix, store design, advertising messages and means of advertising, price levels, etc. Some stores are precisely oriented to their target market. For example, a women's fashion store in Palm Springs, California, knows that its main market is high-income women, mostly between 30 and 55 years old, who live within a 30-minute drive. However, too many retailers either do not have a clear idea of ​​their target markets or are trying to satisfy incompatible markets, as a result of not satisfying any of them properly. Even the Sirs company, serving a wide variety of groups of people, should have a clearer idea of ​​which of these groups will be its main target customers in order to more accurately select their product range, determine prices, store locations and the nature of measures incentives designed for these groups.

A retailer needs to do marketing research regularly to be sure of their customer satisfaction. Imagine a store that wants to attract wealthy customers. In fig. 72 the current image of this store is represented by a black line. Such an image is unattractive for the desired target market, so the store should either deal with the mass market or be transformed into a "higher class" establishment. Suppose the second option is accepted. After a while, the store repeats the customer survey. His new image is presented in Fig. 72 orange line. The store managed to bring its image closer to the needs of the target market.



I can not tell



Nice interior

Unpleasant interior

It's easy to shop at the store

It's hard to shop at the store

Many services are offered.

Few services offered

High quality goods

Poor quality goods

Wide range of products

Old image

Limited selection of products

Prices higher than other stores

Prices are lower than in other stores

Sellers are friendly

Sellers are inhospitable

Sellers are helpful

New look

Sellers are unmanageable

The store is conveniently located compared to others.

The store is uncomfortable compared to others

The store is conveniently located in relation to the house.

The store is inconvenient in relation to the house

Fig. 72. Comparison of the old and new images of the store, seeking to attract the target market.

DECISION ON THE COMMODITY ASSORTMENT AND COMPLEXES OF SERVICES . Retailers will have to decide on three main “commodity” variables: product mix, package of services, and store atmosphere.

The retailer’s product mix should meet the consumer’s expectations of the target market. By the way, it is the product range that becomes a key factor in the competition between similar retail enterprises. The retailer will have to decide on the breadth of the product mix (narrow or wide) and its depth (shallow or deep). So, in the field of catering, an institution can offer a narrow and small assortment (a small buffet), a narrow and deep assortment (a buffet with cold snacks), a wide and small assortment (a cafeteria) or a wide and deep assortment (a large restaurant). Another characteristic of the product range is the quality of the goods offered. The consumer is interested not only in the breadth of choice, but also in the quality of the goods.

The retailer will also have to decide on the range of services that he will offer customers. Family groceries and gastronomic shops of the past offered home delivery, credit sales, and leisurely conversations. In today's supermarkets, these services have completely disappeared. In the table. Listed below are some of the basic services that full-service retailers can offer. The range of services is one of the decisive tools of non-price competition to distinguish the store from the rest.

Table 17. Typical Retail Store Services

Presale Services

After Sales Services

Additional services

1. Receiving orders by phone

1. Shopping Delivery

1. Collection of checks

2. Acceptance of orders (or sending purchases by mail)

2. Conventional packaging (or packaging) of purchases

2. Help desk

3. Advertising

3. Gift wrap

3. Free parking

4. Window dressing equipment

4. Product Fit

4. Restaurants, cafes

5. In-store exposure

5. Return of goods

5. Repair services

6. Fitting rooms

6. Alteration of goods

6. Interior decoration

7. Opening hours

7. Tailoring services

7. Credit provision

8. Fashion show

8. Product installation

8. Lounge

9. Acceptance of old goods

9. Inscription of goods

9. Baby sitting

10. Cash on delivery

The third element of the retailer’s product arsenal is the atmosphere of the store. Each retail space has its own layout, which can both complicate and facilitate the movement of customers. Each store makes a certain impression. One is perceived as dirty, the other as charming, the third as luxurious, the fourth as gloomy. The store should embody an atmosphere that meets the tastes of consumers of the target market and has a positive impact on shopping. In a funeral home, silence, dim lights, peace are appropriate, and in a disco - bright colors, loud sounds, the beating of life. The atmosphere is created by creative workers who know how to combine visual, auditory, olfactory and tactile stimuli to achieve the desired effect27.

DECISION ON PRICES . Prices requested by retailers are a key competitive factor and at the same time reflect the quality of the goods offered. The ability of the retailer to make carefully thought-out purchases is an essential component of his success. In addition, pricing should be approached very carefully for a number of other reasons. You can make low margins on some products in order to turn these products into “lurers” or “unprofitable leaders” in the hope that, once in the store, consumers will also buy other goods with higher margins. In addition, the management of retail enterprises must be proficient in markdowns for convenience goods. For example, shoe traders expect to sell 50% of a product with a 60% mark-up, 25% of a product with a 40 mark-up, and the remaining 25% with no mark-up at all. These price cuts are already provided at their initial level.

DECISION ON STIMULATION METHODS . To reach consumers, retailers use the usual incentive tools — advertising, personal selling, sales promotion and propaganda. Retailers advertise in newspapers, magazines, on radio and television. From time to time, mass advertising is supplemented with letters that are handed in person and direct mail. Personal selling requires thorough training of sellers in the methods of establishing contact with customers, satisfying customer needs, and how to resolve doubts and complaints from customers. Sales promotion can be expressed in the conduct of in-store displays, the use of set-off coupons, raffle prizes, arrangement of visits of celebrities. Retailers who have something interesting to say can always use propaganda techniques. Let's get acquainted with the arsenal of stimulation techniques used by three art galleries recently opened in Chicago.

The Siburg-Istmus Gallery quietly wedged into the artistic environment a month ago with the help of a worthy imitation of reception - stimulation with words, announcing its opening in an unassuming, information-rich letter ... Our second example is the Origin Gallery. She broke into such a frightening fire in the field of “public relations” that it led to the confusion of the youngest artist (Mett) and could very well frighten just those people whom he would like to see in his studio-gallery. Still, art and “hard selling” do not fit together ... Our third example is a typical case of a neutral approach. Nameless, known only by address, Julian Frederic Harr's workshop consists of a neat gallery, behind which is a cluttered sculptor's studio. In the long run, Harr, quietly adjusting the traps for his visitors, is in a better position than Matt, who has yet to make people forget the hype he himself raised from good intentions. However, the soft selling methods used by the Siburg-Istmus gallery 28 are much more effective.

DECISION ON PLACE OF PLACEMENT OF THE ENTERPRISE . Choosing a store location is one of the decisive competitive factors in terms of customer acquisition opportunities. Clients, for example, usually choose the bank that is closest to them. Department store chains, oil companies, and fast food service franchise owners are especially careful in choosing locations for their businesses using the most advanced site selection and evaluation methods.