Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e

13. Retailers, Wholesalers
    and Their Strategy
    Planning

Text © The McGraw−Hill

Companies, 2002

Retailers, Wholesalers, and Their Strategy Planning 359

It’s best of think of a retailer’s Product as its whole offering—including its assortment of goods and services, advice from salespeople, the

convenience of shopping, and hours it is available.

As in other businesses, segmentation and positioning decisions are important to

retailers. And ignoring either economic or social and emotional values in those deci-

sions can lead to serious errors in a retailer’s strategy planning.

Consider, for example, how the shopping atmosphere may have an emotional

effect on a consumer’s view of a retailer. How merchandise is displayed, what dec-

orations, colors, and finishes are used, and even the temperature, sounds, and smell

of a store all contribute to its “atmospherics” and store image. The right combina-

tion may attract more target customers and encourage them to spend more. Tiffany’s,

for example, offers luxury surroundings and inventive displays to attract upscale con-

sumers. But Tiffany’s may also appeal to consumers who get an ego boost from

Tiffany’s prestige image and very attentive staff. Of course, interesting surroundings

are usually costly, and the prices that consumers pay must cover that expense. An

online jewelry retailer avoids those costs but offers a completely different shopping

experience and deals with a different set of needs. So a retailer’s atmosphere and

image may be a plus or a minus, depending on the target market. And there’s no

single right answer about which target market is best. Like Tiffany’s, Dollar Gen-

eral has been very profitable. But it has a “budget” image and atmosphere that

appeals to working-class customers, many of whom just prefer to shop where they

don’t feel out of place.^3

Retailers have an almost unlimited number of ways in which to alter their offer-

ings—their marketing mixes—to appeal to a target market. Because of all the

variations, it’s oversimplified to classify retailers and their strategies on the basis of

a single characteristic—such as merchandise, services, sales volume, or even

whether they operate in cyberspace. But a good place to start is by considering basic

types of retailers and some differences in their strategies.

Let’s look first at conventional retailers. Then we’ll see how other retailers suc-

cessfully modify conventional offerings to better meet the needs of someconsumers.

Think about whythe changes take place. That will help you identify opportunities

and plan better marketing strategies.

Consumer needs relate

to segmentation and

positioning

Conventional Retailers—Try to Avoid Price Competition

A hundred and fifty years ago, general stores—which carried anything they

could sell in reasonable volume—were the main retailers in the United States. But

with the growing number of consumer products after the Civil War, general stores

couldn’t offer enough variety in all their traditional lines. So some stores began spe-

cializing in dry goods, apparel, furniture, or groceries.

Different types of

retailers emphasize

different strategies

Single-line, limited-line

retailers specialize by

product