HC 1 – Retail Marketing 05-09-2016
Retailing is the set of activities that adds value to the products and services sold to
customer’s fort heir personal or family use.
- End-user
- B-to-C focus (no wholesaler, so no B2B)
Alternative definition: Retailing is the fine art of separating consumers from their
money (want consumers to spend money, if you are not good at this, then you will go
bankrupt).
Retail marketing = Activities that intent to stimulate selling products and/or services
directly to consumers through channels, such as stores, websites, vending machines
or catalogues.
- In a variety of channels.
Main retail marketing decisions:
- Retail strategy: Target market selection & positioning, retail branding,
channel strategy (omni channel)
- Retail Tactics: Assortment, pricing & promotions, advertising, store
presentation, employees/customer service (more classic)
You can ask consumers, but that is all rational. But 95% of the consumer actions is
unconscious and irrational. So they can’t explain this.
Main functions of retail companies
- Retailers create value by:
o Providing an assortment of products and services
E.g.: supermarket offers over 20.000 articles of more than 500
manufacturers.
o Holding inventory (Important to keep stock)
E.g.: Retailer holds stock that are immediately available for
consumer.
o Breaking bulk
E.g.: A manufacturer offers large quantities, a retailer offers
small quantities (e.g. toilet paper) have to do this on your
own as consumer, will be difficult to buy the right quantities
o Providing services
E.g.: credit facilitates, info about product/service by website or
sales people, pay by credit, bring product at home, money-
back guarantee etc.
Gross margin is what retailers earn from selling products with markup. AH has
about 20% gross margin. Other industries much higher. The gross margin is about
50%. No turnover etc.
- Supermarket employee costs about 8% of sales
- V&D is about 33% of sales so gross margin has to be much higher to
survive in the end.
Retailing is the set of activities that adds value to the products and services sold to
customer’s fort heir personal or family use.
- End-user
- B-to-C focus (no wholesaler, so no B2B)
Alternative definition: Retailing is the fine art of separating consumers from their
money (want consumers to spend money, if you are not good at this, then you will go
bankrupt).
Retail marketing = Activities that intent to stimulate selling products and/or services
directly to consumers through channels, such as stores, websites, vending machines
or catalogues.
- In a variety of channels.
Main retail marketing decisions:
- Retail strategy: Target market selection & positioning, retail branding,
channel strategy (omni channel)
- Retail Tactics: Assortment, pricing & promotions, advertising, store
presentation, employees/customer service (more classic)
You can ask consumers, but that is all rational. But 95% of the consumer actions is
unconscious and irrational. So they can’t explain this.
Main functions of retail companies
- Retailers create value by:
o Providing an assortment of products and services
E.g.: supermarket offers over 20.000 articles of more than 500
manufacturers.
o Holding inventory (Important to keep stock)
E.g.: Retailer holds stock that are immediately available for
consumer.
o Breaking bulk
E.g.: A manufacturer offers large quantities, a retailer offers
small quantities (e.g. toilet paper) have to do this on your
own as consumer, will be difficult to buy the right quantities
o Providing services
E.g.: credit facilitates, info about product/service by website or
sales people, pay by credit, bring product at home, money-
back guarantee etc.
Gross margin is what retailers earn from selling products with markup. AH has
about 20% gross margin. Other industries much higher. The gross margin is about
50%. No turnover etc.
- Supermarket employee costs about 8% of sales
- V&D is about 33% of sales so gross margin has to be much higher to
survive in the end.
