Berman CH 03

Chapter 3
Strategic
Planning in
Retailing
RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH,
10th Edition
BERMAN EVANS
Chapter Objectives
To show the value of strategic planning
for all types of retailers
To explain the steps in strategic
planning for retailers: situation analysis,
objectives, identification of consumers,
overall strategy, specific activities,
control, and feedback
3-2
Chapter Objectives (cont.)
To examine the individual controllable

and uncontrollable elements of a retail
strategy, and to present strategic
planning as a series of integrated steps
To demonstrate how a strategic plan can
be prepared
3-3
Retail Strategy
The overall plan or framework of action that

guides a retailer
One year in duration
Outlines mission, goals, consumer
market, overall and specific activities, and
control mechanisms
3-4
Figure 3-1: Elements of a
Retail Strategy
3-5
Benefits of Strategic
Retail Planning
 Provides thorough analysis of the requirements for
doing business for different types of retailers
 Outlines retailer goals
 Allows retailer to determine how to differentiate itself
from competitors
 Allows retailer to develop an offering that appeals to a
group of customers
 Offers an analysis of the legal, economic, and
competitive environment
 Provides for the coordination of the firm’s total efforts
 Encourages anticipation and avoidance of crises
3-6
Situation Analysis
Organizational Mission
Retailer’s commitment
to a type of business
and to a
distinctive role in the marketplace
Who we are and what we do?
3-7
Figure 3-2: The Focused Organizational
Mission of Frisch’s Restaurants
3-8
Situation Analysis
Ownership and Management Alternatives
 A sole proprietorship is an unincorporated retail
firm owned by one person
 A partnership is an unincorporated retail firm
owned by two or more persons, each with a
financial interest
 A corporation is a retail firm that is formally
incorporated under state law; it is a legal entity
apart from its officers
3-9
Situation Analysis
Selected Kinds of Retail Goods and Service
Establishments
Durable Goods Stores:
Automotive group
Furniture and appliances group
Lumber, building, and hardware group
Jewelry stores
Nondurable Goods Stores:

Apparel group
Food group
General merchandise group
Gasoline service stations
3-10
Situation Analysis
Establishments
Service Establishments (Personal):
Laundry and dry cleaning
Beauty/barber shops
Funeral services
Health-care services
Service Establishments (Amusement):

Movie theaters
Bowling alleys
Dance halls
Golf courses
3-11
Situation Analysis
Establishments
Service Establishments (Repair):
Automobile repair
Car washes
Consumer electronics repair
Appliance repairs
Service Establishments (Hotel):

Hotels
Motels
Trailer parks
Camps
3-12
Objectives
• Sales: Volume of goods and services a retailer
sells
• Profits: minimum profits retailer seeks in the first

year
• Satisfaction of Publics: Stakeholders customers,

employees, suppliers and government
3-13
Objectives
Image and Positioning
An image represents
how a given retailer is
perceived
by consumers and others
3-14
Objectives
Positioning Approaches
 Mass merchandising is a positioning approach
whereby retailers offer a discount or value-
oriented image, a wide or deep merchandise
selection, and large store facilities (Low cost)
 Niche retailing occurs when retailers identify
specific customer segments and deploy
unique strategies to address the desires of those
segments rather than the mass market
(Music Store)
3-15
Figure 3-6: Niche Retailing by
Hear Music
3-16
Objectives
Selected Retail Positioning Strategies
3-17
Identification of consumers
Target Market Selection
• Three techniques
Mass marketing: Selling goods and services to abroad
spectrum of customers
Concentrated marketing: Selling to a specific

customers
Differentiated marketing: Selling to tow or more

distinct customers
3-18
Identification of consumers
Strategic Implications of Target Market Techniques
Retailer’s location
Goods and service mix
Promotion efforts
Price orientation
Strategy
3-19
Developing an Overall Retail Strategy
Controllable Uncontrollable
Variables: Variables:
•Store location •Consumers
•Managing business •Competition
•Merchandise •Technology
Retail
management •Economic
Strategy
and pricing conditions
•Communicating •Seasonality
with customer •Legal restrictions
3-20
Table 3-4c: Legal Environment and
Retailing
 Communicating with the Customer
truth-in-advertising and selling laws
truth-in-credit laws
telemarketing laws
bait-and-switch laws
inventory laws
labeling laws
3-21

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Chapter 3

To examine the individual controllable

The overall plan or framework of action that

Nondurable Goods Stores:

Service Establishments (Amusement):

Service Establishments (Hotel):

• Profits: minimum profits retailer seeks in the first

• Satisfaction of Publics: Stakeholders customers,

Concentrated marketing: Selling to a specific

Differentiated marketing: Selling to tow or more

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