RETAIL

MARKETING
STRATEGY

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 BACKGROUND

Retail is one of the chains of distribution channels that play an important role in the delivery of

goods and services to the end customers. According to (Risch,1991) the word 'Retail' is derived

from a French word, retailer, with the prefix re and the verb tailer meaning "to cut again".

Meanwhile, the retail definition by (Gilbert, 2003) is any business that directs its marketing

effort towards satisfying the final customer based upon the organization of selling goods and

service as a means of distribution. Of these terms, retail is a business that becomes the last chain

of the distribution channel.

Retail also can be divided into two categories, the modern retail and the traditional retail

(Tambunan, 2004; Utomo, 2011). Both of the retail categories have different characteristics. In

accordance with (Utami, 2014), some of the characteristics between modern retail and traditional

retail are compared in table. One of the intermediaries in the marketing channel is retailers. A

retailer is a merchant or occasionally an agent or a business enterprise, whose main business is

selling directly to the end consumers for non-business use. The retailer performs many marketing

activities such as buying, selling, grading, risktrading, and developing information about

customer's wants. According to (Sullivan and Dennis, 2002), retailer is a dealer or trader selling

goods in small quantities or more pedantically the one who repeats or relates.

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The set of business activities that adds value to the products and services sold to consumers for

their personal or family use is called retailing, by (Levy and Weitz, 2007; Berman and Evans,

2007). In this case, the end consumer is the target of a retailing who purchases products for their

own consumption whereas in the retailing business, goods and services or a combination of both

namely products that are sold. Based on (Vinod, 2005), retailing is a very complex business.

Getting the right product to the right store with the right quantity at the right time with the right

price at the lowest cost of delivery is a very challenging task. Retailing also consists of multiple

factors including location selection, pricing and promotions, distribution, market response,

lifetime value of retail customers, merchandising, customer loyalty programs, private labels,

price matching and return policies, new products, e-tailing, retailer–manufacturer interactions,

product assortment and stock-outs, retail branding, and customer satisfaction (Kamakura,

Kopalle, & Lehmann, 2014).

The various processes which help the customers to procure the desired merchandise from the

retail stores for their end use refer to retail management (Sunyoto, 2015). Retail management

includes the all steps required to bring the customers into the store and to fulfill their buying

needs. One thing that needs to be considered, particularly for the small retailer, is effective retail

merchandise management (Staples & Swerdlow, 1978). The effective retail merchandise

management is part of retailing business. Merchandise management can be termed as the

analysis, planning, acquisition, handling and control of merchandise investment of a retail

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operation. The retailer must be able to plan and budget for the merchandise requirements to

avoid lost sales, lost profits, potential obsolescence, and lost opportunity cost due to a too large,

out-of-date inventory (Staples & Swerdlow, 1978).

Retail is the sales of goods and service from business to and end user (called a customer). Retail

marketing is the process by which retailers promote awareness and interest of their goods and

services in an effort to generate sales from their consumers. There are many different approaches

and strategies retailers can use to market their goods and services. Retailers use various

advertising and communication tools to grow awareness and considerations with future

customers. Finding the right marketing mix can lead to a profitable growth and a higher return on

investment. By considering the right advertising strategy retailers can persuade customers to

choose to do business with their retail brand. The fundamental approach used by modern retailers

in marketing their products is the Four PS of Retail Marketing.

The word “Retail” is derived from a French word with the prefix re and the verb tailer meaning

“to cut again”. Evidently, retail trade is one of that cuts of smaller portions from large lumps of

goods. It is a process through which goods are transported to final consumers. In other words,

retailing consists of the activities involved in selling directly to the ultimate consumer for

personal, non-business use. It embraces the direct-to-customer sales activities of the producer,

whether through his own stores by house-to-house canvassing or by mail-order

business.Manufacturers engage in retailing when they make direct-to-consumer sales of their

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products through their own stores (as Bata and Carona) shoe companies, D.C.M. Stores,

Mafatlals and Bombay Dyeing) by door-to-door canvass, or mail order or even telephone, Even

wholesaler engages in retailing when sells directly to an ultimate consumer, although his main

business may still be wholesaling.

A retailer is a merchant or occasionally an agent or a business enterprise, whose main business is

selling directly to ultimate consumers for non-business use. He performs many marketing

activities such as buying, selling, risk-trading, and developing information about customer`s

wants. A retailer may sell infrequently to industrial users, but these are wholesale transactions,

not retail sales. If over one half of the amount of volume of business comes from sales to

ultimate consumers.

Obviously, working from home saves independent agents time and money. Not having to invest

in an office space is a huge perk, and not having to commute to work eliminates a lot of stress,

especially if it saves them a drive through rush-hour traffic. But there are a few lesser-known

benefits you`ll get as a home-based business. A lot of people don`t even think about them until

they start experiencing them for themselves.

Home based business can provide a more benefit towards to the owner. Save on gas and have

fewer car troubles. Since you don`t have to commute to work you`ll save money on gas or

whatever your preferred method of transportation is. Snack whenever and as often as you want,

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without fear of being judged. You`ll have complete control over your work environment. This is

crucial not only for your productivity, but for your happiness. Your business can literally be run

from your most comfy chair, or with your favorite playlist playing (when you aren`t on the

phone). As a related perk, you don’t have to worry about dealing with co-workers that might

disapprove of your style.

It is in retailing that very drastic changes have occurred during the last two decades. Some

institutions have disappeared whereas newer ones have been added. This process of deletion /

addition still continues in newer forms. There are large scale retailing shops together with very

small units, both working simultaneously. They have from hawkers and peddlers, who have no

permanent place, to well organised, settled retail shops like chain stores, departmental stores, etc.

The institutions carrying on the retail business can be classified as:

Major Types of Retail Stores

Instore-Retailing Non-Store Retailing

1. Department Stores 1. Direct

2. Super Markets 2. Telemarketing

3. Discount Houses 3. Online Retailing

4. Chain Stores or 4. Automatic Vending

5. Multiple Shops 5. Direct Marketing

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Non-Store

Retailing A large majority - about - 80% - of retail transactions are made in stores. However, a

growing volume of sales is taking place away from stores. Retailing activities resulting in

transactions that occur away from a physical store are called non-store retailing. It is estimated

that non-store sales account for almost 20% of total retail trade. Following are the five types of

non store retailing: direct selling, tele marketing, online retailing, automatic vending and direct

marketing. Each type may be used not just by retailers but by other types of organisations as well.

Direct Selling

In the context of retailing, direct selling is defined as personal contact between a sales person and

a consumer away from a retail store. This type of retailing has also been called in home selling.

Annual volume of direct selling in India is growing fast from the beginning of the 21st century.

Like other forms of non-store retailing, direct selling is utilized in most countries. It is

particularly widespread in Japan, which accounts for about 35% of the worldwide volume of

direct selling. The U.S. represents almost 30% of the total and all other countries the rest. The

two kinds of direct selling are door to door and party plan. There are many well known direct-

selling companies including Amway, Creative memories and Excel communications. Diverse

products are marketed through direct selling. This channel is particularly well suited for products

that require extensive demonstration.

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Advantages of Direct Selling

i. Consumers have the opportunity to buy at home or at another convenient nonstore

location that provides the opportunity for personal contact with a sales person.

ii. For the seller, direct selling offers the boldest method of trying to persuade ultimate

consumers to make a purchase.

iii. The seller takes the product to the shoppers home or work place and demonstrates

them for the consumer.

Limitations of Direct Selling

i. Sales commissions run as high as 40 to 50% of the retail price; of course, they are paid

only when a sale is made.

ii. Recruiting sales people - most of whom are part timers are difficult tasks, iii. Some sales

representatives use high pressure tactics or are fradulent. Telemarketing

Online Retailing:

When a firm uses its website to offer products for sale and then individuals or organisations use

their computers to make purchases from this company, the parties have engaged in electronic

transactions (also called on line selling or internet marketing). Many electronic transactions

involve two businesses which focuses on sales by firms to ultimate consumers. Thus online

retailing is one which consists of electronic transactions in which the purchaser is an ultimate

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consumer. Online retailing is being carried out only by a rapidly increasing number of new firms,

such as Busy.com, Pets Mart and CD Now.com. Some websites feature broad assortments,

especially those launched by general merchandise retailers such as Wai-mart and Target. Some

Internet only firms, notably Amazon.com are using various methods to broaden their offerings.

Whatever their differences, e-retailers are likely to share an attribute. They are unprofitable or

best, barely profitable. Of course, there are substantial costs in establishing an online operation.

Aggressive efforts to attract shoppers and retain customers through extensive advertising and low

prices are also expensive. The substantial losses racked by online enterprises used to be accepted,

perhaps even encouraged by investors and analysts. The rationale was that all available funds

should be used to gain a foothold in this growing market. Despite these challenges, online

retailing is expected to grow, rapidly and significantly for the foreseable future. Online sales

represented about 1% of retail spending in 2005, but one research firm estimates that consumer

purchases on the Internet with triple by the year 2010. Which product categories are consumers

most likely to buy on the Internet in the future? Consumers' shopping intentions in 2005 placed

the following goods and services at the top of the list: books, music and videos, computer

hardware and software, travel and apparel. Of course, given that change on the Internet occurs,

these categories soon may be surpassed by others - perhaps groceries, toys, health and beauty

aids, auto parts or pet supplies.

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Automatic vending

The sale of products through a machine with no personal contact between buyer and seller is

called automatic vending. The appeal of automatic vending is convenient purchase. Products sold

by automatic vending are usually well-known presold brands with a high rate of turnover. The

large majority of automatic vending sales comes from the "4 c's": cold drinks, coffee, candy and

cigarettes. Vending machines can expand a firm's market by reaching customers where and when

they cannot come to a store. Thus vending equipment is found almost everywhere, particularly in

schools, work places and public facilities. Automatic vending has high operating costs because

of the need to replenish inventories frequently. The machines also require maintenance and

repairs. The outlook for automatic vending is uncertain. The difficulties mentioned above may

hinder future growth. Further, occasional vending-related scams may scare some entrepreneurs

away from this business. Vending innovations give reason for some optimism. Debit cards that

can be used at vending machines are becoming more common. When this card is inserted into

the machine, the purchase amount is deducted from the credit balance. Technological advances

also allow operators to monitor vending machines from a distance, thereby reducing the number

of out-of-stock or out-of-order machines.

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Direct Marketing

There is no consumers on the exact nature of direct marketing. In effect, it comprises all types of

non-store retailing other than direct selling, telemarketing, automatic vending and online

retailing. In the context of retailing, it has been defined as direct marketing as using print or

broadcast advertising to contact consumers who in turn, buy products without visiting a retail

store. Direct marketers contact consumers through one or more of the following media: radio,

TV, newspapers, magazines, catalogs and mailing (direct mail). Consumer order by telephone or

mail. Direct marketers can be classified as either general - merchandise firms, which offer a

variety of product lines, or specialty firms which carry - only one or two lines such as books or

fresh fruit.

Under the broad definition, the many forms of direct marketing include:

• Direct mail - in which firms mail letters, brochures and even product samples to consumers,

and ask them to purchase by mail or telephone.

• Catalog retailing - in which companies mail catalogs to consumers or make them available at

retail stores.

• Televised shopping - in which various categories of products are promoted on dedicated TV

channels and through infomercials, which are TV commercials that run for 30 minutes or even

longer on an entertainment channel.

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On the plus side, direct marketing provides shopping convenience. In addition, direct marketers

enjoy comparatively low operating expenses because they do not have the overhead of physical

stores. Direct retail marketing has drawbacks. Consumers must place orders without seeing or

touching the actual merchandise. To off-set this, direct marketers must offer liberal return

policies. Furthermore, catalogs and to some extent, direct mail pieces are costly and must be

prepared long before they are issued. Price changes and new products can be announced only

through supplementary catalogs or brochures. Direct marketing's future is difficult to forecast,

given the rise of the Internet. The issue is whether or not firms relying on direct marketing can

achieve and sustain a differential advantage in a growing competition with online enterprises.

Franchising

A franchising operation is legal contractual relationship between a franchiser (the company

offering the franchise) and the franchisee (the individual who will own the business). The terms

and conditions of the contract vary widely but usually the franchiser offers to maintain a

continuing interest in the business of the franchisee in such areas as the site selection, location,

management, training, financing, marketing, record-keeping and promotion. He also offers the

use of a trade name, store motif standardized operating procedure and a prescribed territory. In

return the franchisee agrees to operate under conditions set forth by the franchiser.

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For the manufacturers, the franchising is beneficial in these directions:

i. it allows them to conserve capital.

ii. the distribution system is established in the shortest possible time,

iii. Marketing costs are lowest and

iv. Expenses of fixed overhead such as administrative expenses of the personnel of the

company owned units are cut down substantially.

Franchising exists in such products as soft drinks, automobiles and parts, business services, dry

cleaning etc.

The franchisee should also:

i. make reference check from the financial institutions.

ii. make inquiries about the product, its quality, appeal, exclusiveness, competitiveness and

effectiveness in bringing in repeat customers.

iii. have enough capital to buy the franchise, iv. be capable of taking supervision work

iv. consult the professionals and seek their guidance in legal matters, vi. take risks and invest

sufficient time.

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 MECHANISM STRATEGY

1. Start with the store assets I already have. If my store is running, I will likely have a lot of

resources that can be used.

(These assets include)

 Merchandise and Fixtures, the best way to attract customer is to wow them with amazing

merch. I must see to it that I am always stocking my products (Egg) come up with a clean

and spacious store.

 There must be a label, especially for the prices, depending on the sizes of the Egg (Small,

Medium, Large, Extra Large)

2. Leverage Social Media

When it comes to retail and Social Media, I will consider Facebook and Instagram. These

are the most consumer concentric networks.

 Posting on Social Media, the producst that I am selling, the Fresh Egg, in different sizes.

They can also have big discount if they will order more dozens.

3. Free delivery of the product

It will be more convenient to the customers if I will offer them a Free Delivery, specially

to the bulk orders, or dozens of eggs.

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PROMOTION and ADVERTISING

1. Markdowns and Discounts

If they became a loyal customer to my business I can surely give them a big discount in

exchange. I can also give them a free calendar every year, or even a sweet gift

occasionally.

2. Personal Selling

Face to face selling of my product to the people to get more customers, and more income

(Face to face communication between buyer and reseller)

3. Teach others, don`t just sell them

Be friendly, a good customer service is a good experience that I can offer to them. I must

listen and learn to the customers opinion, maybe it`s for the better and improvement I will

create bond with them so that the customers will keep coming back to my business.

4. Explore Partnership

Exploring and Utilizing partnerships can potentially expand the potential of my own

business. I need to focus on partnership opportunities that can be mutually beneficial

WHO IS MY TARGET MARKET?

My target market are the people in my community, those who needed a big supply of my product

(Egg).

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 SUPPORTING LITERATURE

The egg is an excellent source of iron, nutritious source of protein, fat, vitamins and choline. It is

also a typical Filipino food for breakfast, lunch, or even dinner. It can also be used as a special

recipe in baking, as well as for beauty purposes that can be applied on face to remove excessive

oil it can also be a natural hair moisturizer.

CAPITAL EXPENSES & OPERATING EXPENSES

CAPITAL EXPENSES OPERATING EXPENSES

Furniture & Fixture 1500.00 Plastic Bags 500.00
Delivery Vehicle 50,000.00 Paper Bags 500.00
3 Electric Fan 1500.00 Ballpens (10Pcs) 100.00
Calculator 300.00 Paper/receipt 150.00
Gasoline 300.00
Egg Tray 1000.00
Egg (Small 150.00) 100 Dozen 1500.00
Egg (Medium 160.00) 100 Dozen 1600.00
Egg (Large 170.00) 100 Dozen 1700.00
Egg (Extra Large 180.00) 100 Dozen 1800.00
Payroll (2 manpower x 24 days) 14,400.00
Total Gross Income 53,300.00 Total 23,550.00

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 100 Dozen/Eggs Size Capital Selling Price/Dozen 6 days per week/
1 year
Small 150 160 960

Medium 160 170 1020

Large 170 180 1080

Extra Large 180 190 1140

Total Gross Income in 1 Year = 201,600.00

FINANCING

Interest rate to Monthly

 To determine the monthly rate on 100,000.00 where (P): ₱ 100,000.00 Rate (R): 3 per

year Time: 5 years.

A= ₱ 115.000.00

(1=A-P = ₱ 15,000.00)

EQUATION:

A=P(1+rt)

 Calculation:

First Converting R percent to r a decimal r=R/100 = 3%/100= 0.03 per year.

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  Solving Equation

A=10,000 (1+(0.03x5)) = 11,500

A= ₱ 115,000.00

 The total amount accrued, principal plus interest from simple interest or a

principal of 100,000.00 at a rate of 3% per year for 5 years is ₱115,000.00

INTERNAL AUDITING SYSTEM

Is an independent objective assurance & consulting activity designed to add value to & improve

an organization`s operations with commitment to integrity and accountability. It provides value

to governing bodies and senior management as an objective source of independents advice. It

will examine issues related to company business practices and risk.

For the business that I have a retail store or selling of eggs. As the owner I will be the one to

“Retail-audit” my store. I will monitor the sales of the volume of the customers. The

effectiveness of the store display. I will verify and make recommendations for improvement. I

will follow up the store`s progress, I will be hands on in everything.

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 RETURN OF INVESTMENT

Return on investment, or ROI, is the most common profitability ratio. There are several ways to

determine ROI, but the most frequently used method is to divide net profit by total assets. So if

your net profit is $100,000 and your total assets are $300,000, your ROI would be .33 or 33

percent. Return on investment isn't necessarily the same as profit. ROI deals with the money you

invest in the company and the return you realize on that money based on the net profit of the

business. Profit, on the other hand, measures the performance of the business. Don't confuse ROI

with the return on the owner's equity. This is an entirely different item as well. Only in sole

proprietorships does equity equal the total investment or assets of the business.

You can use ROI in several different ways to gauge the profitability of your business. For

instance, you can measure the performance of your pricing policies, inventory investment,

capital equipment investment, and so forth. Some other ways to use ROI within your company

are by:

 Dividing net income, interest, and taxes by total liabilities to measure rate of earnings of

total capital employed.

 Dividing net income and income taxes by proprietary equity and fixed liabilities to

produce a rate of earnings on invested capital.

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  Dividing net income by total capital plus reserves to calculate the rate of earnings on

proprietary equity and stock equity.

Recently, certain investors and businesses have taken an interest in the development of a new

form of the ROI metric, called "Social Return on Investment," or SROI. SROI was initially

developed in the early 2000s and takes into account broader impacts of projects using extra-

financial value (i.e. social and environmental metrics not currently reflected in conventional

financial accounts). SROI helps understand the value proposition of certain ESG (Environmental

Social & Governance) criteria used in socially responsible investing (SRI) practices. For

instance, a company may undertake to recycle water in its factories and replace its lighting with

all LED bulbs. These undertakings have an immediate cost which may negatively impact

traditional ROI—however, the net benefit to society and the environment could lead to a positive

SROI

There are several other new flavors of ROI that have been developed for particular purposes.

Social media statistics ROI pinpoints the effectiveness of social media campaigns—for example

how many clicks or likes are generated for a unit of effort. Similarly, marketing statistics ROI

tries to identify the return attributable to advertising or marketing campaigns. So-called learning

ROI relates to the amount of information learned and retained as return on education or skills

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training. As the world progresses and the economy changes, several other niche forms of ROI are

sure to be developed in the future.

Limitations of ROI

Examples like Joe's (above) reveal some limitations of using ROI, particularly when comparing

investments. While the ROI of Joe’s second investment was twice that of his first investment, the

time between Joe’s purchase and sale was one year for his first investment and three years for his

second.

Joe could adjust the ROI of his multi-year investment accordingly. Since his total ROI was 40

percent, to obtain his average annual ROI, he could divide 40 percent by 3 to yield 13.33 percent.

With this adjustment, it appears that although Joe’s second investment earned him more profit,

his first investment was actually the more efficient choice.

ROI can be used in conjunction with Rate of Return, which takes into account a project’s time

frame. One may also use Net Present Value (NPV), which accounts for differences in the value

of money over time, due to inflation. The application of NPV when calculating rate of return is

often called the Real Rate of Return.

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