Chapter 3

Retail Marketing & Operations

Retailing & E-Retailing

Karine Aoun Barakat

Plan
• Marketing Mix in Retail 4 Ps
• Point of Sale Marketing (Merchandising and Services)
• Logistics and Supply Chain Management in Retail
• Customer Relationship Management
• Category Management
• Trade Marketing
Marketing Mix in Retail 4 Ps - Product

• What goods or services should be offered for sale to

customers.
• An important aspect is new product development. As
technology and tastes change, products become out of
date and inferior to those of the competition, products
must be updated with features that customers value or
completely replaced.
• Product decisions also involve choices regarding brand
names, guarantees, packaging and the services that
should accompany the product offering.
Marketing Mix in Retail 4 Ps - Product
• The range of products a retailer sells is called
the Assortment and this defines the nature of the
business and its position in the marketplace.
• The right product, at the right price in the right
quantity at the right time and place.
• Width: a question of need, the number of families
of products proposed by the retailer. Each family
corresponds to a particular need.
• Depth: a question of choice, the number of
references proposed by family of product and by
brand
• Aim: an assortment which is coherent with the
positioning of the retailer and the needs of
consumers.
 Marketing Mix in Retail 4 Ps - Product
• Private labels allow the retailer to position itself compared to its competitors,
propose a differentiated product offering and control the price and quality of its
products.

Private label entry level Private label, entry Private label, mid range,
level, branded branded
Low price Reassures consumer Maximizaton of the quality price
Low perceived value If product quality is low, ratio, Product innovation
adversely affects the image Differenciated packaging
of the retailer

Private label premium, Private label premium,

branded thematic
High perceived value High level of perceived
quality, Elaborated packaging
Marketing Mix in Retail 4 Ps - Price
• Represents, on a unit basis, what the company receives
for the product or service that is being marketed.
• It is the only element of the marketing mix that creates
revenue, while all of the other elements represent costs.
• Marketers need to be clear about pricing objectives,
methods and the factors that influence price setting.
• Some companies attempt to position themselves as
offering lower prices than their rivals. E.g. Asda, Aldi,
Netto and Super de Boer.
• Another strategy is to launch a low-price version of an
existing product targeted at price-sensitive consumers.
E.g. Apple launched the Iphone 12 mini.
Marketing Mix in Retail 4 Ps - Place
• Decisions concerning the distribution channels and
their management, the locations of outlets,
methods of transportation and inventory levels.
• The objective is to ensure that products and services
are available in the proper quantities, at the right
time and place.
• Producers need to manage their relationships with
retailers and wholesalers well because they may
provide the only cost-effective access to the
marketplace. They also need to be aware of new
methods of distribution that can create a competitive
advantage.
• E.g. Dell revolutionized the distribution of computers
by selling direct to customers rather than using
traditional computer outlets.
Marketing Mix in Retail 4 Ps - Promotion
• They involve the management of elements of the
promotional mix, including advertising, sales
promotions, digital and direct marketing, personal
selling, sponsorship and public relations.
• By these means the target audience is made aware
of the existence of a product or service and the
benefits (both economic and psychological) it confers
on customers.
• E.g. Procter & Gamble used advertising to reach the
emerging market of 290 million Russian consumers.
It ran a 12-minute commercial on Russian television
as its first promotional venture in order to introduce
the company and its range of products.
 Marketing Mix in Retail 4 Ps - Promotion
2 Approaches

PUSH Approach (pressure strategy) PULL Approach (attraction strategy)

• Stimulate sales through advertising
• Push the product towards the customer
campaigns, viral marketing, word of
• Stimulate sales within retailers’ points of sale mouth, social media, email marketing
• Retailers incite consumers to purchase: • Consumers ask for the products
• Loyalty program
• Coupons
• Point of sale marketing
• Limited editions
Evolution of Customer Behavior
Before Amazon, retail was all about location, customers had to visit stores to purchase.
Retailers could differentiate by having a different selection of products. Pricing and
promotion were helpful in attracting customers and driving store traffic. Today, it is
nearly impossible for a retailer to differentiate only based on product or price.

Some marketers argue that the 4Ps are dead due to the
change in customer behavior and their expectations.
Today's omnichannel consumers shop anytime and
everywhere. They expect "unlimited" product selection,
with the ability to price compare, all from the
convenience of the new "place" of retail - their
smartphone.
Marketing Mix in Retail 4 Es
• Experience – The sum of the customer’s experience is the
new “product.”
• Exchange – The customer doesn’t just want a catalog of
products at a price; they want an exchange of ideas,
information and value beyond price.
• Engagement – Promotion is not enough, and customers
are tired of being bombarded with deals. They are looking
for “engagement” that is personalized on their terms,
lifestyle and values.
• Everyplace – Stores have been replaced by “everywhere,”
and communication must now be everywhere as well.
Group Work : 4Es
• In groups of 4-5
• Choose a Retailer
• Describe their Activity
• Analyze the way in which they apply the 4Es concept
Point of Sale Marketing
• Point-of-sale or POS marketing refers to the
merchandising and promotional efforts around the
register or the online cart and checkout pages.
• It seeks to influence customers by positioning
small, low-cost items around the checkout area to
drive impulse buys.
• This marketing strategy not only catches customers
when they are poised to make a purchase, but also
keeps them engaged and happy as they wait in
line, improving their overall experience.
• When done effectively, POS marketing can help
boost your business’s upselling and cross-selling
potential, reinforce your brand, and look great in
your store.
Point of Sale Marketing Target Audience
• As the products pushed at the point of sale are mainly
low-ticket items and special offers, the target buyers
are:
• Impulse buyers: POS advertising is eye-catching,
impulse buyers feel inclined to grab something along
the way if they see a good offer or an interesting new
product on their way out.
• Bargain hunters: Items placed on POS display are
either “on sale”, “promotion”, “multibuy” or even the
store’s “product of the week” which is also on offer.
• No brand preferences: Brand shoppers tend to go for
their preferred brand, whereas those who have no
particular brand affinity are more likely to try new
brands if the deal is good.
Point of Sale Marketing
• What’s nearby? – A popular POS technique is
cross-marketing by placing the POS display
close to items that the product you want to
push is commonly sold with. This can inspire a
combo purchase that wasn’t previously
planned.
• How busy is it? – Place POS displays in high-
trafficked areas, such as at the end of the
aisles or the checkout counter. The more
people pass by, the more eyeballs your POS
installation can draw.
• How high is it? – An eye-level placement
increases visibility. Bottom or top shelves are
not a good place to put promotional items.
 Point of Sale Marketing Tactics

Line Checkout Space With Displays Add Countertop Displays Add a Sampling Area
Point of Sale Marketing Tactics

Cross Merchandising Compelling Call to Action Set Up “Dump Bins”

Complimentary Items
Point of Sale Marketing Tactics - Online

Suggest Complementary
Products before Checkout
Entice Online Shoppers with Free
Shipping as of a certain amount
Point of Sale Marketing Tactics - Online

Show Recently Viewed Items Send Abandoned Carts Reminder Emails

Logistics and Supply Chain Management
• A supply chain is comprised of all the businesses and
individual contributors involved in creating a product,
from raw materials to finished merchandise.
• Logistics is a specialized field of its own comprised of
shipping, warehousing, courier services, road/rail
transportation, and air freight.
• Retail companies become involved in supply chain
management to control product quality, inventory
levels, timing, and expenses.
• In a global economy, supply chain management often
includes dealings with companies and individual
contributors in other countries, which requires
involvement in politics, trade and tariff laws, quality
control, and international relationships.
Supply Chain Management – 3 Flows

Financial and
Physical Flows Information Flows Administrative
Flows
• Transportation and storage •Database
•Documents & transactions
of goods •Forecasting
•Payment terms, treasury
• Procurement from •Cost analysis
suppliers
• Delivery to the end
customer
Challenges of Retail Supply Chain Management
• Meeting irregular consumer demands and expectations:
The needs of the consumers are evolving, they’re choosing
convenience over retailer familiarity and will switch to
competitors if they are more accommodating.
• Distribution complexities: With online marketplaces,
retailers have more channels for the distribution of their
products. Extensive planning and flexibility is needed to
maximize the opportunities through every channel.
• Stock management and replenishment strategy: To keep
up with the competition, retailers need to have end-to-
end visibility into their entire supply chain along with real-
time inventory data. With proper demand forecasting,
inventory replenishment can be significantly improved.
Retail Supply Chain Management Best Practices

• Implement Effective Technology

• Ensure Adequate Staffing
• Maintain Healthy Supplier Relationships
• Focus on total cost of ownership (TCO) and not
price
• Optimize Inventory
• Decide which Activites to Outsource
• Minimize Risks through Regular Reviews
• Establish “green” initiatives and social
responsibility
Retail Supply Chain Management – Blockchains
Retail Supply Chain Management – Crowd Logistics
Customer Relationship Management - Definition
• Customer relationship management is the
art of managing good customer
relationships and prospective customers.
• Understanding who your customers and
potential customers are, and nurturing the
relationships you have with them, as well
as identifying client expectations and how
you meet or go beyond their expectations.
• A customer relationship model seeks to
improve the relationship between a
business and the customer. For this, they
drive new trends and provide profits for
current and future operations and
investments.
Customer Relationship Management - Definition

• Customer relationship marketing builds upon customer experience

management and puts improving customer interactions to foster brand
loyalty at the core of marketing activities and efforts.
• There are several ways that companies can implement CRM
• Providing excellent customer service at all times
• Getting to know individual customers to anticipate their needs
• Offering loyalty program perks and rewards for repeat customers.
• The goal of customer relationship marketing is to build trust with and
engage customers to build brand loyalty and reduce customer churn.
Can you think of Innovative Customer Relationship
Management Tactics?
Innovative Customer Relationship Management

1. Using Live Customer Assistance

2. Having an Omnichannel Presence
3. Automating Customer Support
4. Continuous Marketing Engagement
5. Using Social Media For Customer Service
6. Improving Conversion Rates
7. Increasing Customer Satisfaction
8. Developing a Strong Brand Image
Benefits of Customer Relationship Management
• Increasing customer satisfaction and communication levels
• Delivering a consistent customer experience – By becoming customer-centric
and focusing on customer relationships, companies align their touchpoints and
work across the organization to meet customer needs, improve satisfaction, and
deliver an exceptional experience
• Gathering customer feedback – Building strong relationships with customers
requires communication, and companies put more stock in gathering feedback
and analyzing it to make better business decisions to build stronger relationships
• Improving customer profitability – Customers that are loyal to brands spend
more with them; in fact, consumers are now putting customer experience ahead
of cost when making purchasing decisions
• Creating customer advocates – The happier your customers are, the better the
chances they will spread the word about you to others; when you build a strong
relationship with them and deliver a consistent experience, they have better
reviews to share
Retail Merchandising
Category Management
• Category management is the process of bundling
like products into a singular category, or business
unit, and then addressing procurement,
merchandising, sales, and other retail efforts on
the category as a whole.
• A central idea behind this strategy is to
emphasize the benefits of the category for the
consumer and remove inefficiencies and
unprofitable competition among brands and
suppliers within a category.
• This approach can help retailers lift profits on
similar products in multiple ways, including by
organizing procurement efforts under a single
category instead of by individual brand or
supplier.
Trade Marketing
• Trade marketing also called B2B marketing includes all the
promotional activities that are aimed at increasing the
demand of the product among the various supply chain
partners.
• By doing so, a manufacturer attempts to ensure the
consistent supply and availability of the product to the end
consumer. Incentives are given to the intermediaries for
effective promotion of the product at their end.
• Various forms of promotion at the retailer end include
activities such as - ensuring prominent display of the
product, branded merchandise, more shelf space, and even
word of mouth.
• For products which don’t require any human intervention
for effective sales such as toothpaste and batteries, the
manufacturer can offer retailers discounts, or better
margins to ensure availability of the product.