Module 2

(BR-RMGT)
• Store Location, Design, and Layout Strategies

• Develop Retail Marketing Mix Strategies

• Trends and Challenges in the Retail Industry

to your second module!

Kimberly I. Ciruelos, MBA, CLSSYB

Course Instructor
Email Address: [Link]@[Link]

Contact Number: 09615470246

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San Mateo Municipal College
College of Business and Accountancy
Prepared by Kimberly I. Ciruelos
 RETAIL MANAGEMENT
MODULE 2 OUTLINE

LEARNING OBJECTIVES

After completing this module, you are expected to:

• Analyze key factors in choosing a strategic retail store location;
• Design a customer-friendly store layout and atmosphere;
• Create a retail marketing mix strategy including merchandising, pricing, and promotional
techniques;
• Apply these concepts to real or simulated retail businesses;
• Formulate effective strategies for store location, design, and layout;
• Develop a retail marketing mix strategy, including merchandising, pricing, and promotion; and
• Evaluate emerging trends and challenges in the retail industry such as digital technology,
sustainability, and ethics.

Topic 1: Formulate Strategies for Store Location, Design, and Layout to Maximize Customer
Satisfaction
A. Store Location Strategy
Definition:
Store location strategy refers to the process of choosing the most strategic place to set up a retail business
based on accessibility, customer presence, cost, and competition.
Why It Matters:
A good location increases foot traffic, sales, and brand visibility. A bad location may result in poor
customer turnout, no matter how good the product is.

Key Factors to Consider:

1. Proximity to Target Market – Is your store near the people you want to sell to?
2. Accessibility – Is the location easy to reach? Are there nearby roads, parking, or public transport?
3. Foot Traffic – Is the area busy with people (malls, terminals, schools)?
4. Competition – Are there many or few similar stores nearby?
5. Cost and Zoning – Are the rent, taxes, and local regulations manageable?
Example:
Jollibee places branches near schools and offices because those areas have high foot traffic of
families and workers.

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San Mateo Municipal College
College of Business and Accountancy
Prepared by Kimberly I. Ciruelos
B. Store Design and Layout
Definition:
Store design and layout refer to how a store is physically arranged and visually presented to influence the
shopping experience, customer flow, and buying behavior.

Elements of Store Design:

• Storefront & Signage – Should attract attention and represent the brand
• Lighting & Music – Affects the mood (e.g., relaxing or energetic)
• Color Scheme – Enhances brand identity and ambiance
• Aisle Spacing & Product Arrangement – Helps customers move easily and find items quickly

Types of Layouts:
1. Grid Layout – Straight aisles (e.g., groceries like Puregold)
2. Loop (Racetrack) Layout – Encourages exploration (e.g., department stores like SM)
3. Free-flow Layout – Casual, boutique-style layout (e.g., fashion stores like Penshoppe)
Goal:
The design and layout should maximize comfort, visibility, and convenience, which leads to higher
customer satisfaction and sales.

Topic 2: Develop Retail Marketing Mix Strategies

A. Merchandising Strategy
Definition:
Merchandising is the planning, buying, displaying, and promoting of products in a retail store to encourage
sales.

Key Components:
• Product Assortment – The range of products offered (variety and quantity)
• Visual Merchandising – How products are displayed to catch attention
• Stock Management – Ensuring items are available and not overstocked or out-of-stock
Example:
Watsons uses organized shelves and clear signage (like "Buy 1 Take 1") to draw customers into impulse
purchases.

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San Mateo Municipal College
College of Business and Accountancy
Prepared by Kimberly I. Ciruelos
B. Pricing Strategy
Definition:
Retail pricing is the process of setting the selling price of goods in a way that reflects costs, competition,
and perceived value to the customer.

Common Pricing Strategies:

1. Everyday Low Pricing (EDLP): Constant low prices (e.g., Puregold)
2. High–Low Pricing: High prices with frequent promotions (e.g., SM Stores)
3. Psychological Pricing: ₱99.99 instead of ₱100
4. Bundle Pricing: Two or more items sold together at a discount

C. Promotion Strategy
Definition:
Retail promotion involves communicating with customers to increase awareness, interest, and purchases.
Examples of Retail Promotions:
• In-store: Discounts, buy-one-get-one, free samples
• Loyalty Programs: Rewards for repeat customers (e.g., SM Advantage Card)
• Online/Social Media: Ads, influencer promotions, TikTok campaigns
• POP Displays: Signs placed near checkout counters or aisles

Lesson 3: Trends and Challenges in the Retail Industry

A. Technology in Retail
Definition:
Technology in retail refers to the use of digital tools, platforms, and systems to improve customer
experience, store operations, and marketing.

Examples of Retail Technology:

• E-commerce platforms (Lazada, Shopee)
• Cashless payments (GCash, Maya, credit cards)
• Self-checkout kiosks
• AI chatbots and customer service automation
• Inventory management systems
• Augmented Reality (AR) for product previews

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San Mateo Municipal College
College of Business and Accountancy
Prepared by Kimberly I. Ciruelos
Impact on Retail:
• Increases speed and convenience for customers
• Offers real-time inventory updates
• Enables personalized shopping through data analytics

B. Sustainability in Retail
Definition:
Sustainability in retail means adopting eco-friendly and socially responsible practices in product
sourcing, packaging, store operations, and customer engagement.
Examples:
• Reusable or biodegradable packaging (e.g., The Body Shop)
• Eco-friendly products (organic goods, refill stations)
• Recycling programs (e.g., H&M garment recycling)
• Local sourcing to reduce carbon footprint

Why It Matters:
Today’s consumers (especially Gen Z and Millennials) prefer brands that care about the environment and
ethical sourcing.

C. Ethical Issues in Retail

Definition:
Ethical retailing involves making business decisions that are morally right, fair, and responsible toward
workers, suppliers, customers, and society.

Common Ethical Issues:

• Labor Practices: Fair wages, safe working conditions
• Truth in Advertising: No false claims or misleading promos
• Privacy and Data Protection: Respecting customer information
• Diversity and Inclusion: Non-discriminatory hiring and services
Examples of Ethical Retailing:
• Brands avoiding child labor in supply chains
• Honest product labeling (e.g., "cruelty-free" or "vegan")
• Transparent refund and return policies

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San Mateo Municipal College
College of Business and Accountancy
Prepared by Kimberly I. Ciruelos