Retail Marketing Mix

19/07/2020 0 By indiafreenotes

The various communication devices are used to educate, inform and generate awareness about the merchandise and the services offered by the retailer. These efforts also aim at building store image. The most common modes used for promotion are advertising, sales promotion, personal selling, public relations and publicity.

Retailers usually employ a combination of various elements of promotion mix to achieve promotional and business objectives. The degree and the nature of usage of each of the promotion methods depend on the objectives of the retail firm, product, market profile and availability of resources. Small retailers generally depend on point-of-purchase material provided by the companies which provide the merchandise.

Promotion mix employed by the retailers should be compatible with the desired store image, provide scope for modification if need arises and fit within the budget allocation. Therefore, various retail promotion methods can be compared on the basis of degree of control, flexibility, credibility and cost associated with them.

The four important types of retail marketing mix are discussed below:

  1. The ‘Product’ Mix

The basic components of product mix are:

(ii) Packaging

(iii) Brand

(iv) Product Item

(v) Product line

The various product mix strategies are:

(i) Launching new products from time to time

(ii) Alteration of Existing Products

(iii) Eliminate an entire line or reduce assortment within it

(iv) Trading Up

(v) Trading Down

(vi) Product life cycle management

The retail product mix is device so as to develop an appropriate promotion strategy for the store depending on the target market to be reached. Once the target market is identified and positioning strategy defined, the retailers employ various tools of product mix to reach out to consumers. These efforts also aim at building store image.

Retailers usually employ a combination of various elements of product mix to achieve promotional and business objectives. The degree and the nature of usage of each of the promotion methods depend on the objectives of the retail firm, product, market profile, and availability of resources.

  1. The ‘Price’ Mix

Price has always been one of the most important variables in retail buying decision. It is the factor which makes or mars a retail organization. It is also the easiest and quickest element to change. Pricing helps an organization to achieve its objective. This is particularly significant for new market entrants who need to first establish a brand and then enjoy increasing profits as the brand gets market acceptability. For a customer, price is the main reason to visit a particular store.

A pricing strategy must be consistent over a period of time and consider retailer’s overall positioning, profits, sales and appropriate rate of return on investment. Lowest price does not necessarily neet be the best price, but the lowest responsible price is the best right price. The difference between price and cost is the profit, which can be very high when the salesperson wants to exploit an urgent situation.

To survive in the retail business, retailers need to seek cash flow, profitability and overall growth in order to consolidate their market position. But pricing cannot be determined in isolation. Costs and operating expenses are equally important while establishing the retail price.

Servicing pricing pursues the ‘doctrine of pricing of goods’, therefore, they are either cost-based or market based. Within this, these pricing can be profit oriented, government controlled, consumer oriented or competition oriented. Pricing needs certain considerations before actually determining it. The market position of the product, consumer perception and stage of the product life cycle, competitor’s strategy and overall marketing strategy needs to be considered.

The components of price mix are:

(i) Organizational objectives

(ii) Competition

(iii) Cost and profit

(iv) Credit terms

(v) Discount etc.

(vi) Fixed and variable costs

(vii) Pricing options

(viii) Pricing policies

(ix) Proposed positioning strategies

(x) Target group and willingness to pay

  1. The ‘Place’ Mix

The retailer should keep in mind the fact that his ‘product’ should be available near the place of consumption so that the consumers can easily buy it. If the brand preferred by the consumer is not easily available at a convenient location, he may buy some other brand in the same product category.

Hence, the retailer has to ensure that the product is available to the target consumers whenever required. There are two major components of place: marketing channels and physical distribution (logistics management). Channel decisions affect considerably the elements of marketing mix and involve a long term commitment of resources.

Intermediaries involved in channel network are independent (at times contractual) organizations hence their needs must be taken into account while evaluating channel alternatives. The success of marketing efforts, to a large extent depends on the sound distribution network.

Physical distribution involves transportation, warehousing, material handling, bulk packaging etc. Some of these activities are carried out by intermediaries. A considerable coordination is required among various channels to seek maximum results of marketing operations.

Following are the components of a retail price mix:

(i) Distribution channels

(ii) Intermediary

(iii) Distance Factor

(iv) Inventory Level

(v) Transportation

(vi) Warehousing and Storage

  1. The ‘Promotion’ Mix

After deciding upon the budget, retailer should determine the appropriate promotional mix a combination of advertising, public relations, personal selling and sales promotion. Small retailers having limited funds may use store displays, hoardings, direct mail, flyers and publicity methods to attract customer traffic, while on the other hand, retailers having no bar on finance, may use print or television media for their sales promotion activities.

The retail promotion mix varies from retailer to retailer and nation to nation depending upon technological advancement, nature of competition and availability of finance etc. Retailers design a promotional mix in compliance with store’s objectives such as positioning of the organization, attracting customers, increasing sales turnover, clear out seasonal merchandise, announcing special events and educating public about the organization and its offerings.

Retailers generally spend their promotional budget on developing advertisement campaigns and on other sales promotion activities. A retailer has a variety of sales promotion methods to promote its goods and services. Therefore, promotion mix used by the retailer should be compatible with the desired store image, budget allocation and flexible enough to modify whenever need arises.

These various promotional vehicles may by compared on the basis of following issues:

(i) Cost of the method

(ii) Its reach

(iii) Degree of flexibility

(iv) Credibility

(v) Control over media