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Evaluation of retail marketing Essay


Introduction

Through out their existence, organizations and businesses are considerably pressured to raise their levels of performance and productivity. This is especially so in the modern day business environment which is characterized by aggression and excessive competition thereby constantly forcing businesses to exhibit innovation and enhanced performance so as to remain relevant and profitable in the ever increasingly competitive arena.

To achieve the organizational goals of increased productivity, the input of both the individual and groups in the organization remains invaluable. However, for these inputs to make optimal impact, the organization must have a strong marketing strategy to steer it and its products in the right direction. This being the case, the development of marketing plans and skills is indeed necessary for the survival and continued success of any organization.

The Twentieth Century has seen the increasing dominance of formal retailing (e.g. retail multiples, shopping centers (malls) and internationalization of major retail brands).

The retail marketing literature has tended to focus on these phenomena whilst failing to appreciate that many household purchases and acquisitions are undertaken via non-formal retailers (e.g. farmers markets, swap meets, jumble sales and car boot sales).

This paper sets out to discuss what determines exemplary retailing in a business setting. This shall be achieved by going into a detailed discussion regarding to effective retailing. The factors that influence consumers to use non-formal retailing shall be discussed and an analysis shall be carried out to evaluate the extent to which the retail mix is relevant to non formal retailing.

Brief overview of formal and non formal retailing

Cox and Brittain define retailing as the direct sale of goods to consumers in small quantities (17). This aspect of business transaction has been in existence for a very long time. It has revolutionized from the barter trade system to the money based system and has gone to the next level (e-Marketing) in recent times.

However, due to improved business models and strategies, retailing has been divided into two categories which are; formal and non formal retailing. As mentioned earlier, formal retailing refers to the sale of goods through multiple retails, shopping malls and internationalized retail brands.

It is a more organized and efficient way of transacting with deeper managerial and financial aspects. On the other hand, informal retailing takes a more traditional face whereby transactions are carried out through farmers markets, swap meets, jumble sales and car boot sales. It lacks permanency and requires very little resources to establish or maintain.

Retail marketing

Marketing plays a pivotal role in the selling process of any given product. This is because marketing helps in the promotion of new and existing products, enhances consumer loyalty and is a vital tool in ensuring that a product attracts a large market base. According to Krafft and Mantrala, the consumer’s attitude plays a very important role in retail marketing (214).

Retailers should always know that retail marketing is driven by consumer’s needs and wants. As such, it is basically about satisfying these needs. The authors further contend that what the customers buy defines the nature of the retail business (Krafft and Mantrala, 224).

The main aim of retail marketing is to develop products that are highly demanded by the target market and sell them at a price that will yield the most profit all the while maintain a substantial percentage of the market. The main disadvantage of retailing is that most retailers sell the same product.

Therefore, overpricing the shoppers may lead to the loss of the market base. As such, the best way to ensure high profits in the retail business is to lower production costs and utilize product differentiation techniques. Such marketing decisions ensure that the shoppers are loyal and at the same time eliminate any possibility of aggressive competition from other retailers.

Varley asserts that a good retail marketing strategy should be stimulating, fast and influential towards the market (69). Among the essential aspects that should be considered in retail marketing are; product planning, customer analysis, market research and environmental factors.

To ensure success in the retail business, retailers should acknowledge the fact that it is the customers and not the demand that lies at the center of a retail business. The attitude of the consumer towards a product is what ensures that a retailer yields satisfactory profits and returns to investments. Therefore, the success of a retail business depends on the retailer’s ability to identify, anticipate and satisfy the customer’s immediate desires.

Marketing in the retailing business is important because it identifies the current needs of the consumers that are unfulfilled and then defines them to present viable solutions for the same. It can be viewed as a tool through which the desirable standards of living can be achieved.

In addition to this, it ensures that consumer needs and wants are satisfied; a factor that ensures consumer sustainability and loyalty. To further ensure success in a retail business, the retailer must at all times ensure that he has set objectives for his marketing strategy. Varley states that a retailer must have targets (short term goals with immediate results), objectives (stipulates the long term purpose of the retailer) and goals which are a prerequisite to the success of the business (116).

Retail marketing mix

Retail marketing mix can best be described as an array of elements as well as the methods that retailers use in the formulation and implementation of the desired retail marketing strategy. It is always important that the retailer adopt the most favorable retail activity mix and manage them in a manner that will ensure that they compliment each other.

The main purpose of such a coordination is to ensure that each retail store have its own image in the mind of the consumer. The mix adopted is mainly influenced by the type of products or services that a retailer is dealing with as well as the market type the retailer is in. The main elements that should be considered while developing a retail marketing mix are; product, price, place, promotion and people.

In terms of product, the retailer must consider branding, packaging, product development and management as well as the features and benefits that the product has. These are very important elements because they determine the retailing potential of a product. For example, in the fast foods sector, consumers tend to buy from shops that have recognized brands and quality packaging because in their mind, they perceive and relate such stores with quality services yet they sell the same products as many other stores e.g. Mc Donald’s fries.

In regards to place, the retailer must always consider the proximity to target market, retail distribution and his image. This goes hand in hand with promotion and price. This means that the level of promotion a retailer has as well as the price range of his products determines the consumers desire to visit that given retail store. The people element applies in the sense that retailing is all about the people and not the product.

Literature review

This book gives detailed information about the advantages and disadvantages of the retail sector in any given economy. It also highlights the policies that are put in place to manage and monitor activities in this sector in a bid to ensure fairness and healthy competition prevails.

Findlay has provided some insight on the problems that retailers may face in the future in terms of funding, escalating costs and public policies (71). The author clearly state that retailing will in the future plays a pivotal role in the development and growth of the US economy. Findlay concludes by saying that the emergence of new technology gives the human race an opportunity to further interact and transact both within their social niches and beyond (502).

Betancourt embarks on the hefty task of describing why the retail sector is necessary. He claim that incase of complications and problems (technical or otherwise) in the corporate sector, retailing stores may go a long way in providing solutions and assistance whenever required (78). The author claims that the retail sector provides employment and enhances innovation.

The author also gives a detailed description of the retail sector, how retailers operate and how they handle intense competition from the corporate sector. To further support the presence of the retail sector, the author has given the names of countries that have been boosted by this sector. This book is applicable in this study because it provides credible information about the importance of the retail sector in a world where profitability takes precedence over the satisfaction of human wants and needs.

Laudon and Traver explore the economic effects of retailing to other businesses. They state that this sector may lead to the collapse of the economy if not monitored. This they claim is because there are no strict rules governing the pricing, demand or supply in this sector (especially informal retailing) (27).

The authors also reflect on the importance of taxes in any economy. He states that the informal retail sector is less likely to pay taxes because most of the stores are not registered or licensed. Due to the increased number of dealers in this sector, the government stands to loose a lot of money if the retail sector expands.

Levy and Weitz discuss the concepts of the retail mix. They assert that understanding all the activities involved in the retail business is essential to the success of the business (67).

The authors claim that it is important for the retailers to be able to coordinate the prices, products, promotion efforts and the people involved in any given transaction such that they yield the expected results. In their book, the authors acknowledge that the ability to understand the consumer’s needs and desires can only be manifested through an effective retail mix.

Samli explores the impacts of local culture to retailing. In his book, he asserts that consumer behavior is to a large extent affected by the prevailing culture within a given setting (216). The author states that very little of marketing theory and knowledge is used in informal retailing. This he contends is because most of the sellers in this segment rely on social bonds and instincts to market and sell their products.

In this book, he explains how people willing to venture into the retail business can learn how to market so that they can better compete with others in that sector as well as corporations that deals in the same products. He states that in as much as culture plays a pivotal role in this sector, having marketing skills may assist the retailers in acquiring a larger market and guarantee consumer satisfaction by being reliable and flexible to their needs.

Impacts of technology to non-formal retailing

Since its conception, technology has been hugely influential in the development of the society and marketing in the business sector. The media can be used to drive public opinion, report on current news and advance some social values. The media is at best a complex genre which may be broken down into a large number of sub-genres e.g. news stories, opinion columns, advertisements and horoscopes to name but a few.

One of the key facets of the media is the advertising sub-genres. Croteau and Hoynes suggest that the heavy emphasis of advertisements in media is due to the fact that it is the best means of product promotion (145). The influence that advertisements have on the people is colossal as can be inferred from the rise in sales for corporations and business entities that engage in advertisement of their products. Most advertisements are therefore keen to include messages that are beneficial to the consumers.

Advertising is defined by Lester as “any form of non-personal presentation and promotion of ideas, good and services by an identified sponsor” (89). The primary objective of an advert is to promote the sale of the product being advertised. Elements represented in advertisement can signify a myriad of meanings apart from the very obvious message that the advertisement image purports to sell.

An image can denote varying directions and be made to evoke deeper sentiments from the viewer and from a simple image; one can build up an entire story. All this is in an attempt by the creator of the advert to persuade the consumer to think, feel or act in a predetermined manner.

In non-formal retailing, technological advancement such as the internet has helped in the marketing and sale of products. In this case, the products are sold online in a website and therefore the advertisements exist within the context of a website.

Some of the popular avenues through which technology has infiltrated informal retailing include e-Bay and Amazon.com. Amazon was started by Jeff Bezos as “the world’s biggest bookstore” but slowly changed from this single-product model to a multi-product enterprise which deals with a wide collection of products satisfying an even broader base of consumers. Lester concedes that Amazon.com has established itself as a household brand in the USA and is arguably the best-known online brand (2).

while offering of ” free shipping plans” and express shipping services is expensive and does cut into the profit margin of the company, online retailers should continue to offer these services to their clients. Competition in the online retail market is ever increasing and as such, a company needs to give itself a competitive advantage over its competitors. These “super saver shipping” scheme offers one such means since it proposes to offer the consumers value added services thus setting sites such as Amazon.com apart from its competitors.

Considering that online marketing strategy is pegged on an increase in customer traffic so as to promote repeat purchases and strengthen the brand name, the free shipping plan appeals to customers thereby leading to an increase in the traffic on the site. Pasiuk confirms that Amazon considered its free shipping offer as a marketing expense whose primary objective is to attract and retain customers (102).

While there is no doubt as to the increase in cost that Amazon.com incurs due to this schemes thus leading to decreased profitability, the increased traffic leads to increased turnover for the company. This leads to increased profits which compensate for the relative cost incurred in the provision of the services.

Membership plans lead to loyalty and a sense of affiliation to the company by the consumers. These plans involve increased customization which entails tailoring of services so as to suit the unique case of the customers (Hill and Jones, 123). While this does come at the cost of having to offer customized services which lead to rise in cost structure, it enables online retailers to respond to customer demands very quickly to the advantage of both the customer and the company.

In addition to this, retailers are able to display their products and attach their respective prices. Consumers can therefore log into these sites, search and eventually purchase their desired products.

This form of retailing is advantageous to the retailers because it is cheap to establish as compared to conventional stores and it does not require a lot of resources or marketing because the websites are well established and known. The consumers also gain from these sites in that they save time (can be done in the comfort of your home), their decisions to buy are not affected or manipulated by sales personnel and they get after sale services like free shipping and delivery services.

Factors that motivate consumers to use non-formal retailing

Hill and Jones affirm that reputation is a very important concept in the relationship between a buyer and a seller (47). This they contend is because it represents the retailer’s ability to be trusted. In non formal retailing, the retailer’s reputation in regards to performance, service delivery and trustworthiness determines his consumer’s loyalty.

As such, if a retailer upholds a reputation characterized by fairness, trustworthiness and good performance, then consumers are motivated to buy from him because in the consumers’ mind, the retailer is perceived as reliable and consistent.

Performance satisfaction is another factor that motivates buyers into using non-formal retailing. According to Varley performance satisfaction can be described as the extent to which a retailer can fully deliver as per the consumer’s requirements (37). When consumer’s needs are satisfied, they are motivated to continue their relationship with that particular seller. This leads to the establishment of trust and a long term commitment between the retailer and the clients.

Trust also acts as a motivating factor in retailing. Most buyers buy from specific stores because they have an established long term relationship based on trust with the retailer. In non formal retailing, the seller specializes in a given area and products. As such, most of their clients know them and what they sell. As a result, they feel obligated to buy from these retailers because they trust them and their products.

Social bonding may to an extent motivate clients into using non formal retailing. Arvidsson reiterates that it links and holds the customer and the retailer together (76). It represents the mutual friendship that exists between the two parties. As such, consumers may decide to buy from a retailer because they know the seller and have a chance to bargain or negotiate the prices. This gives them some authority in the transaction which further establishes a shared meaning between the buyer and the sellers.

Apart from the social structure, there are other factors that may affect the buying decisions made by consumers in non formal retailing. Local culture presents one such factor. In any given society, there exist some behaviors and activities that are common to the people that live there.

Activities such as designated market days, yard sales among others have enabled non formal retailing to thrive in many regions across the globe. In many cases, consumers rely on the same retailer because it has been a family culture to buy specific goods from a specific dealer. As such, their minds are set and they have more confidence in buying from that particular retailer.

The retail mix and non-formal retailing

Informal retailing is characterized by a general lack of permanence. Examples include hawkers, tuck shops and seasonal sales. The informal retailing sector contributes a considerable amount of income to any economy. This is because it provides goods and services for the less affluent households in the society whose household needs are easily and aptly supplied by the retailers. Despite the characteristics of these informal retailing stores, they continue to thrive.

The retail mix is very applicable in this form of retailing. As mentioned earlier, the success of any business depends on the ability of the owner to market his products. The retail mix is therefore very important in any business irrespective of its size, nature or management technique.

This is because it helps in attracting the consumers. As such, the variety of goods offered, the pricing policy, promotion and advertising, layout, location and personal selling do factor in to ensure that products are sold. Though informal, competition still exists in this sector and it is therefore important that the retailer devise means to tackle it.

Much consideration should be directed towards the competition present in the targeted market. This refers to both the substitutes and differentiated products. Allison & Kaye reiterate that a business can collapse due to poor management, marketing and promotion experience in various sectors (84).

As such, they recommend that a SWOT analysis should be carried out on both internal and external variables that may affect or benefit the business through the SWOT analysis, the retailers are able to identify the strengths, weaknesses, opportunities and threats present in the target market.

On the same note, they are better placed to make decisions on how the available resources should be allocated within the business in order to counter the weaknesses and capitalize on the strengths. For example, through a SWOT analysis, the retailers may decide to focus their attention on product differentiation which will consequently boost up the levels of production as well as the quality giving their businesses an added advantage against the rivals.

Also, they may decide to allocate resources into advertisements and promotions to further create awareness of their product to the public and market their product. Through the SWOT analysis, the weaknesses of the competitors may be uncovered and untapped opportunities discovered and with this information, the retailers are able to base and give accurate solutions without the risk of exposing themselves financially or mismanaging the funds.

The target market is by far the most important feature in the business cycle. The bigger the market size, the higher the profits. In light of this statement, retailers in the non formal retail sector should at all times keep an eye on the market trends and how they affect their business, this is because the market is the lifeline of any business and if unchecked it may lead to huge losses to the business. In order to capture a bigger market base, there are various tools that may be implemented.

The retailers may decide to use external sources of finance to increase their output base and then use the proceedings to buy out the weak competition (amalgamation). In so doing, they are also able to consume the market base of the smaller business plus they acquire the resources used by that company. This reduces the marketing costs, improves reputation especially in small markets and at the same time, expands the market base of the given retailer.

Kalakota and Robinson (2001) assert that any business entity must continually strive to fulfill customer needs which include; convenience, consistency and reliability. Be it formal or informal retailing, the marketing and selling concepts are still the same and the retail mix therefore applies because it helps in attracting consumers and to foster loyalty and a feeling of trust among consumers (Arvidsson, 75).

Conclusion

Because of stiff competition and the ever increasing influence of corporate outlets in our businesses, retailers need to possess the skills necessary to process and evaluate the constant challenges that are presented to them. Acceptance of business related technology such as the media and the internet is an important front from which to initiate better means of combating these challenges so as to enable retailers to recognize and therefore avoid the negative influences that may affect their businesses.

This paper set out to evaluate retail marketing and the factors that it covers. Aspects such as the retail mix have been covered and the retail marketing mix has also been analyzed. The factors that motivate consumers to use informal retailing have also been highlighted. It is evident that the retailing sector is crucial and there is therefore a need for the people involved in this sector to learn and understand the paradigms that encompass this sector.

This is because the retailing is as vital as any other sector in the economy in the deliverance of quality services and satisfaction of consumer needs. From this paper, it can be authoritatively stated that the retail mix is relevant to informal retailing because it helps the retailers to prepare and handle their market environment to an extent that it delivers accordingly.

Works Cited

Allison, M, J & Kaye, J. “Strategic planning for nonprofit organizations: a practical guide and workbook”. USA: John Wiley and Sons, 2005. Print.

Arvidsson, A. “Brands: Meaning and Value in Media Culture”. USA: Routledge, 2006. Print.

Betancourt, R. “The economics of retailing and distribution”. USA: Edward Elgar Publishing, 2006. Print.

Cox, R and Brittain, P. “Retailing: an introduction”. NY: FT Prentice Hall, 2004. Print.

Croteau, D and Hoynes, W. “Media society: industries, images, and audiences”. USA: Pine Forge Press, 2003. Print.

Findlay, A, M. “Retailing: The evolution and development of retailing”. USA: Taylor & Francis, 2002. Print.

Hill, C. and Jones, G. “Essentials of Strategic Management”. USA: Cengage Learning, 2008. Print.

Kalakota, R. and Robinson, M. “E-business 2.0: Roadmap for Success”. USA: Addison-Wesley, 2001. Print.

Krafft, M and Mantrala, M. “Retailing in the 21st Century: Current and Future Trends”. USA: Springer, 2010. Print.

Laudon, K and Traver, C. “E-Commerce 2010”. NY: Pearson Prentice Hall, 2010. Print.

Lester, P. “Visual communication: images with messages”. Cengage Learning, 2006. Print.

Levy, M and Weitz, B. “Retailing management”. USA: Irwin/McGraw-Hill, 2001. Print.

Pasiuk, L. “Vault Guide to the Top Internet Industry Employers”. USA: Vault Inc, 2006. Print.

Samli, C. “Strategic marketing for success in retailing”. USA: Greenwood Publishing Group, 1998. Print.

Varley, R. “Retail product management: buying and merchandising”. CA: Routledge, 2006. Print.

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Acosta, Z. (2019, April 19). Evaluation of retail marketing [Blog post]. Retrieved from https://ivypanda.com/essays/evaluation-of-retail-marketing-essay/

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Acosta, Zackery. "Evaluation of retail marketing." IvyPanda, 19 Apr. 2019, ivypanda.com/essays/evaluation-of-retail-marketing-essay/.

1. Zackery Acosta. "Evaluation of retail marketing." IvyPanda (blog), April 19, 2019. https://ivypanda.com/essays/evaluation-of-retail-marketing-essay/.


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Acosta, Zackery. "Evaluation of retail marketing." IvyPanda (blog), April 19, 2019. https://ivypanda.com/essays/evaluation-of-retail-marketing-essay/.

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Acosta, Zackery. 2019. "Evaluation of retail marketing." IvyPanda (blog), April 19, 2019. https://ivypanda.com/essays/evaluation-of-retail-marketing-essay/.

References

Acosta, Z. (2019) 'Evaluation of retail marketing'. IvyPanda, 19 April.

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