What is Private Label Branding in Retail Marketing? MBA marketing study material.

Private label branding in retail marketing is another fruitful raised area for the retailers to stand in the modern competitive environment. The process of producing the products which are controlled and marketed by retailers with their name is called as a private label branding. Let’s have a look into this in detail.

What is Private Label Brand?

Private label branding is the process of manufacturing the goods or products by a company or third party and sold these products under the name or label of the retailers. In this case, the retailer is responsible for the labeling everything about the product like ingredient, dates, price, usage etc. Private label brands are widely available in the local market with the range of product lines variety such as food, cosmetics, household items, personal care etc.

These products are the best alternative for nationally recognized brands as it is less expensive with the same quality and value. It can be called as a good value for money on par to the big brands. Sometimes, retailers are facing a problem of misconception about the quality of the private label brand products in public as it is available at low cost. So let’s have a look at Advantages and disadvantages of private label branding in retail marketing environment:

Advantages of Private Label Branding:

·         Regulate and maintain flexibility over the pricing:

Control over the pricing is the main advantage of private label branding. When manufacturer transfers the ownership of the products or goods, it gives the full freedom and flexibility over the pricing decisions to the retailers. So it’s beneficial for retailers to regulate price on products.

·         Higher profit margin:

As the retailers can regulate the price of these products or goods, they can earn the higher margin of profit by adding the cost to it. There is a full liberty to the retailers for their cost applying on the products.

·         Wide range of product assortment:

Private label branding always aiming for expanding its trade-in market, therefore they are offering a wide range and variety of products to fulfill the needs of the consumers. Retailers are always aware of the regular supply of the product hence private brands have always resolved the problem by offering huge assortments of products.

·         Cost effective promotion:

Private label brands can bear the cost of promotion and packaging as the retailers themselves have the ownership of the goods. In fact, putting the products in the store under the name of retailers gives the chance to build own unique image and identity in a market with no extra promotional cost.

·         Low Competition:

Private label products are always at a low price as compared to the nationally recognized brands. It gives the chance to build competitive advantage for retailers to stand in retail market reduce the competition by offering a low-cost product with same quality and value.

Disadvantages of Private Label Branding:

·         Production dependency:

In a private branding, the products are manufactured by the third party, not the retailers so, retailers have depended upon the manufacturer all the time in a production process. It’s very crucial for the retailer to deal with the well-established manufacturer to avoid any obstacles.

·         Low accessibility:

Nationally recognized brands are already established in the competitive market environment and they have upper hands. These products are available anywhere in the region. But in case of private label products, these are only available at the limited retail store and give a reason to low accessibility.  

·         Low Quality offering:

Sometimes but not often, There may be bare low-quality offerings made at a lower cost of production because not having a control over the process of production which leads to getting tough to build a loyalty among the consumers.

Even if there are some drawbacks, private label branding is still a prominent way of retail marketing to earn the benefits for the retailers. 

Merchandising in Retail Marketing. MBA Marketing study material.

From at the beginning of choosing specific products to sell, buying it in wholesale till the end of the process by resale it to the end users and make a profit is a model of merchandising in the retail marketing environment.  Merchandising is a common practice of every set of business where products are displaying and selling to the end users. To influence the consumers and increase the sales volume is the main function of merchandising, whether it’s digital or in-store.

Merchandising:

“It is a process of offering a right product, with a right quantity, in right place, at right time to the right person to meet the organization’s financial goal”

Merchandiser:

“A person whether a wholesaler or a retailer, who buy the products or goods from the several sources for resale to the end users to make a profit is called as a merchandiser”.

Merchandiser always bond to a higher standard of duty of care as he supposed to have expert knowledge about products he engaged in.

Role of Merchandiser:

A merchandiser typically responsible for-

Planning and Forecasting:

Selecting a product category and Forecasting the budget and sales in the selected area.

Leading and Sourcing:

Leading and guiding the team and searching for various appropriate sources to purchase the products. Making a purchase order with suppliers.

Maintaining budget:

Making sure about the cost of products and budget planned. Work on the cost of the products

Co-ordinating and Controlling:

Co-ordinating with the suppliers about the shipment and controlling the stock or inventory purchase.

Evaluating Sales:

Analysing the performance of product and process and evaluating sales and profit margin.

Retail Merchandising Management Process:

·         Analysis:

It is vital to understand the needs or wants of consumers to the retailer. A retailer needs to identify and analyze target audience before pitching the products.

·         Planning:

Planning involves the process of selecting the right product, from the right supplier and sells it at the right price, in right place and at right time and quantity.

·         Acquisition:

Retailers need to take a lead to purchase the selected products in the estimated budget by appropriate suppliers. Retailers can purchase the goods from one or more than one suppliers.

·         Pricing:

In this step, retailers need to make a decision on the pricing structure of the products which are going to sell. It’s important making sure about the profit margin considered while making a price structure.

·         Handling and Control:

Maintaining a stock of goods is very important and costly process for every retailer. This is a process of spending money on maintaining a stock of goods at right time and in a right condition.

As we can see in this post, merchandising is a routine activity of every retailer. In retail, no one can avoid the merchandising.

Strategies for Retail Marketing. MBA Marketing study material.

Planning marketing strategies for retail business is an immense decision process especially when retailers are not getting enough footfall for the store. The process involves the strategies from the target market, positioning, retail format to sustainable competitive advantage. Strategies for retail marketing is a process of making wise decisions on every marketing action involved in the retail business. Retail store strategies are nothing but the decision-making process while applying retail marketing mix.

Following are the points to be considered while planning the strategies for retail marketing.

·        Target Market:

Target Market is a part of market segmentation where the whole market has divided into a subgroup according to the common features and selecting or focusing on the appropriate group(s) for smearing various marketing resources and retail marketing mix. Targeting a market allows the retailers to make a choice of product assortment, level of service delivery, a place to trade etc. Target market helps to grow business with little competition and more profit margin which leads to consistency in competitive advantage.

·        Retail Positioning:

Positioning in retail businesses is how the retailer positioned in the final market by differentiating itself with product or services offerings. Positioning assists the retailers to raise the competitive advantage by differentiating itself from competitors and can readily recognizable by its target market.

·        Retail Format:

The format of a retail store is a general nature of the business operation in terms of marketing mix such as range of product and services, pricing strategies, promotional programmes, store design etc. There are many types of retail store formats which are explained in the previous post such as supermarket, department store, shopping malls, convenience store etc.  

·        Sustainable Competitive Advantage:

Competitive advantage is an outperformance of store over competitors. It only exists when the store in retail business consistently outperforms other stores in the same market. The store is able to maintain it for a long period of time then it can be a sustainable competitive advantage for the store. Long-term competitive advantage should not be easily duplicable by the competitors. It is an ability of a store that difficult to exceed.   

Strategic Retail Planning Process:

The strategic retail planning process is a set of steps that retailers take in order to figure out how to target, positioning the market and how to maintain a sustainable competitive advantage. Following are the steps for strategic retail planning process:

1.      Define Store’s Mission and Objective:

At first step, retailers need to make a mission statement which involves a broad description of retail store objectives and long-term plan to undertake.

2.      Conduct a Situational Audit (SWOT Analysis):

A situational audit is a very common strategic tool to analyze store’s strength, weakness, opportunities, and threats (SWOT) in a retail environment.

3.      Identify Strategic Opportunities:

To improve the sales dimensions, searching for the opportunities is a key step. By getting and evaluating the strategic opportunities it concludes the abilities of retailers to establish a bearable competitive advantage.

4.      Establish Objective and Assign Resources:

After evaluating the opportunities it’s time to place objectives or aims for each and every opportunity to reach towards a main retail objective.

5.      Develop Retail Mix:

In this step, a retailer has to invest the resources into a retail marketing mix. Retailers need to make a decision on a product, price, place to distribute and promotional activities.

6.      Analyse the Performance:

In case of failure of any strategy, a retailer needs to study each step taken to analyze the performance and change the plan accordingly to meet the objective. 

What is Trade Area Analysis in Retail Marketing. MBA Marketing study material.

Location is one of a very important factor in retail marketing strategies. Consequently, analysis of trade area for retail store allied with distinct planning with complex processes. Trade area analysis is a study of the contiguous geographic area to measure the key statistics affecting the store performance. The aim of this post is to demonstrate the concept and process of trade area analysis in retail marketing. 

The concept: Trade Area Analysis

Trade area analysis is a method, technique or study to provide an understanding and visualizing the approximate extent and scope of a geographic area for trading. This analysis also helps to make available the information like store backing, local market opportunities, competitive data, and barriers that would discourage consumers from visiting the site.

A trade area may include a city, district, state, country or even beyond the country for international retail business strategies.A figure below indicates the layers of trade areas:

·         Primary area: Highest store customer’s density (approx. 60-80%)

·         Secondary area: Medium store customer’s density (approx. 10-20%)

·         Territory area: Lowest store customer’s density (remaining)

Approaches to Trade Area Analysis:

1.      GIS Mapping Software:

Geographic Information System (GIS) is a digital mapping software which provides a geographical data with mapping techniques to select the trade location accurately.  It combines the mapping with data for key locations to the graphical view including demographic factors of population, data on customer purchase and competitor’s data. Currently, there is more such software are available in the market.

2.      Radial Analysis:

Radial or ring-based analysis is the easiest method of trade area analysis in retail. This analysis assumes that the trade area is round or a ring and store are located in the center of this ring. It is executed by calculating demographic variables that fall in the selected circular area from the store.

Above image of the radial, the analysis indicates the store located at the center of the ring. Dots are the demographic sites. Red dots are fallen within 5 miles of radius.

3.      Gravity Model:

A gravity model of trade was firstly presented by Jan Tinbergen in 1962. It is based on bilateral trade flows between two different geographical distances can be measured by applying Newton’s gravity equation. This model suggests that two relative economic distances attract each other to trade. Below is the equation of gravity model:

1^st Area population * 2^nd Area population / Distance between Area

4.      Drive Time Analysis:

This is GIS-based analysis to indicate that how many people live within 30 minutes of drive time from a store? It also helps to calculate the overlap between the distances measured in time from the store. It is most recent trending and used software to analyze trade area. It is a study of the road network which combines the advanced digital GIS modeling technology to gives an accurate data.

Above image of drive time analysis showing areas that can be reached within 5, 10 and 15-minute drive times from the selected store location.

Store Location and Layout in Retail Marketing. MBA Marketing study material

Designing a retail store location and layout is a process of using store place in a premeditated and tactical way to influencing the customers and boost the sales margin. Store location and layout designing are directly affected by consumer’s buying behavior. The escalation in footfall into the store place mostly depends upon the interior, layout, location of the store. This post gives a wide-ranging overview of store location and layout in retail marketing.  

Types of Retail Store Location:

1.      Mall Space:

Malls consist big center in which many brands and retailers are competing with each other under one roof as discuss in types of retailers. There are a variety of stores and shops format in mall space. Leasing amount in the mall is much bigger as compared to other locations.

2.      Shopping Centres:

These are the strip malls, commercial building with retail shops or shopping complex where there is a range of retail shops exist. Leasing contract with shopping centers indulgent than a mall. There are minimum 3 units up to 20 shops in one building with limited parking area.

3.      Downtown Area:

Downtown is a core area which is located in heart of the city. Getting a store on lease basis is much easier with fewer rules. The store may locate in a commercial building or strip shops. It’s a premium choice of store location in this kind of area but limited parking space is a big issue for this.

4.      Free Standing Locations:

Free standing location is any area or single detached building or residence which can be used for business operations. This can be located in the neighborhood, any busy highways or residential areas. This is beneficial in terms of leasing amount with free from rules.

5.      Home-Based:

Initially, all the businesses get a kick from home itself, but some of the businesses are taking a decision to continue with it in the home itself. This location is inexpensive and reliable but a challenge is to attract customers in this kind of locations.

Types of Retail Store Layout:

1.      Straight Layout: Ideal use of walls and create a free space to move freely :

2.      Diagonal Layout: Crosswise arrangement of racks:

3.      Angular Layout: Curve shape arrangements with a sophisticated design:

4.      Geometric Layout: Trendy design with symmetric arrangements with racks.

5.      Mixed Layout: Mixture of Diagonal, geometric and angular layout space:

Retail Marketing Segmentation. MBA Marketing Study Material.

Segmentation is one of a very dynamic and expedient tool for marketing. This post is an effort to clarify what is a segmentation and how the segmentation is beneficial for retail business practices to gain competitive advantage.

What is Market Segmentation?

Market Segmentation is a dissemination of total market into small groups according to some communal features to approach a target market for potential customers. The aim of segmentation is to identify a group with an uppermost probability buy products or services and organization can direct all marketing efforts to that group.

Retailers can be relish by adopting the market segmentation process in their business to attract customers and sustain them for a longer period of time.

Segmentation Process in retail Marketing:

Below figure can make you clear about the overall process of market segmentation.

Parameters of Retail Market Segmentation:

1.      Geographic Segmentation:

Dividing a market into a subgroup according to geographic place is called as a geographic segmentation. This segmentation can be done with the location of city, country or region, a climate of location, size of the population or through the density of area market can be divided into urban, suburban, rural etc.

2.      Demographic Segmentation:

Demographic segmentation consists the process of dividing a market into sub-segments according to age, gender, religion, language, income, marital status, education, occupation, employment or culture etc.

3.      Psychographic Segmentation:

In this type of segmentation, a market can be divided into a subgroup according to the psychology of customers. Subgrouping can be done in this segment through analyzing interest, hobbies, lifestyle, values, and ethics, learning involvement, perception, and attitude of people.

4.      Behavioral Segmentation:

In behavioral segmentation, retailers need to analyze the curiosity and behavior of people while purchasing a product or services by segmenting a market into a subcategory. A market can be categorized by frequency of purchase, user status or user rate etc. It can be divided into a subgroup of loyalty status or awareness about product or service etc.

Above are the common parameters of segmentation which can help to focus on marketing efforts.

Product Retailing Vs. Service Retailing. MBA Marketing Study Material.

Service section in every economy is as important as a product since it’s been proved that public spent 50% of its earning for all personal use of service. This post describes the differences between product retailing and service retailing.

Product Retailing	Service Retailing
Products are tangible in nature, consequently, overriding factors in product retailing which define the success of product are cost and quality of a product.	Services are intangible in nature, hence factors that overriding in service retailing which describe the success of service are timeliness, behavior and knowledge of service delivery professionals.
As products are physically available the relationship between retailers and customers can be developed by the frequency of consumer’s visit to the outlet or website in case of online business.	In case of service retailing, services are not physically available and cannot be touched and so the relationship between retailers and customers can be developed by only start buying it at least once.
In product retailing, it can be sorted, arranged and organized well.	In service retailing, services are intangible in nature and so cannot be sorted.
Standardization is an important factor which can be maintained in product retailing through a consistency in the production method.	In case of service retailing, standardization cannot be maintained due to the involvement of human being as service delivery professionals.
Transfer of ownership is possible in case of product retailing. Once the product gets purchased by consumers the ownership of the product is transferred automatically from the retailer to the consumer.	Transfer of ownership is not possible in case of service retailing. Consumers are the end users of service hence the ownership will remain with service provider only.
Products are not perishable and can be stored for future use. In product retailing, production is the first process where a product can be invented before storing it.	Services are perishable and cannot be stored for further use. Production and consumption is a simultaneous process in service retailing. Therefore it’s difficult in this case to balance supply and demand in same time.
In a product retailing, customers or the end users are not necessarily present at the time of a transaction.	Here at service section, customers or end users must be physically present at the time of service delivery transaction.