The Role of Retailer Branding Strategies within Retail Stores - Essay Example

?The role of retailer branding strategies within retail stores Table of Contents Introduction 3 Literature Review 5 Analysis 7 Pricing Strategy 7 Every Day Low Price Strategy 7 High / Low Price Strategy 8 Bundle Pricing Strategy 8 Multiple Unit Pricing Strategy 9 Store Management 9 Store Layout and Store Design 9 Store Atmosphere 10 Integration of Theory and Practice 10 Conclusion 13 Reference 14 Introduction The 21st century world represents a highly interlinked and densely inhabited place. The significant growth and rise of technology and communication since the decade’s beginning, along with the emergence of highly sophisticated technological devices promoted by various telecommunication companies around the world, has brought a massive change in the mode of functioning of societies and businesses in various corners of the world. Talking in a more elaborate manner, it can be said that the high-level communication technologies have helped in the process of diffusing the globalization trends around the world. As a result of the fast spreading of trends of globalization in various markets, it can be said that the consumers located in various regions, countries and continents around the world have started demanding a more enhanced category of products and services, which should necessarily follow the standards of global quality. As a result, this has led to the process of creating a significant pressure on the economies and markets around the world with regard to the demand for globally popular brands of products and services. Moreover, besides the growing demand for various kinds of globally popular products and services in various markets, the governments of countries around the world have realised the fact that, for the purpose of promoting significant amount of growth and development in their individual nations, opening up of the economy is very important. The governments of many countries have now realized that by opening up their previously closed economies, the markets of their respective countries will immediately start developing and growing because of considerable amounts of investments made by various business organizations around the world. It is relevant, in this particular context, to state the fact that many companies, which are present in various markets around the world, will look forward to entering the newly emerged markets of the growing and developing economies for the purpose of consolidating their growth prospects. Talking on this note, it can be said that the international, transnational and multinational companies will focus on the process of making a considerable amount of investment in the new markets in the form of foreign direct investments (FDIs) and foreign institutional investments (FIIs). Talking on the same lines, it can be said that the companies in the international arena will be making significant amounts of large scale investments in terms of FIIs and FDIs for the main purpose of developing the market as well as the business infrastructure in the new markets. This will automatically lead to the emergence of new and large scale job opportunities, which will contribute towards creating a high rate of growth for the emerging economies. Now, with the development of the economies around the world in both the developed as well as the developing markets, it can be said that a significant amount of development will happen in the society and lifestyle of the masses living in those countries. The accumulation and growth of wealth complemented by the factor of an evolving lifestyle of the masses will contribute towards opening of new kinds of services. It is important to quote in the same context that the evolution of new lifestyle trends in the society of the developing economies will lead to a significant change in the consumer behaviour of the masses. This will also present a significant amount of opportunity with regard to the evolution of new shopping trends of the masses and, as a result, will require significant amounts of new kinds of promotion strategies for the purpose of communicating the value of products and services in the market. Talking on this note, it can be said that the role of branding strategies will be tremendously high in the process of creating a significant amount of differentiation of the products and services in the markets and within the retail stores. Literature Review In the era of globalization, the world is a single, connected marketplace. This has resulted in the process of development of a tremendous level of competition in markets all over the world, as it has become very easy for new companies to potentially enter and exit new businesses on a regular basis. As a result, it can be said that retail branding has gained a significant amount of importance in the recent times and its value and importance will continue growing in the long run on a steady basis. While defining retail branding, it can be explained that retailer branding is an exercise conducted in order to create differentiation of values in the markets for a particular brand of products and services, as compared to that of the competitors who are handling the same category and group of consumers (Bhatia 278). Talking on the same note, it can be said that the brand equity factor of a retailer is developed when the intended target consumers and desired target audience starts giving preference to the offerings of a particular marketer’s brand as compared to those of other competitive players who are present in the same market and are targeting the same consumers (Keller 2003). It is a very important to state here that high brand equity helps in favourable positioning of the retail brand in the minds of the consumers. While discussing the issues of conducting retail branding exercises in the retail stores itself, considerable amount of focus has to be given to the process of developing the brand of the retail store itself (Floor 11). It is also of significant relevance to state the fact that the development of a brand and gaining recognition for a particular retail store of a particular retail location in the minds of the consumers will help in a great way in boosting up the sales of various brands of retails products and accessories. It is also important to state that having a high footfall, for a particular retail store of a significant location, will also help the store to become a highly strategic point of merchandising as well as a hot point of sales for various retail brands of national as well as private label category. It is of utmost importance to highlight the fact that retail stores need to continue with the process of differentiating themselves in a continuous manner as there is a tremendous level of competition in the retail sector all over the world. Apart from that, it also needs to be mentioned that the emergence of various kinds of new retail formats, like those of the online retail format, augmented reality format as well as the 3D format, because of rise of internet shopping by consumers around the world, has created the need for branding retail stores. It can be said that by participating in retail branding for various retail stores located in various convenient points of location, various retail brands will be able to go for better and easier communication of value for their products and services to a larger group of consumers, who essentially form the audience of the retail brands as well (Thomassen & et.al 2). It is a widely accepted truth that in many cases, consumers indulge in buying items which they want rather than focusing on their needs. However, with the evolution of consumer behaviour of the masses around the world and an increase in the attention towards value for money, the consumers and the target audience are focusing on the buying branded items and accessories which fulfil both their needs and their wants at the same time. Talking about fulfilling the needs and wants of the consumers, it can be said that the retail branding within various retail store formats will act as a great platform for value communication to a greater audience. It will help the retail brands to create the want factor among the consumers. Talking about the in-store promotions and value communication exercises in the case of retailers, it can be said that the strategies and tactics have always evolved with time as well as with the change in consumer behaviour. Talking on this note, it can be said that for the purpose of value communication to consumers in various kinds of retail store formats, the retailers generally resort to usage of various kinds of strategies related to pricing, branding, store design, layout, etc. Analysis Discussing in greater details about the various kinds of in-store promotional strategies that are often used by the retailers for the branding and promotion of their retail stores, it can be said that the categories of promotional strategies can be categorized in various groups. Pricing Strategy A very common kind of promotion that is done is with regard to the manipulation of the pricing strategies. There are various kinds of pricing strategies that are often used to communicate the value of products and services to the consumers as well as to boost product sales. Every Day Low Price Strategy Every day low price (EDLP) strategy is a form of pricing strategy that is often used by retailers for the purpose of offering value to the customers. Representing this concept in a different manner, it can be said that the application of this particular strategy leads to the process of setting up of price points for products which are in the mid-point between the competitor’s regular price points as well as the promotional price points provided by various brands during the time of introduction of new products and services. It can be said that the price point under this strategy will be such that the particular group of products and services will be priced lower than the competitors but higher than the brand’s introductory price points. While weighing this particular pricing strategy’s pros, it can be said that the price of a certain category of products and services are kept steady throughout the year. This helps in the process of driving volumes of the product to the consumers and thereby helps in raising sales for the brands. Also, in many cases, where the brand equity of a particular brand is high, it can be said that the EDLP strategy helps in developing consumer loyalty for the brands as well as the retail stores. However, it is important to note, that this pricing strategy is highly effective when the brands are looking forward to focussing on product penetration rather than revenue generation or profit maximization High / Low Price Strategy The high/ low price strategy is one of the many pricing strategies that are commonly used by the retailers. In this case, the cost of the selected group of products is priced a little higher than the competitor’s EDLP prices, most of the times. On certain occasions, the prices are dropped below the competitor’s EDLP to pick up consumer sales. This kind of pricing strategy can be categorized as a form of discount pricing, which is provided to promote stock clearance sale or annual clearance of particular brands (Sullivan and Adcock 196 - 197). Bundle Pricing Strategy Bundled pricing strategy refers to the process of placing a combination of two or three products together and then charging a total price for the combined product based offering. Talking on this note, it can be said that the bundle pricing strategy is set in such a way, where the price is obviously higher than the introductory based price offering but lower than the price of the products if purchased individually. It is important to state that bundled pricing is offered in items and accessories where the product will provide more value to the customer when it is offered with an array of services. The positive side of this pricing strategy is that the retailers can opt to implement this strategy for the purpose of boosting the sales of non performing products and services. It can be said that by the process of intermixing the products in a combination, the retailer can look forward to the outflow of both low performing and high performing products in an equal manner. The negative point that is largely prominent in this case is that this kind of pricing strategy will work more efficiently for technology based devices. The reason behind this particular point is simple. It is the fact that the consumers need to choose and opt from various ranges of flexible and more value generating data plans that will help in increasing the value delivery for the technological devices. Multiple Unit Pricing Strategy Multiple unit pricing strategy is another pricing strategy that is occasionally implemented by various retailers in various retail store formats. The strategy represents the idea of offering multiple homogeneous products in a single package and offering this package at a low price. This pricing strategy helps retailers to clear stocks that are not moving in acceptable time. It also provides significant amount of value generation to the customers, as they can buy more of the same product at a much lower price (Pride and Ferell 297). Store Management For the purpose of implementing the various kinds of branding strategies, the issues related to store management are also of significant importance. Talking on this note, it can be said that store management helps in the process of identifying significant positioning issues related to brands. While talking in a more descriptive manner, it can be said that store management comprises of issues like the store design, store layout and even store atmosphere which helps in the process of addressing of some prospects of in-store branding. Store Layout and Store Design This particular issue talks about the prospects of designing a particular layout and design for organization of the store space, so that considerable amount of benefits are provided to the customers in a complimentary manner with regard to a particular store’s in-store branding activity. Talking about this, it can be said the store layout helps a great way in the process of creating a healthy image of the brand in the minds of the consumers. It also plays a major role in the process of directing the traffic flow of the consumers to certain areas, where some of the prime brands that needs high sales are placed. It is of huge significance to state that a proper store layout helps in boosting up the sales for various brand related products and accessories. While concentrating on store layout and store design, the retailers focus on positioning products having slow movement at areas where consumer traffic is highest. At the same time, brands which have a high loyalty of consumers are kept at a little low focus area because of the fact that the consumers of those brands will automatically take the extra trouble to acquire those fast moving brands with high brand value. The retailers, while focusing on store layout, always implement various kinds of lighting techniques and colour combinations so that the customers get more attracted to certain sections of the store. All these steps which fall in the purview of the store layout and design contribute and complement to the in-store retailing strategies used by the retailers (Varley 189). Store Atmosphere Store atmosphere is a very important factor, when seen with regard to store management. Store atmosphere plays a great role in influencing the mindset as well as the consumer behaviour of the consumers. It is highly relevant to highlight the fact that the atmosphere issues touch the five factors of visual, tactile, aural, and olfactory as well as taste senses of the customers. It is of considerable importance to highlight the fact that by creating a positive appeal for the customers’ visual senses as well as aural senses, the retailers will be in a better position to implement various kinds of branding strategies for the purpose of increasing the value of their individual retail stores (Okonkwo 85). Integration of Theory and Practice It can be said that for the purpose of providing significant amount of information with regard to integration of theory and practice, real life examples of pricing and store based strategies have to be quoted. That will help in providing a substantiating amount of information with regard to the level of success that has been attained by the retailers by implementing the various strategies and tactics related to value communication within their retail stores. Talking about citing examples in support of multiple kinds of pricing strategies that are followed by the retailers, it can be said that the examples comes from a variety of retailers. Talking about Every Day Low Pricing (EDLP) strategy, it can be said that Wal-Mart which is one of the world’s leading retailers, focuses on implementing EDLP strategy on a regular basis. By doing this, it can be said that one of the world’s largest as well as leading retailer focuses on gaining and developing a significant amount of competitive advantage with regard to the pricing strategy of the competitors. It can be imperatively said that this helps Wal-Mart in gaining a significant amount of advantage with regard to the development of its brand value to the customers. Wal-Mart, by applying this pricing approach over the years, has been highly instrumental in the process of developing a high value for money kind of image in the minds of the consumers of the United States (Townsend and Welch). Apart from Wal-Mart, it can be said that the application of the EDLP pricing strategy has significantly helped various other retailers like Home Depots, Toys Are Us to achieve a significant growth in sales in the United States (Quelch 182). For the purpose of demonstrating an example of High Low kind of a pricing strategy, the strategy implemented by the German based retailer Aldi needs to be mentioned. The retailer from Germany focused on the process of providing acceptable quality products at the lowest possible price. This helped in a better value generation for the consumers of Germany, whose consumer behaviour comprises of making trips to the shopping mall on a regular basis (Cuthbertson 14). It is also of significant importance to state that the German based retailer focuses on competing with regard to the service and the assortment while competing with retailers of other formats and brands. For the purpose of citing a very suitable example with regard to bundle pricing of products, it can be said that this kind of a pricing is highly applicable where the value of a product is increased and extended and if the customer opts for a particular category of a complementary service. A suitable example can be the case of Verizon, which focused on the process of providing customers with a wide array of service, based plans, offered to the customer in a complete package and made available at a bundled price (Pride and et.al 388 - 389). Talking about examples of multi unit pricing strategy, it can be said that this is one of the most common pricing strategies and it is applied by almost all brands for the purpose of clearance of stocks as well as promoting the end of season sale. The most perfect real life examples are Buy one get one free, Buy two at the price of one, etc (Pradhan 246). While discussing the subject of retailers’ benefits with regard to in-store retailing strategies, it can be said that there are a wide range of examples that can be considered for the purpose of highlighting the store design, layout and atmosphere related strategies implemented by various retailers for attracting consumers to their retail stores and outlets. Many well known retailers like Sam’s Club, Target and JC Penny focus on expanding their store area and adding significant amount of space to their store layout so that they can start selling furniture related product offerings. Another very relevant example which can be mentioned is the case of Best Buy. The particular retailer focused on the process of making significant amount of adjustments in the store layout so that they can reach out and provide a greater level of convenience to the women with children. In Germany, Generation Next made significant amount of adjustments with regard to the store layout and store appearance so that it provides maximum amount of convenience to the older customers (Krafft and Mantrala 22). Conclusion It is highly relevant to say that today’s consumers are highly tech savvy in nature. Also the emergence of many new players in the retail sector’s market has led to the foundation of the fact that the level of competition has increased tremendously. Talking with regard to facts, it can be said that the availability of free knowledge over the internet, along with the fast dispersion of the trends of globalization, has significantly helped in reversing the power balance. The trends of modernization, accompanied by the customers’ increasing and evolving demands, as well as the high level of realization of the value for money concept have all led to the significant rise of power of the buyers. This is creating a significant amount of pressure on the retailers of various brands, who are increasingly trying to compete with each other for the purpose of gaining significant amount of market share as well as higher sales for their merchandise. The evolution of a global marketplace, where consumers can shop virtually at any time and from any place, has significantly resulted in the rise of competition for the retailers who are trying to push their merchandise off their shelves, so that the cash cycle for their businesses remain fast and steady. Hence, it is of significant importance to mention that the retailers increasingly need to focus on the process of continuous value generation for the customers, so that they feel motivated and enthusiastic to come down to a retail store and purchase the products and services which satisfy their needs and wants on a regular basis. Reference Keller, K.L. Strategic Brand Management: Building, Measuring, and Managing Brand Equity. Upper Saddle River, NJ: Prentice Hall. 2003. Online. Bhatia, S.C. Retail Management. New Delhi: Atlantic Publishers & Dist. 2008. Online. Krafft, M. and Mantrala, M.K. Retailing in the 21st Century: Current and Future Trends. Germany: Springer. 2010. Online. Pradhan, S. Retailing Management. India: Tata McGraw Hill. 2006. Online. Pride, W.M. and et.al. Business. USA: Cengage Learning. 2009. Online. Cuthbertson, C. Retail Strategy. Great Britain: Routledge. 2012. Online. Quelch, J.A. Readings in Modern Marketing. Hong Kong: Chinese University Press. 2006. Online. 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