The role of marketing in retail

In order to evaluate the role of marketing in the area of retail, let us first start with some of the commonly quoted definitions of the term 'marketing'. Philip Kotler defines marketing as a societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others.

The American Marketing Association defines marketing as 'the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational goals.

From these definitions one can draw the conclusion that marketing has to do with providing the right product to the consumer at the right place and time, which is largely what retailers believe that they are doing. Therefore, what is the role that marketing can play in a retail organisation? The role of marketing in a retail organisation is two-fold. The first role that marketing can play for a retail organisation is that of informing the consumer that he exists. The second role that marketing plays for the retailer is enabling it to get closer to the end consumer.

As the industry evolves and begins to focus on creating the experience for the end consumer, the elements of the marketing mix become increasingly important. Technology, aids the understanding of consumer needs and preferences and at the same time, serves as the silent salesman. P-O-P signage and in-store media educate and draw attention of consumers to a product's availability and attributes. Coming at a time when most consumers want more information, and when retailers have reduced staffing levels, retail marketing performs a vital service and augments cost-reduction efforts.

Retail Marketing is one of the few mass advertising medium that can convey the same overall strategic message in differing languages to varying audiences in the same village, city or region. Today's P-O-P displays are easily assembled, maintained and, at the same time, more powerful in entertaining and informing in the retail environment.

The retail marketing mix 

The basic function of retail is to provide the right goods to the consumer, at the right place and time. However, in today's competitive world, how does a retailer inform the customers about the products that he has on offer. How does he lure them to visit and shop at his store? How does he achieve the sales targets? The marketing tools that a retail organisation uses to pursue its marketing objectives are termed as the retail marketing mix. Let us now understand the components of the Retail Marketing Mix. The components of the Retail Marketing Mix are illustrated in following diagram.

1. Product

One of the main elements of the retail marketing mix is the product/s and/or the services that the store offers the customer.

• Products are also termed as merchandise. The different products that the store offers is termed as the merchandise mix.

• A merchandise line consists of a group of products that are closely related because they are intended for the same end use, are sold to the same customer group or fall within the same price range. For example, if we consider the menswear section at a department store, the merchandise line would comprise of formal wear, casual wear, accessories, etc.

• The variety of the merchandise mix refers to the number of different lines that stocks in the store. Thus, the merchandise lines in a department store would be menswear, ladies wear, children's wear, home fashion, jewellery, etc. The same in case of a grocery retailer would comprise of cereals, pulses, personal care products, ready to serve foods, packaged foods like biscuits, snacks, etc. in the retailer merchandise brands

• The breadth, also called assortment, refers to the number of merchandise line. If the merchandise line is menswear, an example of breadth of the formal wear shirts would be the number of brands of shirts that the store stocks.

• The depth of the merchandise refers to the average number of Stock Keeping Units within each brand of the merchandise line. Stock Keeping Units, or SKU's as they are commonly referred to, are the individual products that the store carries, defined by brand, size, colour, price, style and pattern. Let us understand this with the help of an example. Let us assume that the merchandise line under consideration is men's formal shirts. The department store under consideration, stocks three different brands of shirts-Arrow, Louis Philippe and Van Heusen. The store then needs to stock them in different sizes, colours, styles and price points. Let us assume that the store stocks them in four sizes, at five different price points, in five colours and in two styles each. Their total would determine the total number of SKU's in that particular merchandise line. 

Thus, e.g., Depth of Product Mix - Shirts 

3 brands - (Arrow, Louis Philippe, Van Heusen) = 3 SKU's 12 SKU's 

X 4 sizes =  12 SKU's

X 5 price points = 60 SKU's 

X 5 colours = 300 SKU's

X2 styles = 600 SKU's 

2. Price

Pricing is an integral part of the retail marketing mix. The price policy that the organisation decides to follow depends on the customer profile that is the target audience for its range of products. It also depends on whether the product offering is unique or has other substitutes available. For example, designer clothing is always expensive as compared to the pret lines offered.

3. Place

For a very long time, the location of the retail store was considered to be the most important element of the retail marketing mix. However, with the advances in technology and the advent of television shopping and the Internet, many retailers are now going in for a click and mortar approach.

4. Promotion

The advertising budget, the sales promotions, publicity and public relations play a very important role in the competitive world of retailing. Retailers need to develop a communication strategy in line with their target market and the products that they stock in store.

5. Presentation

The manner in which the merchandise is presented at the store level is very important. This aspect not only deals with the store layout and ambience created, but also with visual merchandising. Visual Merchandising is the orderly, systematic and intelligent way of putting stock on display in the retail store. Many large retail organisations employ visual merchandisers to aid the store in this

function.

6. Customer Service

The support services that a retailer has have become very important today. The credit policies, product returns policies, etc. need to be clear not only to the sales staff but also to the end customer. Relationship marketing, data warehousing and Customer Relations Management are the new buzzwords in the industry today and all these are aimed at enhancing customer service,

7.  People

Retailers operate in a unique environment, The retail industry is characterised by a large number of inexperienced workers, who need to put in long hours of work. Most of the time, these employees are in direct contact with the customer and may face irate or unreasonable customers. The people who work at the front end of a retail organisation are very important, as they are the face of the organisation for the customers, Their attitude, behaviour, manners and product knowledge play a very important role in building long-term relations with the customers.