Students enrolled in a Master of Business Administration in Marketing program study various areas within the discipline, such as brand marketing, product marketing and services marketing. The marketing strategies businesses create depend on the products and services they are selling. For example, retailers like Walmart are predominantly product sellers, so they rely heavily on the side of retail marketing.
Retail marketing is the process of identifying a target market’s consumer habits, promoting awareness of new goods or services and generating consumer interest. Successful marketing strategies differentiate a company’s products from its competitors’ by specifying particular benefits, features and add-on services.
How Is it Different?
Differentiating marketing approaches requires a conceptual exercise. Consider how consumers assess the value of a service, like dry cleaning. They base their judgments on the benefits they receive in comparison to what it costs them. If the service is quick and the clothes are clean, customers will likely pay for the service again. Service-based companies must emphasize the consumer experience, since, in most cases, services are difficult to return for a refund.
Retail marketing, on the other hand, allows consumers to see, touch and (in some cases) try products before purchasing them. Consumers can also return products if they are unhappy with them. These differences allow retail marketers to create value propositions, such as “money back guarantees.”
When consumers evaluate products, they rely more heavily on their visual and tactile senses. Since consumers think about products and services differently, marketers must approach their strategies differently.
Identifying Target Markets
Identifying and researching a target market is the first step in building marketing strategies. Marketing any product or service requires identifying the ideal customer’s age, gender, occupation, income, hobbies and any other relevant demographic details. It is essential to understand consumers’ tastes before communicating with them, or businesses risk losing time and money on a marketing strategy that does not address their customer’s needs.
The 4Ps of Marketing
Retail marketing relies on the traditional 4Ps of marketing: product, price, place and promotion. Using the 4Ps, retailers determine what types of products to sell, what the optimal prices are, where and how to sell and how to communicate benefits and features. In some ways, retail marketing is simpler than service marketing, which requires additional attention to the 3Ps: people, processes and physical evidence.
Retail Challenges
Retail competition is fierce. Even when businesses satisfy consumer needs and desires, they must continuously fight to retain their business. To stay competitive, they differentiate their products by adding features, refining customer service and testing various promotions. If retailers stopped making adjustments, competitors could move into their space and lure customers away.
One example of the many challenges that retail marketers face is that competitors often sell exactly the same products. As a result, pricing is a key component of a retailer’s strategy. Retailers use a mix of high, low and competitive pricing to test what works. They routinely use “psychological pricing” — for example, $1.95, which means an item is less than $2.00, even if it is quite close.
Another challenge retailers have identified is that they know very little about their customers. In a 2015 survey, retailers said only 27 percent of managers had access to customer data. For those who did have access, most were unable to analyze it in time to make use of it.
Retail marketing is a specific discipline presenting unique challenges. What sets it apart is that marketers’ goods are tangible, as opposed to intangible services. Retail marketers earn market share by differentiating their products from their competitors’ through pricing strategies, the description of features and benefits, and customer service. Retailers must understand their customers’ spending habits, while also overcoming the challenges of collecting and analyzing customer data.
Learn about the UT Tyler online MBA with a concentration in Marketing program.
Sources:
The Cult Branding Company: What Is Retail Marketing?
Marketing Charts: Retail Marketers Identify Their Top Business Challenges