Retail Marketing and Distribution - Essay Example

?Retail Marketing and Distribution Table of Contents Introduction 3 Definition of Retail Branding 5 Growth of Retailer Brands 6 Retailers’ Brand Development Strategy 7 Types of Private Level Brand 7 Role of Retail Branding Strategy in Retailing 10 Current Trends in Retail Brand Strategy 12 Pros and Cons of Approaches to Retail Branding Strategy 13 Retail Branding Strategies 15 McDonald’s Corporation 15 7-Eleven Incorporation 16 Aspial Corporation Limited 17 NTUC FairPrice Co-Operative 18 Popular Holdings Limited 20 Conclusion 21 References 23 Introduction Retailing comprises all the activities that are involved in making the goods and the services available directly to the eventual consumers for both personal and non-business use. A retailer or the retail store can be determined as a business entity whose sales volume generally comes from retailing. It can be stated that an organization making its goods and services available to the final consumers be it manufacture, wholesalers or retailer is said to be doing retailing. Retailing has been a prevalent activity over the years but its systematic study has been necessitated in the present times because of the alterations in the components of retailing along with the conditions in the marketplace. Marketing is considered to be one of the most significant areas for any of the retail operations because of the fact that retailing tends to comprise the activities that are generally involved in the marketing as well as distribution of the goods and the services. The success of the retailer depends upon the marketing efficiency along with the capability of the retailer to comprehend and to serve the needs and the demands of the customers. Retailers are not only considered to be one of the most essential parts of the marketing channel but they are also considered to be creating an essential association between the customers and the manufacturers. The economic conditions of the countries as well as the economical structures of the communities are shaped by the retailers. Furthermore, retailing has a direct influence upon the social life. It can be stated that though retailing has its roots in conventional societies by means of trading of goods and services however, it has been formalized and it has become a branded activity in the present times. In the context of demand driven societies, the retailers play a significant role as one of the chains in the channels of distribution. It can be observed that the ways customers tend to dominate the entire marketing as well as supply chain management, similarly the retailers also attain a significant role and they are found to be exerting their power by choosing their brand that they want to sell based upon their marketing demands and their strategies. Retailers are found to occupy a significant position in the distribution channel. The success of the channels of distribution generally depends upon the availability of the right kinds of goods and services, in right amount at the right place at the right time along with the procurement of the product from the right kind of sources. It can be stated that branding can be of great importance in the retail industry in order to impact customer perceptions and hence drive store choices and loyalty. Furthermore, retailer distribution plays a significant role in creating proper brand image among the consumers1. The main objective of the study is to investigate the way retailer branding strategies within retail stores impact the retailer sector. The study shall also aim at comprehending the meaning of retail branding strategies along with the forms of retailer branding strategies and their characteristics. It shall also highlight the role of retail branding in retailing. The study shall further progress with determining the current trends in retailer branding strategies and will discuss regarding the pros and the cons that have been recognized in the literatures regarding the use of the numerous approaches to retail branding. Definition of Retail Branding Brand can be considered to be one of the most significant product essences, which defines its identity in terms of time and space. The concept of retail branding has been developed to such an extent that most of the retailers in the present times are viewed as brands instead of distributors of manufacturer brands. Most of the retailers have created consumer franchisees that help the companies to remain loyal to the retailers than they are to the manufacturer’s brand. It can be stated that such alterations have been because of the widespread creation of own brands. Most of the retailers have attained benefits because of the immense focus upon the needs of the customers along with aspirations through increased level of trusts from the customers2. With the growth in the market along with high competition, it becomes quite imperative for the retailers to pay due attention towards branding. Retail branding not only focuses upon the development of the private label but also several other products that help a company to drive profit. In the context of the multi-brand retailers, this task tends to become quite complex because of the fact that the retailers develop a store identity distinct from the brands sold in the store. Generally, in difficult and mature marketplace, a strong retail brand evolves as one of the key differentiators. A retail brand can be considered as the promise made by the seller to offer the customers with a particular set of characteristics, benefits as well as services to the buyers regularly. Owing to the fact that the position and the views regarding the brand emerge over time, it becomes imperative for the companies to manage brands depending upon constant change. In the context of competitive retail environment, the companies are required to focus upon three main generic strategies such as cost, focus as well as differentiation. It can be mentioned that brand is successful at portraying the total experiences possessed by the customers with the particular products as well as services. Branding facilitates to pull the customers, but the task of retaining those customers lies with the delivery proposition as well as experiences2. Growth of Retailer Brands With the developments in the retailer brands, also identified as own brands, private labels as well as store brands; there has been a noticeable growth in the numerous other products known as multiples essentially in the grocery market. In the present times, most of the multiple retailers have recognized the fact that their profit margin can be enhanced if they are not required to pay for manufacturers’ branding overhead costs. The cost linked with the task of branding implies that branded products are not able to compete on level prices. It can be mentioned that although in the past, own-brand products were generally placed as a cheap alternative to the manufacturers’ brand, retailers have enhanced the quality of their own-branded goods. Numerous shoppers accept the fact that retail brand products generally offer similar qualities in comparison to their rivals. One of the key reasons behind the execution of the strategy is that numerous retailers are competing against other retailers3. Retailers’ Brand Development Strategy A retail brand can be considered as an association of a company’s heritage, the product mix available in the store, the service strategy, the advertising as well as promotion. Most of the retailers aim at creating a unique brand identity. Initially, in order to develop a unique brand identity, it becomes imperative to determine what the retailers actually wish to be in the minds of the customers. It can further be mentioned that successful retail branding generally begins with the precise definition of the target customer group along with their needs and expectations. The retailer is further required to identify the value proposition needs to be offered to the end consumers. Retail branding does not sell any kind of specific products or services. It is generally about the customer service and the ways salespersons’ treat the customers. It is all about how fast the products are delivered to the consumers4. Types of Private Level Brand Irrespective of the ownership holders, it can be stated that the private labels hold different features of being distributed via retailers own locations. There are different forms of private bank such as classic private labels, generic private labels, retailers premium private labels, imitative private labels, producers luxury brands and producers premium brands. It is imperative to discuss the ways in which these retail brands work in order to make better comprehension of the various brands3. Classic private labels demonstrate similar quality to that of the producers. However, they are offered at a favorable price3. Generic private labels which are also identified as quasi brands comprise articles devoid of any brand name. It has been found that these products are sold at comparatively low price which can be even 50% cheaper than for similar producer’s articles. It can be recognized that the generic labels possess comparatively straightforward as well as unattractive packaging designs along with minimum quality levels. It is the simple designs that assist the customers at recognizing the private levels easily. During the 1960s, when these brands were initiated in the markets, they were considered as a response of traditional retailers for the purpose of creating a counter against the low quality as well as high priced brands3. The other form of retail branding is retailer’s premium private labels which are found to be created at high quality conditions and are sold at a higher price. The aim of the retailer during such contexts is to place such brands within the variety of the premium articles that are generally brought about by specific target customer market segment. With the assistance of the retailer’s premium private labels, it has been recognized that the retailers attempt at not only attracting customers, but also binding them in such a way so that customer loyalty can be attained and they can be removed from the producer’s brand. It is difficult for the companies to attain success of such brands if they fail to pay due attention towards the products and the services or if there is improper communication3. Imitative retail brand is considered to be another major private brand which possesses close similarity with the producer’s flagship brand. It needs to be remembered that such me-too or imitative products derive benefits of the image that the original brand enjoys. The imitative products are generally sold at lower prices in comparison to the price that can be afforded by the producer3. Producer’ luxury brands endeavor at making their presence on quite a few number of market segments. However, it has often been noted that with the pace of time, such brands too experience fall in their sales and revenues because of the fact that they are either copied by the retailers or are offered to the consumers at lower price. After that, it becomes significant for the producers to recover the cost of attaining the premium brands. The luxury brand is considered to be the brand possessing high price in comparison to the prices of the products belonging to similar categories and it delivers the goods and the services of high quality to the consumers. Furthermore, the luxury brand is noticeable in terms of its features that make the product quite unique in terms of aesthetically pleasing aspects3. Producers’ premium brands are like producers’ classical or traditional brands where they share the same physical properties. They also share physical belongings as well as benefits that can assist the consumers to properly determine the products and hence discriminate them from that of the retail brands along with the brands of other producers. The other branding strategies entail integrated branding, contract branding and independent branding. In the context of integrated branding strategy, the retailer is linked with the manufacturer and is needed to possess complete knowledge regarding the developments in the products in the near future. It can be mentioned that the retailer is found to be involved in the process that generally begins from idea generation to branding the product3. In the context of contract branding, it is noted that the retailer outsources products from the existing suppliers. Furthermore, the involvement of the retailer is generally restricted to the specifications related to quantity, price and brand3. In the context of independent branding approach, the retailer is found to acquire from the suppliers products at relatively low cost and the branding investment is generally his own. The retailer is considered to be similar to the owner of the brand and is responsible for the overall performance. Such brands are generally referred to as private labels3. Role of Retail Branding Strategy in Retailing The developments in the retail brands have been considered as a topic of academic study. It has been assumed that the concept “retail brand’ in any one particular country is similar to that of the retail brand in another country. It has been recognized that product quality, extrinsic indications related to product quality arising from attractive packaging, labeling as well as brand image along with the overall reputation of the store are considered to be a few of the essential factors. One of the most essential factors in the context of retail brand production can be considered as the change in channel power from the manufacturer to the retailer5. The significance of innovation as a driving force for the growths of the companies needs to be analyzed. By involving in constant innovation, the companies are capable of retaining strong market presence. It can be noted that the manufacturer as well as retailer brands involve in innovation either in the form of incremental change or in the periphery of radical product innovation. Superior brand innovation can be considered as one of the successful strategies while competing with the retailer’s brand. Retailers have been capable of becoming pioneers in terms of innovation and can do many things on their own without dealing with the manufacturers. It can be stated that successful retail branding ensures stable long- term demands. It further offers the companies with better profit margins. The companies are capable of differentiating their products by means of creating long-term association. Successful retail branding ensures proper negotiation with the suppliers from the position of improved strengths. It also helps the companies to protect themselves from the growing competition by focusing upon strategies that can assist them at maintaining competitive advantage5. Retail brands are considered to be distinct from that of product brands where the actual implementation of those branding principles can alter. It can be mentioned that the retail brands are found to be quite multi-sensory in characteristics. They generally depend upon rich consumer experience for influencing their equity. Retailers are also found to develop their brand image in distinct ways such as by connecting unique associations to the quality of their service, their product assortment as well as merchandising. In numerous consumer industries, it has been noted that the image as well as the equity related to the retail brands are related to the manufacturers brand along with the equity of those brands. It has been observed that the retailers make use of the manufacturers brand so that they can create awareness among the consumers along with loyalty within a store. There are various attributes of the retailer brand that have an impact upon the brand image such as quality and variety of products, the physical store appearance, the behavior and service quality of the employees along with the depth and frequency of promotions. As the retail brands respond to the changes in the tastes, desires in consumer behavior, they become well aware of the requirements to create an aesthetic which can assist in attracting the customers. In other words, it can be described that the retail branding strategies have evolved for the purpose of adapting to market competition, developing core brand products and making re-utilization of the core products along with ensuring development of corporate brand image. It also assists in developing the overall image of the strategy in the organization6. Current Trends in Retail Brand Strategy Since the past few years, the retailers have implemented numerous strategies in order to remain competitive in the global market. There are numerous trends that the marketers as well as the brand managers need to be aware of. It has been observed that over the past few decades there has been a rise in the customer expectations on an average by 28%, however the brands in all the categories have been capable of meeting 8% which demonstrates a huge gap between what the brands offer and what is desired from the brands. The increasing awareness of the customers regarding their actual control has led to a particular segment of the consumers preferring customized and personalized products and services. Along with the rise in the expectations of the consumers, it has been noted that there would be a rise in online retailing. However, a rise in the brand equity along with the usage of online retailing shall arise from the desire of the consumer to remain associated with the product. There has been a greater impact of involvement of friends and social networks while making the purchase of the product. In the near future, it is expected that mobile devices would become a device for testing the retail brands on those screens. Hence, it becomes imperative for the brands to prepare themselves so that they can accommodate this trend because the consumers will depend upon screens to involve with brands and hence guide purchase decisions. Non-involved customers can be quite risky for the companies. It becomes quite imperative for the marketers to make use of several methods so that they can involve the customers with the company. They also need to keep an eye on the overall costs associated with the engagement methods. However, greater focus must be to meet the needs and the demands of the customers and involve them with the brand7. Pros and Cons of Approaches to Retail Branding Strategy There are different approaches to retail branding strategy as adopted by the companies. One of them is the economic approach. In the context of economic approach, the marketers are found to combine distinct marketing components that shall permit the companies to trade with the consumers at a cost which would assist them in earning huge profits. However, the approach fails to make sense of the consumers’ reactions which makes it quite ineffective for most of the companies to implement. The identity approach is considered to be another main approach related to retail branding. The notion of branding in the context of identity approach is to develop a unified message across all the tasks in the organizations. Furthermore, in the identity approach, it has been found that a strong brand facilitates to express values and sources of wants. It further lures the stakeholders to the organization and stimulates them to feel a sense of belonging to it. Brand management generally lies at the strategic level in case of identity approach. One of the disadvantages of the identity approach is that it is not able to explain the observed phenomenon8. The consumer-based approach demonstrates the fact that the power of the brands lies within the minds of the consumers. The ownership of the brand prevails with the consumers. In this approach, the brand manager possesses the power to monitor the brand. It can be demonstrated that the consumer-based approach can partially generate the meaning of the reactions from the consumers. The consumer-based approach might anticipate any reaction from the consumers if the co-branding was attained negatively, but the reaction would be in the form of change in consumer’s behavior such as falling brand loyalty as well as falling sales. It fails to offer understandable value to the case8. In the context of personality approach, it is often noted that the brand is instilled with human individuality characteristics that assists in developing emotional bonding between the consumers and the brands. The main drivers of consumption of brands in the context of personality approach are considered to be the consumer’s requirement for identity as well as expression of him/herself. The approach reveals that people are likely to prefer a brand that helps them share their personality traits. One of the disadvantages of the personality approach is that it offers new insights into certain cases but not at the phenomenon of brand associations comprising contradicting brand images. The cultural brand approach focuses upon the association between brand and macro-level culture of the society. It does not deal with the individual customers. It assists in resolving the cultural issues by introducing consistency within the branding. The cultural approach is not capable of comprehending and demonstrating the phenomenon of brands choosing and succeeding with the association in spite of challenging brand images8. The community approach related to brand management initiates the notion of brand value development that is created by the consumers and the brand. The approach does not focus upon the brand but it places greater emphasis upon the society as a whole. Consumer response in the context of community approach is negative because of the fact that it is against the foundation of the community8. Retail Branding Strategies McDonald’s Corporation McDonald’s is one of the well known retail brands currently operating its business across the world. McDonald’s retail brand strategy has dramatically changed in the last few years. It has changed its looks and has been determined to penetrate new market segments. Brand strategy has always been a dynamic concept rather than being a static one. Consequently, it is required that brand strategy is changed according to the changing times and demands. Contextually, McDonald’s, over than years, has also been engaged in changing its looks and is preparing for establishing its brand with a new set-up. In the recent times, McDonald’s brand strategy has been linked with attracting mainly upper and upper-middle class consumers. The retail brand strategy of McDonald’s includes attracting new and existing customers through low priced food products, ensuring family oriented environment where a people can enjoy the tastes of the foods with their families. McDonald’s as a part of its retail brand strategy has also launched its first restaurant in a hospital at KK Women’s and Children Hospital in Singapore. McDonald’s introduced Singapore’s first “second generation public Wi-Fi network” to boost in brand image in Singapore9. Over the years, McDonald’s has indeed taken suitable and competent strategies with subtle changes in their branding decisions in order to stay relevant with each passing generation. Such efforts of McDonald’s have made them extremely easy to recognize not only in Singapore but around the world as well. 7-Eleven Incorporation The increasing consumer desires for convenient shopping and augmenting sales of value added services have developed into strong momentum in the development of retail industry. 7-Eleven’s rapid extension plans continue to take place all over Singapore in order to provide service to the rising population and attain consumer purchasing power. Despite the global uncertainties and local economy weaknesses, it has been steady in its aggressive expansion plans. Unlike other companies 7-Eleven has undertaken expansion strategies as its one of the prime retail brand strategies over the last few years. Moreover; 7-Eleven had opened a record number of i.e. 147 new stores with more favorable rents and better locations as a part of expanding strategies. In addition to this, it has also developed new product lines and has adopted best practices from Taiwan 7-Eleven in order to cope with the negative effects of sluggish economy and unfavorable weather conditions at its same store located at different islands which has aided it to promote its retail brand. Currently, the trend of private-label approaches is being extensively incorporated in convenience stores10. 7-Eleven has also assumed the influence of packaging in order to broaden its own brand and to build customer loyalty. 7-Eleven brand strategy focuses on lowest cost selection and at the same time offering customers’ convenience and value by ensuring product quality that surpasses the national brand. Contextually, 7–Eleven recognizes packaging as an important tool which creates consumer awareness as an effective measure to strengthen its retail brand. Aspial Corporation Limited Aspial Corporation Limited includes other brands like Aspial, Goldhearst Jewelery, Lee Hwa Jewelery and CITIGEMS brands with more than 70 boutiques in Singapore and South-East Asia region. Aspial is a premium brand which includes contemporary jewelry that offers unique designs of jewelry for most discriminating of women consumers. Aspial Corporation intends to strengthen its brand value through authenticity, affordability and accessibility. Its retail brand strategy focuses on empowering women who appreciate the finer thing in life. Furthermore, it intends to build a strong brand by delivering quality lifestyle products and services. In addition to this, the corporation in order to mitigate the problem of slow economic growth along with strengthening its retail brand has emphasized on maintaining operational efficiencies. The corporation has also applied for ‘pawn-broking’ licenses at four more locations11. Moreover, in order to enhance the sale of jewelry, the corporation has also set up Aspial.com solely for boosting its jewelry sales. The corporation with the introduction of e-commerce not only intends to increase its sales but also aims at attaining market support for strengthening its brand image. Its investment in mobile commerce also intends to tap the growing trend of shopping through mobile devices. In addition to this, the corporation has initiated an allowance schemes for those overseas customers who do not have luxury to visit its retail outlets. Moreover, the corporation has been repeatedly involved in launching new and innovative jewelry collections in modern and unique designs to warmly response to customers’ desires for jewelry along with strengthening its retail brand. NTUC FairPrice Co-Operative Over the last thirty years, NTUC FairPrice Co-Operative has been channelized by its social tasks to help moderate Singapore of living by making everyday items affordable to everyone. Such initiatives of FairPrice have immensely helped it in strengthening its retail brand. Contextually, NTUC FairPrice considers its pricing strategy as a major tool for strengthening its retail brand. The products that are offered by it can be admitted to be relatively cheaper than other competitive national brands. Furthermore, FairPrice also adopts discount schemes at regular intervals for building consolidated brand image. Currently, it offers 2% discount to senior shoppers (aged 60 and more) every Tuesday as one of the tools for increasing its sales along with performing social responsibility. Moreover, FairPrice has initiated the foundation of Singapore’s first eco-friendly supermarket with a view towards promoting green environment along with strengthening its retail brand. FairPrice has launched its initial online campaign on Facebook, ‘That’s my FairPrice’ to obtain strong fan base in Singapore and to promote its brand value12. FairPrice has also initiated partnership program with Pergas Halbiz Consultancy to assist in the certification of more Halal corner within its network in order to serve the needs of the Muslim customers. Thus, its retail brand strategies fundamentally focus on effectively serving the needs of all aged groups through effectively performing the role of corporate citizen12. Popular Holdings Limited Popular Holdings Limited has been constantly involved in promoting its retail brand through various modes. Contextually, it has regularly involved in arranging BookFests in Singapore and other countries such as Malaysia and Hong Kong. It also actively participates in exciting events like musical carnivals for strengthening ‘POPULAR’ brand. Popular Holdings makes its considerable efforts towards actively fulfilling its corporate social responsibility and organizes several charity events. It has also been engaged in raising funds for natural disaster victims. It has also set up book cafe, where they offer cozy break of gourmet coffee and food. It has launched Go-Easel at the BookFest@Singapore13. The company also makes direct marketing in order to serve its members needs and wants effectively. It regularly undertakes more synergistic and differentiated offerings to attract more customers and strengthen its retail brand. It also provides effective brand programs for promoting brand loyalty. Furthermore, it also ensures that quality online learning resources are provided to its customers in order to establish itself. Conclusion Retailer brands have a profound impact upon the retailers in the present times. It not only influences the retailers but also lures the customers towards the products and the services. Retail brands focus upon providing the customers with superior quality products that help the companies to maintain customer loyalty. Furthermore, by focusing upon innovation strategies the retail brands are capable of producing high quality products and meeting the changing needs and demands of the consumers. Numerous characteristics of the retail brands possess an influence upon the brand image of the company. The factors are quality as well as variety of the products, the physical store appearance, and the service quality of the employees along with the frequency at which the promotional activities take place. There are various approaches related to retail branding such as cultural approach, economic approach, community approach, personality traits and consumer-based approach among others. Each approach possesses certain limitations as well as advantages. The companies need to focus upon the implementation of these approaches in order to enhance the customers’ experiences with the brands. The retailers based in Singapore such as 7-Eleven, McDonald's, Aspial Corporation, NTUC FairPrice and Popular Holdings implement numerous retail branding strategies for the purpose of creating brand awareness among the consumers as well as to increase the brand loyalty as well. Implementation of an effective retail branding strategy can help the companies at developing proper brand image in the eyes of the consumers. Furthermore, the companies shall be capable of maintaining competitive position in the market by developing strategies that outdo the performance of the competitors. According to the current trends in retail branding strategies, it has been observed that the companies are required to keep themselves updated with the changing technologies so that they can present themselves as being pioneers in innovation. A favorable brand image can be developed if the strategies prepared by the companies work according to the objectives set by them. It can further be stated that most of the retailers have been capable of managing the factors such as centralization of the management activities and use of the retail power in terms of distribution channels among others in creating a retail brand that can offer high sales revenues to the companies. 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