100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Summary Retail & Omnichannel Marketing (EBM880B05) $3.35
Add to cart
Quickly navigate to
Preview
  2.  
  3. Rijksuniversiteit Groningen (RuG)
  4.  
  5. Retail & Omnichannel Marketing (EBM880B05)

Summary

Summary Retail & Omnichannel Marketing (EBM880B05)
 5 purchases
  • Course
  • Retail & Omnichannel Marketing (EBM880B05)
  • Institution
  • Rijksuniversiteit Groningen (RuG)

Small summary for Retail & Omnichannel Marketing. Small details are omitted. Summary contains the main lines of the lessons and articles. Summary is divided into topics to better establish the link between teaching materials.

Preview 4 out of 65  pages

Document information

  • February 5, 2021
  • 65
  • 2020/2021
  • Summary

Subjects

  • error

Written for

  • Rijksuniversiteit Groningen (RuG)
  • Marketing Analytics & Data Science
  • Retail & Omnichannel Marketing (EBM880B05)
All documents for this subject (6)

Seller

avatar-seller
nikkinuman

Reviews received

Content preview

WEEK 1
Hard discounters
Retail Disruptors (book) by J.B. Steenkamp & L. Sloot  Chapter 1, Chapter 2, Chapter 3. Chapter 6,
Chapter 7

Hard discounter retailers
 Offer basic goods at the lowest possible prices while maintaining high-quality standards
 Reduce costs by
o displaying items on shipping pallets and in boxes in which they arrive
o minimally decorated stores
o offer limited assortment which enables to provide high volumes of basic goods
o streamline operations
 Few options (SKU’s) per category results in easy decision-making
 Hard discounters offer simplicity. Brand simplicity = brands that are easy to understand,
transparent and honest and make consumers feel valued.
 Ensure high quality

Why hard discounters become attractive for middle / high class consumers
 Stagnating incomes
 Impact of recessions: customers switched to HD and did not return after recession
 Smart shopping phenomenon: “smart shopping” to purchase goods at low price

The hard discounter business model
The four key success factors of hard discounters:
1. High volume per SKU
2. Irresistible value for money
3. High profitability
4. Rapid expansion of store network
These key success factors are interrelated and support each other, making it hard to imitate
Hard discounters distinguish themselves compared to regular grocery retailers with: 1.) very limited
assortment, 2.) strong focus on private labels, 3.) small and “spartan-like” stores, 4.) unbeatable price
quality. They are in developing in terms of modern stores, increased choices in fresh products, fresh
baked bread, more organic and fair trade etc.

,Differences between hard discounters
 Hard discounters differ from each other according to the private-label strategy pursued
 Aldi – the inventor of the hard discount concept
o “Getting the best value for money”
o Aldi Nord (= slower to modernize, more appealing store concept) vs. Aldi Sud (=
quicker to innovate, move with times, early in expanding its product range in line with
consumer’s needs)
o Five pillars: 1.) ultra-limited assortment, 2.) unwavering focus on cost avoidance,
3.) unique private-label strategy, 4.) decentralized organization, 5.) company culture
dedicated to simplicity
o ANIKO program (Aldi Nord Instore Konzept) is modern stores with increased choice
in vegetables and fruits etc. to become quality discounter
 Lidl – the only firm Aldi fears
o Lidl copied the large success of Aldi’s discount concept
o Similarities with Aldi: display products in delivery cartons, small stores, basic
ambience, good quality, low prices, private-label assortment, limited-time offers to
drive store traffic
o Likely to become the world’s number one hard discounter: 1.) international
expansion, 2.) organizational structure, 3.) assortment strategy, 4.) marketing
programmes
 Trader Joe’s – the upscale hard discounter
o Owned by Aldi Nord but independently operated
o “Trader Joe’s customer experience”
o Mainly sell private label products under the banner name
o Little marketing expenditures
o Unique positioning and assortment and in-store experience
 DIA – the convenience hard discounter
o Lidl is seen as their main competitor
o Offer more national brands in each category to give consumers more choice
o Stores are located on premium locations
o 2PF business model:
 1.) Proximity: neighbourhood locations offer customers easy access
 2.) Price: DIA’s price image is more favourable than the actual price adv.
 3.) Franchising: franchises provide work for whole family

Implications of hard discounter entry on different types of conventional retailers
Five types of conventional retail formats
1. Premium retailers
 Wide and deep assortment of SKUs
 Additional services
 Shopping experience is central (well-trained staff)
 Price level higher than average
 Experienced a growth in market share after hard discounter entry
2. Mainstream retailers
 Largest share of the grocery market in terms of sales
 Modest to good in terms of assortment, quality, and service
 Decent price-quality
 EDLP approach (low price, few promo) or HiLo strategy (frequently
promotions)
 No difference in market share loss between HiLo and EDLP when discounter
arised
 But the entrance of hard discounter resulted in a 10 % loss in market share
3. Warehouse clubs
 Large stores with large assortment

,  Package sizes are typically large
 Often membership card needed to enter the store
 Visit stores infrequently but average spent is $200 per trip
4. Brand discounters
 Low prices with limited assortment of leading national brands
 Create “blue ocean” by entering uncontested market space
 Shopping experience is utilitarian
5. Proximity retailers
 Convenience stores
 Limited variety of grocery products at relatively high prices
 Less affected by hard discounters

Retail formats can be classified based on perceived price and perceived added value in retail market
space map. The retailing space can be divided into commodity market (e.g. aldi, lidl), mid-market
(e.g. jumbo, AH), specialty market (e.g. Waitrose, wholefoods).




Hard discounters (e.g. brand discounters) impact the shopper’s mindset
1. Change in reference price (e.g. result in lower reference price; reluctance to pay high price)
2. Hard discounter devaluation process means that value-related attributes (e.g. service level,
well-trained employees, large assortment) are less important than price-related attributes
3. Contrast effect means that conventional retailers are perceived more positively on added-
value attributes but the price image of the conventional retailer declines. But, less importance
is attached to added-value attributes as hard discounter enter the area.
The hard discounter devaluation process and contrast effect create double jeopardy for conventional
retailers.

Initial reactions toward hard discounters
1. Neglect no worries
2. Derogation stage discounters embraced, retailer publicly downplay them
3. Panic phase panic starts when large market portion is taken, cut prices
4. Coordinated response develop balanced strategy to highlight strengths to survive

Four strategic reactions to hard discounter encroachment
Defensive Fight-back strategy Downgrading strategy
Most applicable for - Reduce prices (head-to-head - lowering overall price level while
price-focused / competition) by providing a range of cutting costs by reducing assortment,
EDLP mainstream low-price options and lower prices of staff levels & (online) services
retailers and existing assortment - more robust strategy than fight-
warehouse clubs - Dominant approach in panic phase back strategy

, Offensive Value-improvement strategy Value-redefinition strategy
Most applicable for - Offering more value by adding - Aggressive offensive strategy
service-focused extra services, improve goods, more - Retailer tries to lead the field by
HiLo mainstream convenience, or higher quality redefining what is great value
retailers and - Concept improvement and early - Expanding the market space
premium retailers. adopters of innovations outward in terms of price and value.
- Scan market for trends and study - Improve assortment completeness
competing retailers’ initiatives and quality while at the same time
improve customer services




Bell-curve / normally distributed retail market
 “Wish line”: consumers prefer local, organic, high quality, fair trade, convenience etc.
 “Wish to pay”: we want added value but we do not want to pay for this, want low price
 Combining wish line with wish to pay line results in normally distributed market
o Therefore, most retailers are situated in the middle
o Mid market = 50 – 75% of market
o Commodity = 10 – 30 % of market
o Specialty = 5 – 15 % of market
 Mid-markets experience threats from both sides (e.g. commodity and specialty) causing hyper
competition
 Well curve = flipped bell curve showing the growth potential. Mid-market has lowest growth
potential. Hard discounters and technologically advanced stores push back the mid-market.




Average rotation per item per week
 Average rotation hard discounter = 50, compared to 5 for conventional retailer
 €180.000 per store per week / €1,80 average price / 2.000 products = 50
 €240.000 per store per week / €2,40 average price / 20.000 products = 5

The hard discounter business model
Three main drivers of competitive sustainable advantage
1. Efficient retail operation low HQ cost, store efficiency, smart packing
2. Knowledgeable & efficient procurement limited items, large volume, deep knowledge of supply

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller nikkinuman. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $3.35. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

64302 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 15 years now

Start selling

Recently viewed by you

Exam (elaborations) ·

(2)

111E makeup questions with correct answers 2024

Summary ·

(0)

Filosofie [Durf te Denken!] H4 Wetenschapsfilosofie

Exam (elaborations) ·

(0)

Clue Question and answers verified to pass 2024

Exam (elaborations) ·

(0)

USPS SSA Window exam 2022 Questions and Answers

Summary ·

(0)

Systeemfysiologie ('22-'23) - De Nier - Prof. Vennekens

Exam (elaborations) ·

(0)

Comm1 questions and answers already solved 2024

Exam (elaborations) ·

(0)

NRS 509 FINAL QUESTIONS WITH COMPLETE SOLUTIONS

Exam (elaborations) ·

(1)

Tentamen pensioenrecht (vragen en antwoorden) 2019

Exam (elaborations) ·

(0)

MAN 3025 TOP Exam Questions and CORRECT Answers

$3.35  5x  sold
  • (0)
Add to cart
Added