Retailer Actions

As noted in Chapter 3, in mass marketing, a firm such as a supermarket or a drugstore sells to a broad spectrum of consumers; it does not really focus efforts on any one kind of customer. In concentrated marketing, a retailer tailors its strategy to the needs of one distinct consumer group, such as young working women; it does not attempt to satisfy people outside that segment. With differentiated marketing, a retailer aims at two or more distinct consumer groups, such as men and boys, with a different strategy mix for each; it can do this by operating more than one kind of outlet (such as separate men’s and boys’ clothing stores) or by having distinct departments grouped by market segment in a single store (as a department store might do). In deciding on a target market approach, a retailer considers its goods/service category and goals, competitors’ actions, the size of various segments, the efficiency of each target market alternative for the particular firm, the resources required, and other factors. See Figure 7-9.

After choosing a target-market method, the retailer selects the target market(s) to which it wants to appeal; identifies the characteristics, needs, and attitudes of the target market(s); seeks to understand how its target customers make purchase decisions; and acts appropriately. The process to devise a target market strategy is shown in Figure 7-10. Next, we present several examples of retailers’ target-market activities.

We now present several examples of retailers’ target market activities.

1. Retailers with Mass Marketing Strategies

Walgreens drugstore chain and Kohl’s Department Stores engage in mass marketing. We will discuss both.

Walgreens Boots Alliance is a global company, with over 13,100 drugstores (Walgreens, Duane Reade, Boots, and Alliance Healthcare) in 11 countries. The firm attracts a broad array of customers. Three-quarters of the U.S. population live within 5 miles of a Walgreens or Duane Reade pharmacy. To attract a broad customer base, Walgreens Boots Alliance has convenient store locations, offers a broad array of consumer goods in addition to pharmacy and health care needs, and has online access. The retailer’s Web sites have an average of 68 million visits per month.²⁶

Kohl’s is a popular general merchandise retailer capitalizing on mass marketing. Key com­ponents of Kohl’s mass marketing approach include: the sale of moderately priced private-label merchandise; exclusive and national brand apparel; and footwear and accessories for women, men, and children. Kohl’s has a consistent merchandise mix across all stores (except for some differences due to meeting regional preferences).²⁷

2. Retailers with Concentrated Marketing Strategies

Next, we will discuss Dollar Tree and Claire’s Stores. Both engage in concentrated marketing.

With the acquisition of Family Dollar, Dollar Tree is the leading operator of discount variety stores in the U.S. with 13,000 stores in 48 states and 5 Canadian providences. Its Dollar Tree stores target lower-middle-income customers in suburban locations. These stores sell all items for $1. Dollar Tree has been adding freezers and coolers to drive customer traffic. Its Family Dollar divi­sion sells general merchandise to a lower-income customer in urban and rural locales. Family Dollar stores offer multiple price points, serving customers as their “neighborhood discount store,” with great values on everyday items and a convenient shopping experience.²⁸

Claire’s Stores, Inc. operates close to 3,000 stores under the Claire’s and Icing brand names. The Claire’s stores specialize in fashionable jewelry and accessories (including earrings, necklaces, bracelets, body jewelry, and rings) for young women, teens, tweens, and kids. The Icing stores sell fashion and hair accessories for women (including jewelry, cosmetics, and watches).²⁹

3. Retailers with Differentiated Marketing Strategies

Last, we’ll focus on Foot Locker, Inc. and Gap Inc. Both engage in differentiated marketing.

Besides its mainstream Foot Locker stores, the parent company (Foot Locker, Inc.) also oper­ates chains geared specially toward women and children. Lady Foot Locker offers athletic foot­wear and apparel brands, as well as casual wear and apparel designed for running, walking, toning, and fitness. Kids Foot Locker carries “the largest selection of brand-name athletic footwear, apparel, and accessories for young athletes. Its stores feature an environment geared to appeal to both parents and children.”³⁰

Gap Inc. applies differentiated marketing through its Gap (“clean, classic clothing and acces­sories to help customers express their individual sense of style”—including Gap, Gap Kids, Baby Gap, Gap Maternity, Gap Body, and GapFit collections); Banana Republic (clothing, shoes, hand­bags, and fashion accessories with detailed craftsmanship and luxurious materials); Old Navy (less-expensive fashions and accessories than the Gap, but highly styled); Athleta (women’s active and fitness apparel); and Intermix (styles from emerging and established designers).³¹

Source: Barry Berman, Joel R Evans, Patrali Chatterjee (2017), Retail Management: A Strategic Approach, Pearson; 13th edition.