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In a study entitled “Retail Merchandising and Marketing,” which was conducted by The Parker Avery Group, (a retail consulting company), the researchers aimed to determine the best merchandising strategy for a private-label product. A focus of the study is to have promotions or if they are a waste of money. The research also concentrated on the need for there to be a best practices in the promotion and pricing investment strategy. Both these focuses relate closely to what USL is trying to achieve with McDowell’s No. 1 Platinum Whisky, as they can provide guidance for the marketing plan.
The researchers state that there is a growing gap between the strong retail performers and the ones that aren’t strong. There is changing rules in the ways that retailers should invest in their companies. There needs to be a change in the way strategies are developed, and this mostly involves pricing, assortment and interaction with the customers.
The literature was very thorough. It explained the benefits of each component of promotions, and noted that there is a huge benefit in connecting with the customers through personal interaction with the product. The way that the information was broken up was effective at communicating the ideas clearly. Furthermore, the study reflected contemporary ways of marketing, and in which ways companies can relate to each demographic. With promotions of the private label whisky the main priority of the new marketing plan at USL, this literature provides a valuable component from which to develop a strategy.
The researchers were able to survey customers to capture the important information on buying behavior. The researchers also collected data by surveying the retailers and finding out what their merchandise strategy, and seeing if they even have one.
The researchers found that there is about 57 per cent of retailers who have a specific merchandising strategy. There are also 37 per cent that have a process which is not specific and 6 per cent that don’t have a process. Those that have a merchandising process have at least a 3 per cent comparable store sales growth when looked at on a year-over-year timeframe.
The researchers concluded that there is the appearance in the industry that over-invests on promotions. That is not sustainable because it doesn’t set the groundwork for thriving in the long term. For this reason, retailers should be careful that they don’t invest too much of their money into promotions. If retailers invest in promotions, they should ensure they are making their investment while having a pricing and localization strategy framework.
This research implies that while there is a lot of money dedicated by companies to advertising, this isn’t always effective and could actually cost companies more than it is worth. The research implies that companies should take a close look before dedicating any of their funds to promotion.
I thought the study did a good job at showing many companies that have dedicated a significant amount of their budgets to promotions, but haven’t been successful. However, there should have been more information about companies that have been successful after dedicating much of their funds to promotions.
It would be useful if there was more comparisons of companies in various sectors. I haven’t seen information about the differences in marketing strategies in an apparel company and a food retailer, for example.
References
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