Retailing

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Learning Objectives

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1 DiDi th ith i tt ff t ilit ili i thi th 1.

1. Discuss the importance of retailing in the Discuss the importance of retailing in the U.S. economy.

U.S. economy.

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2. Explain the dimensions by which retailers 2. Explain the dimensions by which retailers can be classified.

can be classified.

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3. Describe the major types of retail 3. Describe the major types of retail operations

operations

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operations.operations.

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Learning Objectives (continued)

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4 Di t t ili t h i

4 Di t t ili t h i

4. Discuss nonstore retailing techniques. 4. Discuss nonstore retailing techniques.

5 Define franchising and describe its two 5 Define franchising and describe its two

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5. Define franchising and describe its two 5. Define franchising and describe its two

basic forms. basic forms.

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6. List the major tasks involved in developing 6. List the major tasks involved in developing

a retail marketing strategy. a retail marketing strategy.

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Learning Objectives (continued)

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7 Di th h ll f di

7 Di th h ll f di

7. Discuss the challenges of expanding 7. Discuss the challenges of expanding

retailing operations into global markets. retailing operations into global markets.

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8.8. Describe future trends in retailing.Describe future trends in retailing.

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Learning Objective

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Discuss the importance

Discuss the importance

of retailing in the U.S. economy.

of retailing in the U.S. economy.

Retailing

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All t he act ivit ies direct ly relat ed t o t he sale of

goods and services t o t he ult im at e consum er for personal, non- business

use.

The Role of Retailing

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‹Retailing is one of the largest employers

‹Retailers ring up almost a third of the U.S. GDP

‹Industry is dominated by a few giant organizations such as

giant organizations, such as Wal-Mart

Learning Objective

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Explain the dimensions by

Explain the dimensions by

which retailers can be classified.

which retailers can be classified.

Classification of Retail Operations

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Ownership

Level of Service

Classification Classification

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Product Assortment

of of Retail Retail

Establishments Establishments

Price

Establishments Establishments

Ownership

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Cl ifi ti Cl ifi ti

2

Classification Classification

of of

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I d d t

Ownership Ownership

Independent

Retailers Franchises

Chain Stores

Level of Service

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2

Full Service Full Service Self Service

Self Service

Discount stores

Discount stores Exclusive storesExclusive stores Factory outlets

Factory outlets Discount storesDiscount stores Exclusive storesExclusive stores Factory outlets

Warehouse clubs Factory outlets Warehouse clubs

Classification Summary

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Type of Retailer

Type of Retailer Service Service L l L l

Assort

Assort--tt PricePrice

Gross Gross M i M i Type of Retailer

Type of Retailer

Department Store Specialty Store Level Level Mod Hi-High High ment

ment PricePrice MarginMargin Broad Narrow Mod-High Mod-High Mod High High Supermarket Convenience Store D t g Low Low

L M d

Broad Med-Narrow M di g Moderate Mod High M d t

g Low Mod High L Drugstore Full-line Discounter Specialty Discounter Low-Mod Mod-Low Mod-Low Medium Med-Broad Med-Broad Moderate Mod Low Mod Lo-low Low Mod Low Mod Low p y Warehouse Clubs Off-price Retailer R t t

Low Low Broad Med-Narrow Low-lower Low Low Low 12 Restaurant Low-High Med-Narrow Low-High Low-High

Gross Margin

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The am ount of m oney t he ret ailer m akes as a

percent age of sales aft er t he cost of goods sold is

Learning Objective

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Describe the major types

Describe the major types

of retail operations.

of retail operations.

Major Types of Retail Operations

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Department Stores

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Specialty Stores

Supermarkets

Drugstores Drugstores

Convenience Stores

Discount Stores

Restaurants Restaurants

Scrambled Merchandisin

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T h e t e n d e n c y t o o ff e r a w id e v a ri e ty o f n o n tr a d it io n a l g o o d s a n d s e rv ic e s u n d e r o n e r o o f. 16

Categories of Discount Stores

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Full Line

3

Full-Line Discounters

Categories Categories of Discount of Discount

Discount Specialty Stores

of Discount of Discount

Stores Stores

Warehouse Clubs

Off-Price

Disco nt Retailers Discount Retailers

Mass Merchandising

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Ret ailing st rat egy using m oderat e t o low prices on

large quant it ies of

m erchandise and lower service t o st im ulat e high

t urnover of product s. t u o e o p oduct s

Hypermarket and Supercenter

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3

Hypermarket

A large retail store combining a supermarket and

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a full-line discount store.

Retail store combining groceries

Supercenter

Retail store combining groceries and general merchandise goods

Learning Objective

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Discuss nonstore retailing techniques.

Discuss nonstore retailing techniques.

Nonstore Retailing

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Automatic Vending

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Automatic Vending

Direct Retailing

Major Forms Major Forms

of of

Direct Marketing

of of

Nonstore Nonstore Retailing

Direct Retailing

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Direct Retailers Direct Retailers

sell products: sell products:

D t D Home Sales

Door-to-Door

Offi t Offi

Home Sales Parties Office-to-Office

Direct Marketing

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Di t M il Direct Mail

Types Types Types Types

Catalogs & Mail Order

Types Types of of Direct Direct Types Types of of Direct Direct Telemarketing Marketing Marketing Marketing Marketing Electronic Retailing

Electronic Retailing

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Shop-at-Home Networks

Types

Types p

Types Types

of of

Electronic Electronic

On-Line Retailing

Retailing Retailing

Learning Objective

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Define franchising and

Define franchising and

describe its two basic forms.

describe its two basic forms.

Basic Forms of Franchising

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Product and Trade Name Franchising

B i F

B i F Franchising

Basic Forms Basic Forms

of of

Franchising Franchising

Business Format Franchising

Franchising Franchising

Basic Forms of Franchising

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Product and Trade Name

Dealer agrees to sell certain

products provided by a manufacturer

Franchising

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or wholesaler.

Business An ongoing business relationship

Business Format Franchising

An ongoing business relationship between a franchiser

Learning Objective

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List the major tasks involved

List the major tasks involved

in developing a retail marketing strategy.

in developing a retail marketing strategy.

in developing a retail marketing strategy.

in developing a retail marketing strategy.

Retail Marketing Strategy

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Define & Select a Target Market

Key Tasks Key Tasks

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Strategic Strategic Retailing Retailing

Develop the “Six P’s”

Retailing Retailing

Defining a Target Market

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Demographics

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STEP 1:

Demographics

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STEP 1:

Segment the Market Geographics Psychographics

Choosing the Retailing Mix

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STEP 2:

Product Place STEP 2:

Choose the Retailing Mix

Price Personnel

The Retailing Mix

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Product

6

Product

Promotion Personnel

Target Target Target Target Market Market

Place Presentation

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Product Offering

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The m ix of product s offered t o t he consum er by t he ret ailer; also called t he product assort m ent p or

Retail Promotion Strategy

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Advertising Advertising

Public Relations

Retail Retail Promotion Promotion

Publicity

Promotion Promotion

Strategy

Strategy Sales Promotion

The Proper Location

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•

Large long t erm com m it m ent of

•

Large, long- t erm com m it m ent of

resources

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Locat ion will affect fut ure growt h

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Local environm ent m ay change over

•

Local environm ent m ay change over

Location

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LocationLocation _{DecisionsDecisions}

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F

rees

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Store

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Mall

Sh

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Center

Shopping Center and Mall

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Locations

Advant ages Advant ages

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Advant ages Advant ages

• Design at t ract s

Disadvant ages Disadvant ages

• Design at t ract s shoppers

• Anchor st ores draw

• Expensive leases

• Failure of com m on

t i ff t

cust om ers

• Am ple parking U ifi d i

prom ot ion effort s

• Lease rest rict ions

• Anchor st ore

• Unified im age • Anchor st ore

dom inat ion

Price

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High Price High Price Low Price

Low Price

Quality Quality Good Value

Good Value Quality

Image Quality

Image Good Value

Good Value

Presentation of the Retail Store

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Employee Type & Density

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Employee Type & Density

Merchandise Type & Density Merchandise Type & Density

Fixture Type & Density

Sound

Od

Factors Factors

in in

Creation

Creation _Odors

Visual Factors

Creation Creation of a Store’s of a Store’s Atmosphere Atmosphere

Personnel and Customer Service

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Trading Upg p

Two Common Two Common

Selling Selling Techniques Techniques

Suggestive Selling

Techniques Techniques

Learning Objective

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Discuss the challenges of

Discuss the challenges of

Discuss the challenges of

Discuss the challenges of

expanding retailing operations

expanding retailing operations

into global markets.

into global markets.

into global markets.

into global markets.

Global Retailing

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Reasons for Reasons for Gl b l E i Gl b l E i

Global Expansion Global Expansion

Spread of communication

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Growth potential in underserved

k t and mass media

Lowering of trade barriers and tariffs

markets

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Global Retailing

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Market Size & Economics

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Market Size & Economics

Infrastructure & Distribution

Competition

Operationsp

Financial & Tax Reporting

Factors Used Factors Used Factors Used Factors Used

to Analyze to Analyze

Merchandise Acceptability

Partnering Capability

to Analyze to Analyze Global Retail Global Retail

Markets Markets

Global Retailing

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Secure

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Secure Domestic

Position

Prerequisites for Prerequisites for

Going Global Going Global

Long-Term Perspective Perspective

Consistent Global and Global and Corporate Strategies

Learning Objective

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Describe future trends in retailing.

Describe future trends in retailing.

Trends in Retailing

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Entertainment

Trends in Trends in Retailing Retailing

Convenience and Efficiency

Customer Management

Customer Management

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Customer Customer Management Management

Strategies Strategies

Customer

Strategies Strategies

Customer Relationship

Marketing

Clienteling

Loyalty Programs

Global Retailing

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Reasons for

Reasons for

Gl b l E

i

Gl b l E

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Global Expansion

Global Expansion

Spread of communication

d di

Growth potential in underserved

k t and mass media

Lowering of trade barriers and tariffs

markets barriers and tariffs

Global Retailing

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Market Size & Economics

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Market Size & Economics

Infrastructure & Distribution Competition

Operationsp

Financial & Tax Reporting

Factors Used

Factors Used

Factors Used

Factors Used

to Analyze

to Analyze

Merchandise Acceptability Partnering Capability

to Analyze

to Analyze

Global Retail

Global Retail

Markets

Markets

Global Retailing

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Secure

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Secure Domestic

Position

Prerequisites for

Prerequisites for

Going Global

Going Global

Long-Term Perspective Perspective

Consistent Global and Global and Corporate Strategies

Learning Objective

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Describe future trends in retailing.

Describe future trends in retailing.

Trends in Retailing

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Entertainment

Trends in

Trends in

Retailing

Retailing

Convenience

and Efficiency

Customer Management

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Customer

Customer

Management

Management

Strategies

Strategies

Customer

Strategies

Strategies

Customer

Relationship

Marketing

Clienteling

Loyalty

Programs