MKTG

1. MKTG Lamb, Hair, McDaniel 2008-2009 13 CHAPTER Retailing Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University

2. Learning Outcomes Discuss the importance of retailing in the U.S. economy Explain the dimensions by which retailers can be classified Describe the major types of retail operations LO1 LO2 LO3

3. Learning Outcomes Discuss nonstore retailing techniques Define franchising and describe its two basic forms List the major tasks involved in developing a retail marketing strategy Describe new developments in retailing LO4 LO5 LO6 LO7

4. All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use. Retailing Retailing LO1

5. The Role of Retailing • Over 1 million U.S. retailers employ more than 15 million people • Retailers account for 11.6 percent of U.S. employment • Retailing accounts for 13 percent of U.S. businesses • Retailers ring up almost $4 trillion in sales—nearly 40 percent of the U.S. GDP • Industry is dominated by a few giant organizations, such as Wal-Mart LO1

6. Retailing as a %of U.S. employment Retailing as a %of U.S. businesses Retailing as a %of GDP 11.6% 13% 40% REVIEW LEARNING OUTCOME LO1 The Importance of Retailing

7. Classification of Retail Operations Ownership Level of Service Product Assortment Price LO2

8. Independent Retailers Owned by a single person or partnership and not part of a larger retail institution Chain Stores Owned and operated as a group by a single organization Franchises The right to operate a business or sell a product Classification of Ownership LO2

9. Self Service Full Service Factory outlets Warehouse clubs Discount stores Exclusive stores Level of Service LO2

10. Type of Retailer Service Level Assort- ment Price GrossMargin Mod Hi-High Broad Mod-High Mod High Department Store Specialty Store High Narrow Mod-High High Supermarket Low Broad Moderate Low Convenience Store Low Med-Narrow Mod High Mod High Drugstore Low-Mod Medium Moderate Low Full-line Discounter Mod-Low Med-Broad Mod Low Mod Low Specialty Discounter Mod-Low Med-Broad Mod Lo-low Mod Low Warehouse Clubs Low Broad Low-very low Low Off-price Retailer Low Med-Narrow Low Low Restaurant Low-High Narrow Low-High Low-High Types of Stores and Their Characteristics LO2

11. The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted. Price Gross Margin LO2

12. Major Types of Retail Operations Department Stores Specialty Stores Supermarkets Drugstores Convenience Stores Discount Stores http://www.walgreens.com Restaurants Online LO3

13. Categories of Discount Stores Full-LineDiscounters Specialty Discount Stores WarehouseClubs Off-PriceDiscount Retailers LO3

14. Discount Stores MassMerchandising LO3 Retailing strategy using moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products.

15. Discount Stores Supercenter Retail store combining groceries and general merchandise goods with a wide range of services. Full-line discounter Retailer offering consumers very limited service and carrying a broad assortment of well-known, nationally branded “hard goods”. LO3

16. Specialty Discount Stores LO3 CategoryKillers Specialty discount stores that heavily dominate their narrow merchandise segment.

17. Department Stores Specialty Stores Supermarket Drugstores Convenience Stores Discount Stores Restaurants supercenter Full-line extreme- value ScrambledMerchandising Specialty categorykiller Warehouse Off-price factoryoutlet REVIEW LEARNING OUTCOME LO3 Types of Retail Operations

18. Automatic Vending Direct Retailing Direct Marketing Electronic Retailing Nonstore Retailing LO4

19. Door-to-Door Office-to-Office Home Sales Parties http://www.avon.com Online Direct Retailing LO4

20. Direct Mail Catalogs & Mail Order Telemarketing Electronic Retailing Types of Direct Marketing Shop-at-home networks Online retailing LO4

21. Vending Direct retailing direct mail catalogs telemarketing Direct marketing online shop at home Electronic retailing REVIEW LEARNING OUTCOME LO4 Nonstore Retailing Techniques Nonstore Retailing

22. LO5 Basic Forms of Franchising Product and Trade Name Franchising Business FormatFranchising

23. Product and Trade Name Franchising Dealer agrees to sell in products provided by a manufacturer or wholesaler. Business Format Franchising An ongoing business relationship between a franchiser and a franchisee. LO5 Franchising

24. Retail Marketing Strategy Define & Select a Target Market Develop the “Six Ps” LO6

25. Demographics STEP 1: Segment the Market Geographics Psychographics Defining a Target Market LO6

26. STEP 2: Choose the Retailing Mix Product Place Price Personnel Promotion Presentation http://www.publix.com Online Choosing the Retailing Mix LO6

27. Product Personnel Place TargetMarket Presentation Promotion Price The Retailing Mix LO6

28. Product Offering Choosing the Retailing Mix The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix. LO6

29. Advertising Public Relations Publicity Sales Promotion Retail Promotion Strategy LO6

30. Economic growth potential Freestanding Store Competition Shopping Center Mall Geography The Proper Location Choosing a Site Choosing a Community LO6

31. Important Factors for Site Choice • Neighborhood socioeconomics • Traffic flows • Land costs • Zoning regulations • Public transportation • Site’s visibility, parking, entrances and exits,accessibility, and safety • Fit with other stores LO6

32. Design attracts shoppers Activities and anchor stores draw customers Ample parking Unified image Sharing of common area expenses Advantages Disadvantages Shopping Center and Mall Locations • Expensive leases • Failure of common promotion efforts • Lease restrictions • Hours of operation • Anchor store domination • Direct competitors • Consumer time limits LO6

33. Retail Prices Low Price High Price Quality Image Good ValueSingle Price PointEDLP LO6

34. Atmosphere Presentation of the Retail Store The overall impression conveyed by a store’s physical layout, décor, and surroundings LO6

35. Employee type and density Merchandise type and density Fixture type and density http://www.apple.com Sound Online Odors Visual factors Presentation of the Retail Store LO6

36. Two Common SellingTechniques Trading Up Suggestion Selling Personnel and Customer Service LO6

37. Easy-to-use Web site Product availability Simple returns Customer Service for On-Line Retailers LO6

38. REVIEW LEARNING OUTCOME LO6 Developing a Retail Marketing Strategy

39. Interactivity Consumers areinvolved in the retail experience. M-commerce Purchasing goods through mobile devices. New Developments in Retailing LO7