The Role of Retailing in the Modern Economy

1. 10 MarketingLamb, Hair, McDaniel Designed by Eric Brengle B-books, Ltd. Prepared by Amit Shah Frostburg State University Retailing CHAPTER 15

2. Retailing All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use. The Role of Retailing LOI

3. LOI The Role of Retailing • Over 1.6 million U.S. retailers employ more than 24 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

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

5. 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 LO2 Classification of Ownership

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

7. 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 Product Assortment LO2

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

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

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

11. Supercenter Retail store combining groceries and general merchandise goods with a wide range of services. Extreme-value Retailing Smaller stores emphasizing daily necessities at rock-bottom prices. Discount Stores LO3

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

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

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

15. Direct Mail Catalogs & Mail Order Telemarketing Electronic Retailing Types of Direct Marketing LO4 Shop-at-home networks On-line retailing

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

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

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

19. LO6 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

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