Chapter 13Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1 MKTG Designed by Amy McGuire, B-books, Ltd. Prepared

Chapter 13 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1

MKTG

Designed byAmy McGuire, B-books, Ltd.

Prepared byDeborah Baker, Texas Christian University

Lamb, Hair, McDaniel 2007-2008

Retailing

13

CHAPTER


LO1

Retailing

All the activities directly

related to the sale of goods

and services to the ultimate

consumer for personal,

non-business use.

RetailingRetailing


LO1

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


REVIEW LEARNING OUTCOMELO1

The Importance of Retailing

11.6% 13%

40%

Retailing as a %of U.S. employment

Retailing as a %of U.S. businesses

Retailing as a %of GDP


LO2

Classification of Retail Operations

OwnershipOwnership

Level of ServiceLevel of Service

Product AssortmentProduct Assortment

PricePrice


LO2

Classification of Ownership

IndependentRetailers

IndependentRetailers

Chain StoresChain Stores

FranchisesFranchises

Owned by a single person or partnership and not part of a larger retail institution

Owned by a single person or partnership and not part of a larger retail institution

Owned and operated as a group by a single organizationOwned and operated as a group by a single organization

The right to operate a business or sell a productThe right to operate a business or sell a product


LO2

Level of Service

Full Service Self Service

Discount stores Exclusive storesFactory outlets Warehouse clubs


LO2

Types of Stores and Their Characteristics

Assort-Assort-mentment PricePrice GrossGross

MarginMargin

Broad

Narrow

Broad

Med-Narrow

Medium

Med-Broad

Med-Broad

Broad

Med-Narrow

Narrow

Mod-High

Mod-High

Moderate

Mod High

Moderate

Mod Low

Mod Lo-low

Low-very low

Low

Low-High

Mod High

High

Low

Mod High

Low

Mod Low

Mod Low

Low

Low

Low-High

Type of RetailerType of Retailer

Specialty Store

Supermarket

Convenience Store

Drugstore

Full-line Discounter

Specialty Discounter

Warehouse Clubs

Off-price Retailer

Restaurant

Service Service LevelLevel

Mod Hi-High

High

Low

Low

Low-Mod

Mod-Low

Mod-Low

Low

Low

Low-High

Department Store


LO2

Price

The amount of money

the retailer makes as a

percentage of sales after

the cost of goods sold is

subtracted.

GrossMargin

GrossMargin


Major Types of Retail OperationsLO3

Department StoresDepartment Stores

Specialty StoresSpecialty Stores

SupermarketsSupermarkets

DrugstoresDrugstores

Convenience StoresConvenience Stores

Discount StoresDiscount Stores

RestaurantsRestaurants Online

http://www.walgreens.com


Categories of Discount StoresLO3

Full-LineDiscounters

Specialty Discount Stores

WarehouseClubs

Off-PriceDiscount Retailers


Discount StoresLO3

MassMerchandising

MassMerchandising

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


Discount StoresLO3

SupercenterSupercenter

Retail store combining groceries and general merchandise goods with a wide range of services.

Retail store combining groceries and general merchandise goods with a wide range of services.

Full-line discounterFull-line discounter

Retailer offering consumers very limited service and carrying a broad assortment of well-known, nationally branded “hard goods”.

Retailer offering consumers very limited service and carrying a broad assortment of well-known, nationally branded “hard goods”.


Specialty Discount StoresLO3

CategoryKillers

CategoryKillers

Specialty discount stores that heavily dominate their narrow merchandise segment.



Types of Retail OperationsDepartment

Stores

Department Stores

Specialty Stores

Specialty Stores SupermarketSupermarket DrugstoresDrugstores Convenience

Stores

Convenience Stores

Discount Stores

Discount Stores RestaurantsRestaurants

ScrambledMerchandising

ScrambledMerchandising

Full-line

Specialty

Warehouse

Off-price

supercenter

extreme- value

categorykiller

factoryoutlet


LO4

Nonstore Retailing

Automatic VendingAutomatic Vending

Direct RetailingDirect Retailing

Direct MarketingDirect Marketing

Electronic RetailingElectronic Retailing


LO4

Direct Retailing

Door-to-DoorDoor-to-Door

Office-to-OfficeOffice-to-Office

Home Sales PartiesHome Sales Parties

Online

http://www.avon.com


LO4

Types of Direct Marketing

TelemarketingTelemarketing

Catalogs & Mail OrderCatalogs & Mail Order

Direct MailDirect Mail

Electronic RetailingElectronic Retailing

Shop-at-home networksOn-line retailing



Nonstore Retailing Techniques

Vending

Direct retailing

Direct marketing

Electronic retailing

direct mailcatalogstelemarketing

onlineshop at home

Nonstore RetailingNonstore Retailing


Basic Forms of FranchisingLO5

Business FormatFranchising

Business FormatFranchising

Product and Trade Name Franchising



FranchisingLO5



Dealer agrees to sell in products provided by a manufacturer or wholesaler.

Dealer agrees to sell in products provided by a manufacturer or wholesaler.

BusinessFormat

Franchising

BusinessFormat

Franchising

An ongoing business relationship between a franchiser and a franchisee.

An ongoing business relationship between a franchiser and a franchisee.


Largest U.S. FranchisorsLO5

McDonald’s

Southland

Subway

Burger King

KFC

Pizza Hut

RadioShack

Taco Bell

Dairy Queen

Hooter’s

Jason’s Deli

Marble Slab

Quiznos Sub

SOURCE: http://www.franchise.org, January 2006.


Retail Marketing Strategy

LO6

Develop the “Six Ps”

Define & Select a Target Market


Defining a Target Market

LO6

STEP 1:Segment the Market

STEP 1:Segment the Market

DemographicsDemographics

GeographicsGeographics

PsychographicsPsychographics


Biz Flix

LO6Man’s Favorite Sport


Choosing the Retailing Mix

LO6

STEP 2:Choose the Retailing Mix

STEP 2:Choose the Retailing Mix

ProductProduct

PricePrice

PromotionPromotion

PlacePlace

PersonnelPersonnel

PresentationPresentation

Online

http://www.publix.com


The Retailing Mix

LO6

TargetTargetMarketMarket

ProductProduct

PricePrice

PlacePlace

PromotionPromotion

PersonnelPersonnel

PresentationPresentation


Choosing the Retailing Mix

LO6

ProductOffering

ProductOffering

The mix of products offered to

the consumer by the retailer;

also called the product

assortment or merchandise

mix.


Retail Promotion Strategy

LO6

AdvertisingAdvertising

Public RelationsPublic Relations

PublicityPublicity

Sales PromotionSales Promotion


The Proper Location

LO6

Economic growth potential

Economic growth potential

CompetitionCompetition

GeographyGeography

Choosing a Community Choosing a Site

Freestanding StoreFreestanding Store

Shopping CenterShopping Center

MallMall


Important Factors for Site Choice

LO6

Neighborhood socioeconomics

Traffic flows

Land costs

Zoning regulations

Public transportation

Site’s visibility, parking, entrances and exits,accessibility, and safety

Fit with other stores


Shopping Center and Mall Locations

LO6

Design attracts shoppers

Activities and anchor stores draw customers

Ample parking Unified image Sharing of common

area expenses

Expensive leases

Failure of common promotion efforts

Lease restrictions

Hours of operation

Anchor store domination

Direct competitors

Consumer time limits

Advantages Disadvantages


Retail Prices

LO6

QualityImage

High PriceHigh Price Low Price Low Price

Good ValueSingle Price Point

EDLP


Presentation of the Retail Store

LO6

AtmosphereAtmosphere The overall impression

conveyed by a store’s

physical layout, décor, and

surroundings


Presentation of the Retail Store

LO6

Employee type and densityEmployee type and density

Merchandise type and densityMerchandise type and density

Fixture type and densityFixture type and density

SoundSound

OdorsOdors

Visual factorsVisual factorsOnline

http://www.apple.com


Personnel and Customer Service

LO6

Suggestion SellingSuggestion Selling

Trading UpTrading Up

Two Common Two Common SellingSelling

TechniquesTechniques


Customer Service for On-Line Retailers

LO6

Easy-to-use Web site Easy-to-use Web site

Product availabilityProduct availability

Simple returnsSimple returns



Developing a Retail Marketing Strategy


LO7

New Developments in Retailing

InteractivityInteractivityConsumers areinvolved in the retail experience.

Consumers areinvolved in the retail experience.

M-commerceM-commercePurchasing goods through mobile devices.

Purchasing goods through mobile devices.

Documents

Chapter 13Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1 MKTG Designed by Amy McGuire, B-books, Ltd. Prepared