5 th Edition PPT 1 1 Consumer Behavior

Chapter 1 Introduction to the World of Retailing Mc. Graw-Hill/Irwin Levy/Weitz: Retailing Management, 5/e PPT 1 -2 Consumer Behavior Ignacio J. Vázquez E. © 2007 Copyright © 2004 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

What is Retailing? • Retailing – a set of business activities that adds value to the products and services sold to consumers for their personal or family use. • A retailer is a business that sells products and/or services to consumers for personal or family use. PPT 1 -3 Consumer Behavior Ignacio J. Vázquez E. © 2007

Examples of Retailers • Retailers: -Sears, Holiday Inn, Mc. Donalds, Amazon. com, Jiffy Lube, AMC Theaters, American Eagle Outfitter, FAO Schwartz, Kroger • Firms that are retailers and wholesalers that sell to other business as well as consumers: -Office Depot, The Home Depot, United Airlines, Bank of America, Sams Clubs PPT 1 -4 Consumer Behavior Ignacio J. Vázquez E. © 2007

How Retailers Add Value • Breaking Bulk -Buy it in quantities customers want • Holding Inventory -Buy it at a convenient place when you want it • Providing Assortment -Buy other products at the same time • Offering Services -See it before you buy, get credit, layaway PPT 1 -5 Consumer Behavior Ignacio J. Vázquez E. © 2007

How Retailers Add Value The value of the product and service increases as the retailer performs functions. Doll can be bought on credit or put on layaway Doll is featured on floor display Doll is offered in convenient locations in Doll is developed in quantities of one several styles Doll is developed at manufacturer PPT 1 -6 Consumer Behavior Ignacio J. Vázquez E. © 2007

Manufacturer’s Perspective The Four P’s of Marketing Retailers are part of the distribution channel

Distribution Channel PPT 1 -8 Consumer Behavior Ignacio J. Vázquez E. © 2007

Retailers are a Business Like Manufacturers Accounting Operations PPT 1 -9 Consumer Behavior Finance

Decision Variables for Retailers Customer Service Store Design and Display Retail Merchandise Assortment Strategy Pricing Location Communication Mix PPT 1 -10 Consumer Behavior Ignacio J. Vázquez E. © 2007

Economic Significance of Retailing • Over $2. 5 trillion in annual U. S. sales -greater than medical care, housing, recreation combine • Employs 17% of population -about the same as manufacturing and growing • Management training opportunities • Entrepreneurial opportunities PPT 1 -11 Consumer Behavior Ignacio J. Vázquez E. © 2007

Nature of Retail Industry is Changing To Today’s Retailer Mom and Pop Store PPT

Retailing is a High Tech Industry - Selling Merchandise over the Internet - Using Internet to manage supply chains - Analyze POS data to tailor assortments to stores - Computer systems for merchandise planning PPT 1 -13 Consumer Behavior Ignacio J. Vázquez E. © 2007

Globalization of Retailing Source Merchandise From Around the World Wal-Mart Operates in U. S. , China, Mexico, UK, Germany Carrefour has Stores in 25 Countries PPT 1 -14 Consumer Behavior Ignacio J. Vázquez E. © 2007

Retail Environment Differs Across the Globe US Japan Concentration High Medium Store Size Big

JC Penney’s Strategic Evolution • Main Street private label soft goods retailer • Changes in environment -- increased disposable income, growth of suburbs, interstate highway program • Emulate Sears in enclosed suburban malls • Focus on soft goods -- drop automotive, sporting goods, hardware • Develop catalog, develop electronic retailing • Future (? ) PPT 1 -16 Consumer Behavior Ignacio J. Vázquez E. © 2007

Sears’ Strategic Evolution • Large number of merchandise categories -appliances, hardware, apparel • Malls evolved into places for buying soft goods, hard goods sold at category killers • The Softer Side of Sears • Refocused on value -- Testing carts in stores • Acquired Lands’ End • Reviewed training program for new managers PPT 1 -17 Consumer Behavior Ignacio J. Vázquez E. © 2007

Whole Foods Implementation Strategy - organic and natural foods supermarket chain Assortment beyond organic/natural foods Private labels - Whole Food™, 360 Day Value™ Love, trust, and employee empowerment Equality in compensation PPT 1 -18 Consumer Behavior Ignacio J. Vázquez E. © 2007

Hot Topic’s Retail Mix Customer Service Store Design And Display Location Merchandise Retail Strategy

Hot Topic’s Retail Mix Location Strategy Enclosed malls Customer Service Store Display And Design Communication Mix PPT 1 -20 Consumer Behavior Merchandise Assortment Pricing Ignacio J. Vázquez E. © 2007

Hot Topic’s Retail Mix Assortment Strategy Customer Service Location Store Design and Display Communication Pricing Mix PPT 1 -21 Consumer Behavior Many Different Hot Band T-shirts and Accessories Ignacio J. Vázquez E. © 2007

Hot Topic’s Retail Mix Pricing Strategy Location Customer Service Merchandise Assortment Store Design and Display Communication Mix PPT 1 -22 Consumer Behavior Modest with Sales Ignacio J. Vázquez E. © 2007

Hot Topic’s Retail Mix Customer Service Communication Mix Store Design And Display Location Merchandise

Hot Topic’s Retail Mix Store Design and Display Customer Service Heavy Metal, Gothic Look Merchandise Assortments Communication Mix PPT 1 -24 Consumer Behavior Location Pricing Ignacio J. Vázquez E. © 2007

Hot Topic’s Retail Mix Customer Service Modest Location Merchandise Assortment Store Design and Display

Macy’s Retail Mix Customer Service Store Design And Display Retail Strategy Communication Mix PPT

Macy’s Retail Mix Location Strategy Enclosed Malls Customer Service Store Display And Design Communication

Macy’s Retail Mix Assortment Strategy Customer Service Location Many Items in Apparel and Soft Home Store Design and Display Communication Mix Pricing PPT 1 -28 Consumer Behavior Ignacio J. Vázquez E. © 2007

Macy’s Retail Mix Location Customer Service Pricing Strategy Merchandise Assortment Store Design and Display Communication Mix PPT 1 -29 Consumer Behavior Moderate with Frequent Sales Ignacio J. Vázquez E. © 2007

Macy’s Retail Mix Customer Service Communication Mix Store Design And Display Location Merchandise Assortment Pricing TV, Newspaper Ads and Special Events PPT 1 -30 Consumer Behavior Ignacio J. Vázquez E. © 2007

Macy’s Retail Mix Store Design and Display Customer Service Ring with Displays Merchandise Assortments

Macy’s Retail Mix Customer Service Modest Location Merchandise Assortment Store Design and Display Pricing

Wal-Mart’s Retail Mix Customer Service Store Design And Display Retail Strategy Communication Mix PPT

Wal-Mart’s Retail Mix Location Strategy Free-standing Stores Customer Service Store Display And Design Communication Mix PPT 1 -34 Consumer Behavior Merchandise Assortment Pricing Ignacio J. Vázquez E. © 2007

Wal-Mart’s Retail Mix Assortment Strategy Customer Service Location Large Number of Categories Store Design and Display Communication Mix Pricing PPT 1 -35 Consumer Behavior Few Items in Each Category Ignacio J. Vázquez E. © 2007

Wal-Mart’s Retail Mix Pricing Strategy Location Customer Service Merchandise Assortment Store Design and Display

Wal-Mart’s Retail Mix Customer Service Communication Mix Store Design and Display Location Merchandise Assortment Pricing TV and Newspaper Insert Ads PPT 1 -37 Consumer Behavior Ignacio J. Vázquez E. © 2007

Wal-Mart’s Retail Mix Store Design and Display Customer Service Basic, Special Displays for Products Merchandise Assortments Communication Mix PPT 1 -38 Consumer Behavior Location Pricing Ignacio J. Vázquez E. © 2007

Wal-Mart’s Retail Mix Customer Service Limited Location Merchandise Assortment Store Design and Display Pricing

Career Opportunities in Retailing Start Your Own Business List of Retail Entrepreneurs on Forbes 400 Richest Americans • Walton Family (Wal-Mart) • Fisher (The Gap) • Wexner (Limited) • Menard (Menard’s) • Marcus, Blank (The Home Depot) • Kellogg (Kohl’s) • Schulze (Best Buy) • Levine (Family Dollar) • Gold (99 Cent Only) PPT 1 -40 Consumer Behavior Ignacio J. Vázquez E. © 2007

Misconceptions About Careers in Retailing • Don’t need college • Low pay • Long hours • Boring • Dead-end job • No benefits • Everyone is part-time • Unstable environment PPT 1 -41 Consumer Behavior Ignacio J. Vázquez E. © 2007

Why You Should Consider Retailing • Entry level management positions -Department manager or assistant buyer/planner -Manage and have P&L responsibility on your first job • Starting pay average with great benefits - Some retailers pay graduate school • No two days are alike • Buying for financially oriented people • Management for people PPT 1 -42 Consumer Behavior Ignacio J. Vázquez E. © 2007

Types of Jobs in Retailing Most entry level jobs are in store management or buying, but… retailers also have staff specialists: --accounting and finance --real estate --human resource management --supply chain management --advertising --public affairs PPT 1 -43 Consumer Behavior Ignacio J. Vázquez E. © 2007

Centro de Comercio Detallsita • www. gda. itesm. mx/ccd • ADMINISTRACIÓN DE MERCANCÍAS / PRECIOS: Aprenderás el manejo de compras, resurtidos e inventarios que realizan las empresas de comercio al detalle. Analizarás la tecnología que está revolucionando el retail y estudiarás la administración y el establecimiento de precios, así como el desarrollo y presentación de líneas de producto, dando especial atención a las relaciones comprador-proveedor. • INTERNSHIP I Y II: Aplicarás tus conocimientos dentro de una empresa detallista. en el verano trabajarás 7 hrs. diarias por 5 semanas en una empresa de comercio al detalle, en donde conocerás las diferentes áreas de la empresa y tendrás la oportunidad de resolver algún problema o realizar un proyecto específico. • ADMINISTRACIÓN DE LA TIENDA Y SERVICIO AL CLIENTE: Analizarás los procesos en el manejo y administración de una tienda. Aprenderás temas relacionados con sistemas de información, recursos humanos, imagen y diseño de la tienda (visual merchandising), servicio al cliente y CRM (Customer Relationship Management), entre otros. • ESTRATEGIA DE COMERCIO DETALLISTA MULTICANAL: Conocerás las estrategias que siguen los principales detallistas y su implicación en las ventas. Comprenderás la metodología para la ubicación de puntos de venta. Aplicarás las estrategias de publicidad y promoción que se utilizan en el comercio detallista. Además, aprenderás la nueva tendencia en el retail de administración por categorías. PPT 1 -44 Consumer Behavior Ignacio J. Vázquez E. © 2007