Chapter 11 Retailing Prepared by Deborah Baker Texas

Chapter 11 Objectives 1. Discuss the importance of retailing in the U. S. economy. 2. Explain the dimensions by which retailers can be classified. 3. Describe the major types of retail operations. 4. Discuss nonstore retailing techniques. (continued) Chapter 11 Ver 2 e © 2000 South-Western College Publishing 2

Chapter 11 Objectives 5. Define franchising and describe its two basic forms. 6. List the major tasks involved in developing a retail marketing strategy. 7. Discuss the challenges of expanding retailing operations into global markets. 8. Describe future trends in retailing. Chapter 11 Ver 2 e © 2000 South-Western College Publishing 3

The Role of Retailing u Retailing is one of the largest employers u Over half of retail sales are produced by less than 10% of retail establishments u Industry is dominated by a few giant organizations: u Wal-Mart u Sears u Kmart u JC Penney u Dayton Hudson Corporation Chapter 11 Ver 2 e © 2000 South-Western College Publishing 4

Classification of Retail Operations Ownership Level of Service Product Assortment Classification of Retail Establishments

Major Types of Retail Operations Department Stores Specialty Stores Supermarkets Drugstores Convenience Stores Discount

Types of Stores & Their Characteristics Type of Retailer Service Level Assortment Price Gross Margin Department Store Mod Hi-High Broad Mod-High Mod High Specialty Store High Narrow Mod-High Supermarket Low Broad Moderate Low Convenience Store Low Med-Narrow Mod High Drugstore Low-Mod Medium Low Full-line Discounter Mod-Low Med-Broad Mod Low Specialty Discounter Mod-Low Med-Broad Mod Lo-low Mod Low Warehouse Clubs Low Broad Off-price Retailer Low Med-Narrow Low Restaurant Low-High Med-Narrow Low-High Chapter 11 Ver 2 e Moderate Low-lower © 2000 South-Western College Publishing Mod Low 7

Categories of Discount Stores Full-Line Discounters Categories of Discount Stores Discount Specialty Stores Warehouse Clubs Off-Price Discount Retailers Chapter 11 Ver 2 e © 2000 South-Western College Publishing 8

Nonstore Retailing Automatic Vending Direct Retailing Major Forms of Nonstore Retailing Chapter 11 Ver

Direct Marketing Types of Direct Marketing Direct Mail Catalogs & Mail Order Telemarketing Chapter

Electronic Retailing Types of Electronic Retailing Chapter 11 Ver 2 e Shop-at-Home Networks On-Line

Franchising Benefits of Franchising u An opportunity to become an independent businessperson u Established product or service u Technical training and assistance by franchiser Wendy's and the Wendy's logo are registered trademarks of Wendy's International, Inc. All rights reserved. Copyright © 2000 u Quality control standards by franchiser to ensure product uniformity Chapter 11 Ver 2 e © 2000 South-Western College Publishing 12

Franchising Basic Forms of Franchising Chapter 11 Ver 2 e Product and Trade Name

Retail Marketing Strategy Key Tasks in Strategic Retailing Chapter 11 Ver 2 e Define

Defining & Selecting a Target Market Demographics STEP 1: Segment the Market Geographics Psychographics STEP 2: Choose the Retailing Mix Chapter 11 Ver 2 e Product Place Price Personnel Promotion Presentation © 2000 South-Western College Publishing 15

The Retailing Mix Product Personnel Promotion Target Market Presentation Place Price Chapter 11 Ver

Presentation of the Retail Store Employee Type & Density Merchandise Type & Density Fixture Type & Density Sound Determinants of a Store’s Atmosphere Odors Visual Factors Chapter 11 Ver 2 e © 2000 South-Western College Publishing 17

Personnel and Customer Service Two Common Selling Techniques Trading Up Suggestive Selling Chapter 11

Global Retailing Reasons for Global Expansion Spread of communication and mass media High growth potential in untapped markets Lowering of trade barriers and tariffs Chapter 11 Ver 2 e © 2000 South-Western College Publishing 19

Global Retailing Secure Domestic Position Long-Term Perspective Prerequisites for Going Global Consistent Global and

Global Retailing Market Size & Economics Infrastructure & Distribution Competition Operations Factors Used to Analyze Global Retail Markets Chapter 11 Ver 2 e Financial & Tax Reporting Merchandise Acceptability Partnering Capability © 2000 South-Western College Publishing 21