Chapter 13 Retailing Introduction An intermediary involved in

Chapter 13 Retailing

Introduction An intermediary involved in Retailer Wholesaler selling goods and services to ultimate consumers (examples? ) An intermediary that takes title to the goods it handles and redistributes them to retailers, other distributors, and sometimes end consumers • Employs 15 million people in the U. S. • Accounts for $4. 5 trillion to the U. S. economy

STRATEGIC IMPLICATIONS: RETAIL MARKETING STRATEGY A retailer develops a marketing strategy based on the firm’s goals and strategic plans Two fundamental steps: Picking a target market: size and profit potential. POSITION. 2. Developing a retailing mix to satisfy the chosen target market 1. 4 Ps + Personnel & Presentation used to create a retail image

The Retailing Mix Product Personnel Place Target Market Presentation Promotion Price

Choosing the Merchandising Mix The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix.

Merchandising (Product) Strategy Category management: Retailing strategy which views each product category as an individual profit center. Slotting Allowances: lump-sum payments by manufacturers for stocking new products. Scrambled Merchandising: Combining dissimilar product lines to boost sales volume. Growth of Store brands – Battle for shelf space

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

Personnel and Customer Service Two Common Selling Techniques Trading Up Suggestion Selling

Price The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted. Price and payment options : how important? http: //www. youtube. com/watch? v=k. Mimyg. VTgb. U

Classification of Retail by Ownership (independent, franchise chain) 2. Service level (Nordstrom vs. Wal-mart) 3. Assortment (CVS vs. Smith’s) 4. Price (Tiffany vs. jewelry kiosk) 1.

Department Stores (1) Service Level High Assortment Broad Price High Gross Margin High

Specialty Stores (2) Specialty Stores Type of Retailer Specialty Store Service Level High Assortment Narrow Price High Gross Margin High

Specialty Discount Stores (3) OR Category Killers Specialty Discount Stores Type of Retailer Service Level Specialty Discount Store Low Assortment Narrow Price Low Deep Assortment Gross Margin Low

Discount Stores (4) Discount Low Service Broad Assortment Shallow Assortment Low price Low margin

Off-Price Retailer (5) Off-price Retailer Low service Narrow Line Low. Prices prices Low margins

Supercenters (6) Supermarket Low service Broad Moderate prices Low margins

Supermarkets �Large, self-service retailer with grocery specialty �Self-scanning trend: what is your take? �Competition: fierce, 1% profit on many items

Warehouse Clubs �Warehouse club / wholesale club (Sam’s, Costco) �No frills, members only (why? ) �Bulk purchases: price competition, homogeneous shopping goods

Convenience Stores �Convenience products �Often with gas stations �Convenience stores: fill-in your “regular” shopping �Competition (fast food also) � 24/7 is more important �We pay for the convenience

Non-Store Retailing �Vending: hi costs; hi prices (flat sales) �Vending is a $40 billion U. S. market �Cashless vending=wave of future �Direct Marketing (Mail, Catalog, Telemarketing) �E-tailing (TV shopping, online) �M-commerce: buy from mobile devices (e. g. , cell phones)

Comparison between Discount, Specialty and Specialty Discount Attribute Discount Service Specialty Discount TCBY Toys R us Yogurt High Low Price High Low Narrow Broad Example Assortment Narrow Wal-Mart Low

Comparison between Discount, Specialty and Specialty Discount Attribute Margin Specialty Discount High Low Discount Low

Wheel of Retailing Newer, low-price types of retailing arise to challenge older established “bigger” retailers.

Wheel of Retailing Motel 3 Motel + Free Breakfast + HBO + Happy Hour 2 New Entrant Motel + Free Breakfast No Frills Motel 1 a theory to explain the institutional changes 4

e. Tailing and DTC �e. Tail= electronic retail �DTC= Direct to consumer �Shrinking use of wholesalers? (bypassing wholesalers more and more) �e. Bay: hybrid etailer/online auction site �Even sells services online (examples of services on ebay? )

e. Tail �More innovative e-tail sites � Printing online www. printresponsibly. com �Nike ID �Zappos http: //nikeid. nike. com http: //www. zappos. com

Future of re[E]tailing http: //www. youtube. com/watch? v=jti. Ja. X 6 q 1 i 0