Lamb Hair Mc Daniel 2012 2013 CHAPTER 15
Lamb, Hair, Mc. Daniel 2012 -2013 CHAPTER 15 Chapter 12 Copyright © 2013 by Cengage Learning Inc. All rights reserved 1 © Karin Smeds/Gorilla Creative Images/Getty Images Retailing
Learning Outcomes 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 2 © 2013 by Cengage Learning Inc. All rights reserved
Learning Outcomes 5 Define franchising and describe its two basic forms 6 List the major tasks involved in developing a retail marketing strategy 7 Describe new developments in retailing 3 © 2013 by Cengage Learning Inc. All rights reserved
The Role of Retailing Discuss the importance of retailing in the U. S. economy 1 © 2013 by Cengage Learning Inc. All rights reserved 4
Retailing 5 © 2013 by Cengage Learning Inc. All rights reserved 1
The Role of Retailing u U. S. retailers employ nearly 25 million people u Retailers account for 11. 6 percent of U. S. employment u Retailing accounts for 13 percent of U. S. businesses u Retailers ring up almost $4 trillion in sales —nearly 40 percent of the U. S. GDP u Industry is dominated by a few giant organizations, such as Wal-Mart 6 © 2013 by Cengage Learning Inc. All rights reserved 1
Classification of Retail Operations Explain the dimensions by which retailers can be classified 2 © 2013 by Cengage Learning Inc. All rights reserved 7
Classification of Retail Operations Ownership Level of Service Product Assortment Price 8 © 2013 by Cengage Learning Inc. All rights reserved 2
Exhibit 15. 1 Types of Stores and Their Characteristics Service Level Type of Retailer 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 Moderate 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 Low-very low Low Off-price Retailer Low Med-Narrow Low Restaurant Low-High Narrow Low-High © 2013 by Cengage Learning Inc. All rights reserved
Classification of Ownership 10 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 to sell a product © 2013 by Cengage Learning Inc. All rights reserved 2
Level of Service Full Service 11 Self Service © 2013 by Cengage Learning Inc. All rights reserved 2
Product Assortment Classification based on BREADTH and DEPTH of product lines. 12 © 2013 by Cengage Learning Inc. All rights reserved 2
Price Gross Margin 13 © 2013 by Cengage Learning Inc. All rights reserved 2
Major Types of Retail Operations Describe the major types of retail operations 3 © 2013 by Cengage Learning Inc. All rights reserved 14
Major Types of Retail Operations Department Stores Specialty Stores Supermarkets Drugstores Convenience Stores Discount Stores Restaurants 15 © 2013 by Cengage Learning Inc. All rights reserved 3
Types of Retail Operations 16 Department Store A store housing several departments under one roof. Each department is headed by a buyer, or department head who selects merchandise. Specialty Store A retail store specializing in a given type of merchandise. © 2013 by Cengage Learning Inc. All rights reserved 3
Types of Retail Operations Supermarket A retail store that stocks pharmacy-related products and services as its main draw. Drugstore Convenience Store 17 Large, departmentalized, selfservice retailer. Specializes in food. Some use scrambled merchandising. A miniature supermarket, carrying only a limited line of high-turnover convenience goods. © 2013 by Cengage Learning Inc. All rights reserved 3
Categories of Discount Stores Full-Line Discounters Specialty Discount Stores Warehouse Clubs Off-Price Retailers 18 © 2013 by Cengage Learning Inc. All rights reserved 3
Discount Stores Full-line discount store A retailer that offers consumers very limited service and carries a broad assortment of well-known, nationally branded “hard goods”. 19 © 2013 by Cengage Learning Inc. All rights reserved 3
Discount Stores Mass Merchandising Supercenter 20 A retailing strategy using moderate to low prices on large quantities of merchandise and lower levels of service to stimulate high turnover of products. Retail store that combines groceries and general merchandise goods with a wide range of services. © 2013 by Cengage Learning Inc. All rights reserved 3
Discount Stores A Specialty Discount Store is… a retail store that offers a nearly complete selection of single-line merchandise and uses self-service, discount prices, high volume, and high turnover. A Category Killer is… a specialty discount store that heavily dominate their merchandise segment. 21 © 2013 by Cengage Learning Inc. All rights reserved 3
Discount Stores Warehouse membership clubs Off-price retailer 22 Limited-service merchant wholesalers that sell a limited selection of brand name appliances, household items, and groceries on a cash-andcarry basis to members. A retailer that sells at prices 25 percent or more below traditional department store prices because it pays cash for its store and usually doesn’t ask for return privileges. © 2013 by Cengage Learning Inc. All rights reserved 3
Restaurants • Straddle the line between retail and service establishments • Sell tangible products (food, drink) but also services (food prep, food service) • Many could be considered specialty retailers 23 © 2013 by Cengage Learning Inc. All rights reserved 3
Nonstore Retailing Discuss nonstore retailing techniques 4 © 2013 by Cengage Learning Inc. All rights reserved 24
Nonstore Retailing Automatic Vending Direct Retailing Direct Marketing Electronic Retailing 25 © 2013 by Cengage Learning Inc. All rights reserved 4
Automatic Vending is… the use of machines to offer goods for sale. Vending is the most pervasive retail business in the United States, with 11. 5 MILLION vending machines selling billions or dollars worth of goods annually. 26 © 2013 by Cengage Learning Inc. All rights reserved 4
Direct Retailing Door-to-Door Office-to-Office Home Sales Parties 27 © 2013 by Cengage Learning Inc. All rights reserved 4
Types of Direct Marketing Telemarketing Direct Mail Catalogs and Mail Order Electronic Retailing Shop-at-Home Networks 28 © 2013 by Cengage Learning Inc. All rights reserved 4
Top E-Tailers by Sales Volume America's Top Ten Retail Businesses Rank Company Web Sales Volume (in billions) 29 1 Amazon. com Inc. $34. 2 2 Staples Inc. $10. 2 3 Apple Inc. $5. 2 4 Dell Inc. $4. 8 5 Office Depot Inc. $4. 1 6 Walmart. com $4. 0 7 Sears $3. 1 8 Liberty Media (owns QVC) $3. 0 9 Office Max $2. 8 10 CDW $2. 7
Franchising Define franchising and describe its two basic forms 5 © 2013 by Cengage Learning Inc. All rights reserved 30
The Basic Forms of Franchising 31 Product and Trade Name Franchising Dealer agrees to sell in products provided by a manufacturer or wholesaler. Business Format Franchising An ongoing business relationship between a franchiser and a franchisee. © 2013 by Cengage Learning Inc. All rights reserved 5
Top 10 Franchisors 1. Subway 2. Mc. Donald’s 3. 7 -Eleven Inc. 4. Hampton Inn/Hampton Inn & Suites 5. Supercuts 6. H & R Block 7. Dunkin’ Donuts 8. Jani-King 9. Servpro 10. ampm 32 © 2013 by Cengage Learning Inc. All rights reserved 5
Retail Marketing Strategy List the major tasks involved in developing a retail marketing strategy 6 © 2013 by Cengage Learning Inc. All rights reserved 33
Retail Marketing Strategy Define & Select a Target Market Develop a Retailing Mix 34 © 2013 by Cengage Learning Inc. All rights reserved 6
Defining a Target Market Demographics STEP 1: Segment the Market Geographics Psychographics 35 © 2013 by Cengage Learning Inc. All rights reserved 6
Choosing the Retailing Mix STEP 2: Choose the Retailing Mix 36 Product Place Promotion Price Personnel Presentation © 2013 by Cengage Learning Inc. All rights reserved 6
Exhibit 15. 3 The Retailing Mix 37 © 2013 by Cengage Learning Inc. All rights reserved
Choosing the Retailing Mix Product Offering 38 The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix. © 2013 by Cengage Learning Inc. All rights reserved 6
Retail Promotion Strategy Advertising Public Relations Publicity Sales Promotion 39 © 2013 by Cengage Learning Inc. All rights reserved 6
The Proper Location Choosing a Community Economic growth potential Competition Geography 40 © 2013 by Cengage Learning Inc. All rights reserved 6
The Proper Location Choosing a Specific Site Socioeconomic characteristics Choosing the Type of Site Freestanding Store Traffic flows Land costs Shopping Center Zoning Regulations Mall Public Transportation 41 © 2013 by Cengage Learning Inc. All rights reserved 6
Mall Stores Try to Shrink • Traditional mall retailers like Gap and Ann. Taylor are trying to restructure the size of their mall stores. • Sales per square foot have sunk in recent years. • By shrinking the store size, retailers hope to provide a more intimate shopping experience while maximizing store efficiency. Source: Elizabeth Holmes, "Sizing Up Property, Mall Stores Try to Shrink, " March 19, 2010, B 1. 42 © 2013 by Cengage Learning Inc. All rights reserved
Retail Prices Low Price Good Value Single Price Point 43 © 2013 by Cengage Learning Inc. All rights reserved High Price Quality Image 6
Presentation of the Retail Store Atmosphere The overall impression conveyed by a store’s physical layout, décor, and surroundings 44 © 2013 by Cengage Learning Inc. All rights reserved 6
Presentation of the Retail Store Employee type and density Merchandise type and density Fixture type and density Sound Odors Visual factors 45 © 2013 by Cengage Learning Inc. All rights reserved 6
Personnel and Customer Service Trading Up Two Common Selling Techniques Suggestion Selling 46 © 2013 by Cengage Learning Inc. All rights reserved 6
Customer Service for On-Line Retailers Easy-to-use Web site Product availability Simple returns 47 © 2013 by Cengage Learning Inc. All rights reserved 6
New Developments in Retailing Describe new developments in retailing 7 © 2013 by Cengage Learning Inc. All rights reserved 48
New Developments in Retailing 49 Interactivity Consumers are involved in the retail experience. M-commerce Purchasing goods through mobile devices. © 2013 by Cengage Learning Inc. All rights reserved 7
Chapter 15 Video Sephora - Retailing As you watch the video, notice what other retailing methods Sephora uses to promote sales. http: //www. cengage. com/marketing/book_co ntent/9781133190110_lamb/videos/ch 15. html © 2013 by Cengage Learning Inc. All rights reserved 50
Part 4 Video Distribution Decisions Watch the video on White Rock. What are some of the key distribution decisions the company has to make to maintain their marketing channels? http: //www. cengage. com/marketing/book_cont ent/1439039429_lamb/part_videos/part 04. html © 2013 by Cengage Learning Inc. All rights reserved 51
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