Transcript lecture1 - WordPress.com

RETAIL MARKETING
WHAT WE ARE GOING TO COVER
What Retailing is
 The importance of retailing
 Career opportunities in retail

WHAT IS RETAILING TO YOU?

Retailing – a set of business activities that adds
value to the products and services sold to
consumers for their personal or family use
The Four P’s of Marketing
Product
Distribution
Price
Promotion
HOW DO RETAILERS ADD VALUE?
■
■
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Provide Assortment
Buy other products at the same time
Break Bulk
Buy it in quantities customers want
Hold Inventory
Buy it at a convenient place when you want it
Offer Services
See it before you buy; get credit; layaway
WHAT DO RETAILERS DO FOR CORPORATE
SOCIAL RESPONSIBILITY
McDonalds Houses
 Starbuck fair trade coffee
 Target community Give Back

RETAIL HAS CHANGED! SO HAS THE
CAREER OPPORTUNITIES!
To
Mom and
Pop
Store
Store
Design
Today’
s
Retaile
r
Human
Resources
Loss Prevention
Real
Estate
Operation
s
MIS
Finance
Promotion/Adverti
sing
MISCONCEPTIONS
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■
■
■
■
■
■
■
■
College not needed
Low pay
Long hours
Boring
Dead-end job
No benefits
Everyone is part-time
Unstable environment
No opportunity for women and minorities
THE RETAIL MANAGEMENT DECISION
PROCESS
The World of Retailing (chapters 1-4)
 Environmental Factors
Macro– technology, social, ethical, political
 Micro– competition and customers


Competition –
Intratype competition– between same type retialer
(supermarket vs supermarket)
 Greater Variety of products makes for scrambled
merchandising thus increased Intertype
competition. (examples of scrambled
merchandising??)


Customers – Consumer Behavior
THE RETAIL MANAGEMENT DECISION
PROCESS
Retailing Strategy (chapters 5-11)
 How the firm plans to focus its resources to
accomplish objectives
Targets
 Merchandise
 Long term competitive advantage


Wallmart vs Toys R Us
Small towns -- big towns
Wide Varity shallow selection – every toy made
Low price — low price
Self service – Self service
THE RETAIL MANAGEMENT DECISION
PROCESS
Retailing Strategy (chapters 5-11) Cont.
 Strategic Decision Area



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


Marketing strategy
Financial strategy
Location strategy
Organizational structure
Human Resource
Information systems
Supply Chain Strategies
CRM
IMPLEMENTING THE RETAIL
STRATEGY
CHAPTER 12-19

Retail Mix – combination of factors used to
satisfy customer needs and influence their
purchase decision

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



Types of merchandise and service
Pricing
Advertising and promotion
Store design and merchandise display
Level of customer service
Store location
WAL-MART’S RETAIL MIX
Store Design
And Display
Location
1-12
Customer
Service
Retail Strategy
Communication
Mix
Merchandise
Assortment
Pricing
WAL-MART’S RETAIL MIX
Location Strategy
1-13
Free-standing Stores
Customer
Service
Store Display
And Design
Communication
Mix
Merchandise
Assortment
Pricing
WAL-MART’S RETAIL MIX
Assortment Strategy
1-14
Customer
Service
Location
Large Number
of Categories
Store Design
and Display
Communication
Mix
Pricing
Few Items
in Each Category
WAL-MART’S RETAIL MIX
Location
Merchandise
Assortment
1-15
Customer
Service
Pricing Strategy
Store Design
and Display
Communication
Mix
Low, EDLP
WAL-MART’S RETAIL MIX
Customer
Service
Location
Store Design
and Display
Merchandise
Assortment
Pricing
TV and Newspaper
Insert Ads
1-16
Communication Mix
WAL-MART’S RETAIL MIX
Store Design and Display
1-17
Customer
Service
Basic, Special
Displays
for Products
Location
Merchandise
Assortments
Communication
Mix
Pricing
WAL-MART’S RETAIL MIX
Limited
Location
Merchandise
Assortment
Store Design
and Display
Communication
Mix
Pricing
1-18
Customer Service
CHECKLIST FOR MAKING ETHICAL
DECISIONS
RUBRIC FOR ASSIGNMENTS
Points--Assignment
posted to
Wiki by Due
Date
Points--Assignment
met your
requirement
s
Points--Quality of
Assignment
0
10
15
20
3 days late
with no
communicatio
n on progress
3-5 days late
and the
group kept
you updated
on their
Progress
1-2 days late
with no
communicatio
n as to the
groups
progress
1-2 days late
and the
group kept
you updated
on their
progress
0
20
30
40
50
Met most
requirement
s
Met all
requirement
s
40
50
Did not meet
requirements
0
Did not
complete
Met a few
requirement
s
20
Low quality,
didn’t
adequately
address
topic
Met some
requirements
30
Went into
great detail
but did not
apply all of
the concepts
correctly
Brief but
accurately
applied the
concepts of
the topic
25
On Time
Went into
great detail
and
accurately
applied the
concepts of
the topic
ASSIGNMENT 1

Interview somebody that has a career in the retail
field.

Ask questions in the following areas
What is an average day like for your position?
 What career opportunities in retail do they see
for someone with a degree in business?
 What are the benefits and draw back to working
in retail?
 What does their business do for social
responsibility
 Any ethical situation you have encountered.
Post the interview as a video or podcast to
introduction to retail wiki page. (YouTube,
Blaberize…)


ASSIGNMENT 2

Use Screencasting or Digital Storytelling that
illustrates the role retailers play in the
distribution chain. (Prezi or Photopeach would work
well… others?)

Terms to use:
Backward/Forward Integration or Vertical
Integration
 Breaking Bulk, Holding Inventory, Providing
Assortment and Services
 Supply Chain
 Anything else you see fit…..


Post to Introduction to Retail Wiki page.
ASSIGNMENT 3

Retail mix

Go to two local retailers that are intertype Competitors and
compare their retail mix.
Examples (Walmart and Kmart) (Safeway and
FTC) (Deer Mt. and Terry Peak)
Customer Service
 Store Design and display
 Communication mix
 Location
 Merchandise Assortment
 Price


Use a digital story telling method or multimedia to
illustrate the comparisons to document that is
appropriate. (Blabberize, Comic Life, Prezi….) Post to
wiki!
RETAIL MARKETING

is the range of activities undertaken by a retailer to
promote awareness and sales of the company’s products.
This is different from other types of marketing because of
the components of the retail trade, such as selling finished
goods in small quantities to the consumer or end user,
usually from a fixed location. Retail marketing makes use
of the common principles of the marketing mix, such as
product, price, place and promotion. A study of retail
marketing at university level includes effective
merchandising strategies, shopping and consumer
behavior, branding and advertising. Retail marketing is
especially important to small retailers trying to compete
against large chain
TYPES OF RETAILERS
Over time, different types of
retailers have emerged and
prospered because they have
attracted and maintained a
significant customer base.
FOOD RETAILERS
Supermarkets
 Supercenters
 Warehouse Clubs
 Convenience Stores
 Box(Limited-Line) Store

SUPERMARKETS
A Conventional supermarket is a self-serviced
food store offering groceries, meat, and produce
with limited sales of non food items, such as
health and beauty aids and general merchandise.
 Whereas conventional supermarkets carry about
30,000 SKUs, Limited assortment supermarkets,
also called extreme value food retailers, only
stock 1,250 SKUs.
 Rather than carrying twenty brands of laundry
detergent, limited assortment stores offer one or
two brands and sizes, one of which is a store
brand. Stores are designed to maximize efficiency
and reduce costs.

SUPERCENTERS
The fastest growing retail category, are large stores
that combine a supermarket with a full-line discount
store.
 By offering board assortments of grocery and general
merchandise products under one roof, super centers
provide a one-stop shopping experience.
 Hypermarkets: are also large combination food and
general merchandise stores. Hypermarkets typically
stock fewer SKUs than supercenters - between 40,000
and 60,000 items ranging from groceries, hardware,
and sports equipment to furniture and appliance to
computers and electronics.

WAREHOUSE CLUBS
Warehouse clubs are retailers that offer a limited and
irregular assortment of food and general merchandise with
little service at low prices for ultimate consumers and
small businesses.
 Warehouse clubs are large (at least 100,000-150,000
square feet) and typically located in low-rent districts.
They have simple interiors and concrete floors.
 Warehouse clubs can offer low prices because they use
low-cost locations, inexpensive store designs, and little
customer service and keep inventory holding costs low by
carrying a limited assortment of fast selling items.
 Most warehouse clubs have two types of members:
wholesale members who own small businesses and
individual members who purchase for their own use.

CONVENIENCE STORES
Convenience stores provide a limited variety and
assortment of merchandise at a convenient
location in 2,000- 3,000 square foot stores with
speedy checkout.
 They are the modern version of the neighborhood
mom-and pop grocery/general store. Customers
can shop very quickly.
 Due to their small size and high sales,
convenience stores typically receive deliveries
every day.
 Convenience stores only offer limited
assortments and variety, and they charge higher
prices than supermarkets.

BOX(LIMITED-LINE) STORE
The Box (Limited-Line) Store is a food based
discounter that focuses on a small selection of items,
moderate hours of operation (compared to other
supermarkets), few additional services, and limited
manufacturer brands.
 There stock usually less items, few or no
refrigerated perishables, and few sizes and brands
per item. Items are displayed in cut cases. Customers
do their own bagging.
 Box stores depend on low –priced private-label
brands. They aim to price merchandise 20 to 30
percent below supermarkets.

GENERAL MERCHANDISE RETAILERS
 Department
stores
 Full-line discount stores
 Specialty stores



Drug stores
Category Specialists
Home improvement centers
 Off-price
retailers
 Extreme value retailers
 Factory Outlet Stores
 Hypermarkets
 Variety Store
 Flea Market
DEPARTMENT STORES
Department stores are retailers that carry a broad
variety and deep assortment, offer customer
services, and organize their stores into distinctly
separate departments for displaying merchandise.
 Traditionally, department stores attracted
customers by offering a pleasing ambience,
attentive service, and a wide variety of
merchandise under one roof.
 They sold both soft goods (apparel and bedding)
and hard goods (appliances, furniture, and
consumer electronics).
 But now most department stores focus almost
exclusively on soft goods.

FULL-LINE DISCOUNT STORES
Full-line discount stores are retailers that offer a
broad variety of merchandise, limited service, and
low prices.
 Discount stores offer both private and national label,
but these brands are typically less fashion oriented
than the brands in department stores.
 Target is becoming one of the most successful
retailers in terms of sales growth and profitability.
Target succeeds because its stores offer fashionable
merchandise at low prices in a pleasant shopping
environment.

SPECIALTY STORES
Specialty stores concentrate on a limited number of
complementary merchandise categories and provide
a high level of service in relatively small stores.
 Specialty stores tailor their retail strategy toward a
very specific market segment by offering deep but
narrow assortments and sales associate expertise.
 Because specialty retailers focus on specific market
segments, they are vulnerable to shifts in consumer
tastes and preferences.

DRUGSTORES
Drugstores are specialty stores that concentrate
on health and personal grooming merchandise.
 Drugstores, particularly the national chains, are
experiencing sustained sales growth because the
aging population requires more prescription
drugs.
 Drugstores are also being squeezed by
considerable competition from pharmacies in
discount stores and supermarkets, as well as
from prescription mail-order retailers.
 Drugstore retailers are using systems to allow
pharmacists time to provide personalized service.

CATEGORY SPECIALISTS
Are big box discount stores that offer a narrow but
deep assortment of merchandise.
 These retailers are basically discount specialty
stores.
 Most category specialists use a self-service
approach, but some specialists in consumer
durables offer assistance to customers.

HOME IMPROVEMENT CENTERS
One of the largest and most successful types of
category specialist is the home improvement
center.
 A home improvement center is a category
specialist offering equipment and material used
by do-it-yourselfers and contractors to make
home improvements.

OFF-PRICE RETAILERS
Offer an inconsistent assortment of brand name
merchandise at low prices.
 Off-price retailers sell brand name and even
designer label merchandise at low prices through
their unique buying and merchandising practices.
 Most merchandise is bought opportunistically
from manufacturers or other retailers with excess
inventory at the end of the season.
 Due to this pattern of opportunistic buying,
customers can’t be confident that the same type
of merchandise will be in stock each time they
visit the store.

EXTREME VALUE RETAILERS
Are small, full-line discount stores that offer a
limited merchandise assortment at very low
prices.
 Extreme value retailers are one of the fastest
growing segments in retailing. Like limited
assortment food retailers, extreme value full-line
retailers reduce costs and maintain low prices by
offering a limited assortment and operating in
low-rent, urban, or rural locations.

FACTORY OUTLET STORES
Outlet Stores are off-price retailers owned by
manufacturers or by department or specialty
store chains and are frequently referred to as
factory outlets.
 A factory outlet is a manufacturer–owned store
selling manufacturer closeouts, discontinued
merchandise, irregulars, cancelled orders, and
sometimes, in season, first quality merchandise.
 They closely resemble shopping centers, both in
terms of size, layout, and in carefully controlled
tenant mix, with manufacturers operating
separate units on a single co-coordinated site.

HYPERMARKETS
A hypermarket is a very large retail store
offering low prices.
 It combines a discount store and superstore food
retailer in one warehouse like building.
 Hypermarkets can be up to 300,000 square feet
and stock over 50,000 different items.
 All hypermarkets are based on three concepts of:
one stop shopping, ample free parking and a
discount pricing strategy.

VARIETY STORE
A variety store handles a wide assortment of
inexpensive and popularly priced goods and
services, such as stationary, gift items, women’s
accessories, health and beauty aids, light
hardware, toys, house ware and confectionery
items.
 They do not carry full product lines, may not be
departmentalized and do not deliver products.
 Transactions are often on a cash basis. There are
often displays and few salespeople.

FLEA MARKET
A flea market has many retail vendors offering a
range of products at discount prices in plain
surroundings.
 It is rooted in the centuries old tradition of street
selling -shoppers touch, sample and haggle over the
prices of items.
 Price-conscious consumers who find that other retail
formats have upgraded merchandise and customer
service or raised prices frequent them.
 Many flea markets are located in nontraditional sites
not normally associated with retailing: racetracks,
stadiums and arenas.

NON STORE RETAILERS

Types of retailers that
operate primarily through
non-store channels
ELECTRONIC RETAILERS
 Electronic
Retailing (also called e-tailing, online
retailing, and Internet retailing) is a retail format in
which the retailers communicate with customers and
offer products and service for sale over the Internet.
 Internet continues to provide opportunities for
entrepreneurs in the retail industry, it is now primarily
used by traditional retailers as a tool to complement
their store and catalog offerings, grow their revenues,
and provide more value for their customers.
 Most of the retailers that sell merchandise exclusively
over the Internet target niche markets – markets that
are so small and dispersed that they cannot be
economically serviced by stores.
CATALOG AND DIRECT-MAIL
RETAILERS
Catalog retailing is a non-store retail format in which
the retail offerings are communicated through a
catalog, whereas direct-mail retailers communicate
with their customers using letters and brochures.
 In 2003, $125 billion of merchandise and services were
sold through catalogs, and over 17 billion catalogs
were distributed in the United States.
 The merchandise categories with the greatest catalog
sales are apparel, gifts, books, and home décor.

DIRECT SELLING
Direct selling is a retail format in which
salespeople, frequently independent
businesspeople, contact customers directly in a
convenient location, either at the customer’s
home or at work; demonstrate merchandise
benefits and/or explain a service; take an order;
and deliver the merchandise or perform the
service.
 Direct selling is a highly interactive form of
retailing in which considerable information is
conveyed to customers through face-to face
discussions with salespeople.

TELEVISION HOME SHOPPING
Television home shopping is a retail format in
which customers watch a TV program that
demonstrates merchandise and then place orders
for the merchandise by telephone.
 The three forms of electronic home shopping
retailing are

o Cable channels dedicated to television shopping
 o Infomercials
 o Direct-response advertising

VENDING MACHINE RETAILING
Vending machine retailing is a non-store format
in which merchandise or services are stored in a
machine and dispensed to customers when they
deposit cash or use a credit card.
 Vending machines are placed at convenience,
high-traffic locations, such as in the workplace or
on university campuses, and primarily contain
snacks and drinks.

OWNERSHIP BASED
Independent, Single-Store
Establishments
 Corporate Retail Chains
 Franchising
 Leased Department
 Consumer Co-operatives

INDEPENDENT, SINGLE-STORE
ESTABLISHMENTS
Retailing is one of the few sectors in our economy
in which entrepreneurial activity is extensive.
 Many of these retail start-ups are owner
managed, which means management has direct
contact with customers and can respond quickly
to their needs.
 Small retailers are also very flexible and can
therefore react quickly to market changes and
customer needs.

CONT.
To better compete against corporate chains, some
independent retailers join a wholesale-sponsored
voluntary cooperative group, which is an
organization operated by a wholesaler offering a
merchandising program to small, independent
retailers on a voluntary basis.
 In addition to buying, warehousing, and
distribution, these groups offer members services
such as advice on store design, and layout, site
selection, bookkeeping and inventory management
systems, and employee training programs.

CORPORATE RETAIL CHAINS

A retail chain is a company that operates
multiple retail units under common ownership
and usually has centralized decision making
for defining and implementing its strategy.
FRANCHISING
Franchising is a contractual agreement between
a franchisor and a franchisee that allows the
franchisee to operate a retail outlet using a name
and format developed and supported by the
franchisor.
 In a franchise contract, the franchisee pays a
lump sum plus a royalty on all sales for the right
to operate a store in a specific location. The
franchisee also agrees to operate the outlet in
accordance with procedures prescribed by the
franchisor.

LEASED DEPARTMENT
A Leased Department is a department in a retail
store rented generally by a manufacturer. The
lessee is responsible for all aspects of business
and pays the store a rent.
 The store may impose operating restrictions for
the leased department to ensure the overall
consistency.
 The leased departments choose to operate in
categories that are generally on the fringe of the
store’s major product lines, such as in-store
beauty salons, banks, photographic studios and
food courts.

CONSUMER CO-OPERATIVES
A Consumer Cooperative is a retail firm in which a
group of consumers invest in the enterprise. The
officers are elected.
 Consumer-members share the profits or savings that
accrue. Such retailers are many in number but small
in size and are most popular in food retailing.
 They are started mainly to guard against the
malpractice that many retailers indulge in and
either charge higher prices or offer inconsistent
quality of merchandise.
