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marketing 8/5/10 Free Background from www.brainybetty.com marketing 8/5/10 Free Background from www.brainybetty.com Presentation Transcript

  • How important is retailing to the U.S. economy?
    • Retailing is one of the largest employers
    • Retailers ‘ring up’ a third of U.S. GDP
    • Industry is dominated by a few giant organizations, such as Wal-Mart
  • Who are the largest U.S. retailers?
    • Wal-Mart
    • Home Depot
    • Target
    • Sears/K-Mart
    • Kroger
    • Costco
    • Albertson’s
    • Safeway
    • JCPenney
  • Retailer Classification Variables
    • Ownership —independent, chain, or franchise?
    • Level of Service —self-service to full-service
    • Product Assortment —mass merchandisers to specialty stores
    • Price —discounters to full-price stores
  • Gross Margin
    • The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted
  • Department Stores’ Shrinking Share!
    • Discount stores (e.g. Wal-Mart, Target) have upgraded their apparel and merchandise
    • Manufacturers (e.g. Ralph Lauren, Tommy Hilfiger) have opened their own outlets or stores
    • Specialty stores (e.g. Gap, Eddie Bauer) have become more cost and value-oriented
  • How are department stores fighting back?
    • Using the “boutique within the store” format
    • Increasing ‘value-added’ services (e.g. personal shoppers, free alterations)
    • Remodeling and revitalizing
    • Going to smaller store formats
  • Supermarkets are practicing ‘scrambled merchandising’!
    • “ the addition of non-core goods to add convenience for shoppers and to increase store revenues”
    • Examples of Scrambled Merchandising
      • Supermarkets sell gasoline, fresh flowers, greeting cards, school supplies, hardware, and pharmaceuticals
      • Drugstores sell milk, juice, cereals, foods, and gardening supplies
  • Convenience stores are changing!
    • Adding more fresh food and hot food items
    • Partnering with fast food franchises and banks
    • “ Upscaling”—hardwood floors, stainless steel shelving, bistro tables, better lighting, upgraded restrooms
  • ‘ Extreme Value Retailers’ are growing!
    • “full-line discounters with smaller stores, narrower selections, and rock-bottom prices”
    • Examples—Dollar General, Family Dollar, Fred’s
    • Target Market—low-income and fixed- income households
  • ‘ Category killers’ rule certain retail categories!
    • Category killer—single-line, high-volume retailer that dominates a narrow merchandise segment (e.g. pet supplies, toys)
    • Examples—Staples, Best Buy, Toys R Us, PetCo, Home Depot
  • Non-store retailing is booming!
    • Non-store retailing—shopping without visiting a bricks & mortar store
    • Four Major Forms:
      • Automatic Vending
      • Direct Retailing
      • Direct Marketing
      • Electronic Retailing
  • About non-store retailing forms—
    • Automatic Vending—not just snacks and soft drinks anymore!
    • In airports, hotels, restrooms, mass transit stations, theaters
    • Office supplies, toys, DVDs, underwear, toiletries, disposable cameras, hot foods
    • Machines work with debit/credit cards—no coins needed
  • Direct Retailing vs. Direct Marketing
    • Direct Retailing —the selling of products through home parties, office parties, or door-to-door
    • Direct Retailing is not just Avon and Tupperware!—includes food items, cookware, make-up, baby items, lingerie, clothes, home accessories
    • Direct Marketing —the selling of products by direct mail, phone, or catalog
    • Direct mail success depends on: (1) the quality of the mailing list, and (2) the effectiveness of the mailing piece
  • Franchising—moving beyond McDonald’s Business Format Franchising (e.g. Taco Bell, Mail Boxes Etc., Midas) Product and Trade Name Franchising (e.g. Coca-Cola, Goodyear Tires, Honda) Basic Forms of Franchising
  • Franchising fees—One-time fee + royalties
  • The ‘Retail Mix’—keys to retail success
    • Product (Mix—Width and Depth)
    • Place (Location and Hours)
    • Promotion
    • Price
    • Presentation (Layout and Atmosphere)
    • Personnel (Employees and Customer Service)
  • Important Retail Trends
    • “ Shoppertainment ” – stores as ‘destinations’, couches, cafes, video screens, guest appearances
    • Convenience and Efficiency –delivery, in-store services, preselection, refrigerators with bar code scanners
    • Customer Management – data warehousing, databases, mass customization, ‘narrowcasting’