Bus425 Chapter2
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Bus425 Chapter2 Bus425 Chapter2 Presentation Transcript

  • Types of Retailers
  • What is the opportunity?
  • Environmental Factors: “Story of Stuff” (on blog) Macro- Environment Competitors Customers Micro- Environment Technology Social Issues Ethical/Legal Issues Political Issues Environmental Issues RETAILER
  • Describing Different Types of Retailers (Retail Mix) Customer Service Store Design & Display Location Communications Mix Merchandise Assortments Pricing Retail Strategy
  • General Trends in Retailing
    • New Types of Retailers
    • Increased Concentration
    • Globalization
    • Growth In Services Retailer
    • Demise of Pure Electronic Retailers (Webvan, eToys, etc)
    • Growth in Use of Multi-Channel Retailing by Traditional Retailers
    • Increase Use of Technology to Reduce Cost, Increase Value Delivered
    • New Types of Retailers
  • Describing Different Types of Retailers (Retail Mix) Customer Service Store Design & Display Location Communications Mix Merchandise Assortments Pricing Retail Strategy Type of Merchandise Variety and Assortment
  • A Critical Decision Variety Assortment Services Pricing
  • “ Blockbuster was not concerned about Netflix because its research showed more than 90% of video renters decide on the videos they want to watch the same day they rent them.”
  • Environmental Factors Macro- Environment Competitors Customers Micro- Environment Technology Social Issues Ethical/Legal Issues Political & Economic Issues Environmental Issues RETAILER
  • Oops...
  • Now this?
  • Apple Looking Less Shiny? Look Again. Text "When Steve came to us with this idea, it was a no-brainer," says Jim Gianopolus, CEO of News Corp.'s (NWS) 20th Century Fox. While he admits there are many other ways to get movies, he thinks Apple can cut through the clutter. "I think this will be a transformative version of the rental model," Gianopolus says. Holders of Blockbuster (BBI) shares appear to concur. The company's shares plunged 17% amid concern Apple will eat into its film-rental business. January 16, 2008
  • Apple’s Strategy: Adding “Transformative” Service Variety Assortment Services Pricing
  • Characteristics of Food Retailers
  • Group Activity Variety Assortment Services Pricing
    • What online services do each of these retailers offer?
    • What value do they add?
    • What do they imply about the other elements of the marketing mix for this retailer?
    • As a class - how do services offered vary within each main group (Food & Gen. Merchandise? Do any seem to be “standard”?
    Group Activity Online Services
    • FOOD RETAILERS
      • Safeway (Supermarket): http://shop.safeway.com /
      • Target (Super Center): http://www.target.com /
      • Costco (Warehouse Club): http://www.costco.com /
    • GENERAL MERCHANDISE RETAILERS
      • Sears (Dept. Store): http://www.sears.com
      • Abercrombie & Fitch (Specialty Store): http://www.abercrombie.com /
      • Home Depot (Category Specialist): http://www.homedepot.com/
    Group Activity Online Services
    • Food Retailers
    • Primary Shopping Format for Food Sales Growth Rates by Retail Format
    • Fresh perishables
    • Health-conscious & ethnic
    • In-store experience
    • Private brand labels
    How supermarkets are competing
    • Department Stores
    • Specialty Stores
    • Category Specialists
    • Home Improvement Centers
    • Discount Stores
    • Drugstores
    • Off-Price retailers
    • Extreme Value Retailers
    Types of General Merchandise Retailers
  • Department stores in an eroding market
    • Attempting to increase the amount of exclusive merchandise they sell
    • Undertaking marketing campaigns to develop strong images for their stores and brands
    • Building better relationships with their key customers
    Royalty-Free/CORBIS
  • Why Sears Must Engineer Its Own Makeover Text “ With a potential recession on the horizon, retail experts say it is now clear Chairman Edward S. Lampert must engineer a radical makeover of the 121-year-old retailer to prove it can thrive alongside bigger rivals. To halt the sales and profit declines, the company's Sears and Kmart stores must forge new roles for themselves that will distinguish them in customers' eyes from competitors such as Kohl's Corp., J.C. Penney Co., Target Corp. and Wal-Mart Stores Inc. January 16, 2008
  • Issues in Discount Store Retailing
    • Only Big Three Left
    • Wal-Mart, Kmart, Target
    • Wal-Mart’s Dominance
    • Differentiate Strategy
    • Wal-Mart = Low Price and Good value
    • Target = More Fashionable Apparel
    • Competition from Category Specialists
    • Toys-R-Us, Circuit City, Sports Authority
    McGraw-Hill Companies, Inc./Gary He, photographer
    • Decline in Mall Shopping and Apparel Sales
    • -Lack of New Fashions
    • -Less Interest in Fashion
    • -Increase Price Consciousness
    • Lifestyle Formats – Abercrombie and Fitch and Hot Topics
    Issues in Specialty Store Retailing McGraw-Hill Companies, Inc./Gary He, photographer
    • Consolidation – Walgreens, CVS, Rite-Aid
    • Competition from Supermarkets, discount Stores and mail-in orders
    • Evolution to a New Format
    • Stand Alone Sites with Drive Thru Windows
    • Offering more frequent purchase food items
    • Improved systems provide personalized service in the pharmacy
    Issues in Drug Store Retailing
    • Deep and Narrow Assortments Destination Stores
    • Low Price and Service
    • Wholesaling to Business Customers and Retailing to Consumers
    • Incredible Growth
    Category Specialists Ryan McVay/Getty Images
  • Services vs. Merchandise Retailers Intangibility -Problems in Evaluating Service Quality -Performance of Service Provider Simultaneous Production and Delivery -Importance of Service Provider Perishability -No Inventory, Must Fill Capacity Inconsistency of the Offering -Importance of HR Management
  • Article Summary Assignment #1: Write a two-page paper that addresses these issues
    • Find an article in a business publication about a retailer changing their retail strategy
    • What strategic elements are they changing? Customer Service? Pricing?
    • What factors within their macro-environment are the catalyst for this change?
    • What changes have occurred in their micro-environment ?
    • What effect do they hope this will have on their customers behavior and/or perceptions
    • Do you think this will work? Why or why not? What are the risks?
    Customer Service Retail Strategy Store Design & Display Location Communications Mix Merchandise Assortments Pricing Macro- Environment Competitors Customers Micro- Environment Technology Social Issues Ethical/Legal Issues Political & Economic Issues Environmental Issues RETAILER