Bus425 Chapter3


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Bus425 Chapter3

  1. 1. Blackboard site is live https://www.blackboard.uidaho.edu/webct/logon/72822098001 or https://www.blackboard.uidaho.edu/
  2. 2. What is the opportunity?
  3. 3. Social Responsibility
  4. 4. Social Responsibility
  5. 5. Environmental Factors Macro- Environment Competitors Customers Micro- Environment Technology Social Issues Ethical/Legal Issues Political Issues Environmental Issues RETAILER
  6. 6. “ By bringing sustainability into the conversation from the outset, the Accord is intended to spark thinking about new behaviors and new business models.” A New Model for Green Design January 18, 2008 “ While this more eco-driven approach is significant, it's the second part of the accord that promises to have the biggest impact—on the studios, their clients, and ultimately consumers. Signers of the accord promise to break the traditional secrecy of the industry by sharing what they've learned about sustainable design.” “ ...if successful, the Designers Accord will catalyze the sustainable design movement in the U.S., which, while clearly gaining momentum, still lags behind that of Europe, where stricter government regulations have required companies to focus on environmental issues for some time.” http://www.designersaccord.org /
  7. 7. The Distribution Channel Consumer Retailer Wholesaler Manufacturer
  8. 8. Types of Retailers (continued)
  9. 9. Critical Decisions Variety Assortment Services Pricing
  10. 10. Describing Different Types of Retailers (Retail Mix) Customer Service Store Design & Display Location Communications Mix Merchandise Assortments Pricing Retail Strategy
  11. 11. <ul><li>Food Retailers </li></ul><ul><li>Primary Shopping Format for Food Sales Growth Rates by Retail Format </li></ul>
  12. 12. <ul><li>Fresh perishables </li></ul><ul><li>Health-conscious & ethnic </li></ul><ul><li>In-store experience </li></ul><ul><li>Private brand labels </li></ul>How supermarkets are competing
  13. 13. <ul><li>Department Stores </li></ul><ul><li>Specialty Stores </li></ul><ul><li>Category Specialists </li></ul><ul><ul><li>Home Improvement Centers </li></ul></ul><ul><li>Discount Stores </li></ul><ul><li>Drugstores </li></ul><ul><li>Off-Price retailers </li></ul><ul><li>Extreme Value Retailers </li></ul>Types of General Merchandise Retailers
  14. 14. Department stores in an eroding market <ul><li>Attempting to increase the amount of exclusive merchandise they sell </li></ul><ul><li>Undertaking marketing campaigns to develop strong images for their stores and brands </li></ul><ul><li>Building better relationships with their key customers </li></ul>Royalty-Free/CORBIS
  15. 15. 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
  16. 16. Issues in Discount Store Retailing <ul><li>Only Big Three Left </li></ul><ul><li>Wal-Mart, Kmart, Target </li></ul><ul><li>Wal-Mart’s Dominance </li></ul><ul><li>Differentiate Strategy </li></ul><ul><li>Wal-Mart = Low Price and Good value </li></ul><ul><li>Target = More Fashionable Apparel </li></ul><ul><li>Competition from Category Specialists </li></ul><ul><li>Toys-R-Us, Circuit City, Sports Authority </li></ul>McGraw-Hill Companies, Inc./Gary He, photographer
  17. 17. <ul><li>Decline in Mall Shopping and Apparel Sales </li></ul><ul><li>-Lack of New Fashions </li></ul><ul><li>-Less Interest in Fashion </li></ul><ul><li>-Increase Price Consciousness </li></ul><ul><li>Lifestyle Formats – Abercrombie and Fitch and Hot Topics </li></ul>Issues in Specialty Store Retailing McGraw-Hill Companies, Inc./Gary He, photographer
  18. 18. <ul><li>Consolidation – Walgreens, CVS, Rite-Aid </li></ul><ul><li>Competition from Supermarkets, discount Stores and mail-in orders </li></ul><ul><li>Evolution to a New Format </li></ul><ul><li>Stand Alone Sites with Drive Thru Windows </li></ul><ul><li>Offering more frequent purchase food items </li></ul><ul><li>Improved systems provide personalized service in the pharmacy </li></ul>Issues in Drug Store Retailing
  19. 19. <ul><li>Deep and Narrow Assortments Destination Stores </li></ul><ul><li>Low Price and Service </li></ul><ul><li>Wholesaling to Business Customers and Retailing to Consumers </li></ul><ul><li>Incredible Growth </li></ul>Category Specialists Ryan McVay/Getty Images
  20. 20. 10 Most Profitable Businesses
  21. 21. 10 Least Profitable Businesses
  22. 22. <ul><li>Accounting Services </li></ul><ul><li>Legal Services </li></ul><ul><li>Dental Services </li></ul><ul><li>Specialized Design Services </li></ul><ul><li>“ Other” Health Practitioners </li></ul><ul><li>Outpatient Care Centers </li></ul><ul><li>Insurance Brokers </li></ul><ul><li>Physicians' Offices </li></ul><ul><li>Medical And Diagnostic Labs </li></ul><ul><li>Depository Credit Intermediation </li></ul>10 Most Profitable Businesses
  23. 23. 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
  24. 24. <ul><li>Independent </li></ul><ul><li>Corporate Retail chains </li></ul><ul><li>Franchise </li></ul>Types of Ownership
  25. 25. Multi-channel Retailing
  26. 26. “Tri-Channel” Retailing Digital Vision / Getty Images Catalog Steve Cole/Getty Images Internet The McGraw-Hill Companies, Inc./Andrew Resek, photographer Physical Store
  27. 27. Store Channel <ul><li>Browsing </li></ul><ul><li>Touching & Feeling Products </li></ul><ul><li>Personal Service </li></ul><ul><li>Cash Payment </li></ul><ul><li>Entertainment and Social Experience </li></ul><ul><li>Immediate Gratification </li></ul><ul><li>Risk Reduction </li></ul>
  28. 28. Catalog Channel <ul><li>Convenience </li></ul><ul><li>Safety </li></ul><ul><li>Quality of Visual Presentation </li></ul>
  29. 29. Internet Channel <ul><li>Broader Selection </li></ul><ul><li>More Information to Evaluate Merchandise </li></ul><ul><li>Personalization </li></ul><ul><li>Selling Merchandise with “Touch and Feel” Attributes </li></ul><ul><li>Perceived Risks in Electronic Shopping </li></ul>
  30. 30. Rainforest Cafe
  31. 31. Starbucks
  32. 32. Strengths? Issues?