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  • General Merchandise retailer: Variety of product lines with considerable depth. Dept stores: mid 1800s Wide lines -- at least 25 people. Product lines organized into separate departments. Service-oriented
  • Discount stores: Self-service. Brands and store brands at low prices.
  • Less wide; but deep.

Retailing Retailing Presentation Transcript

  • Chapter 13 Retailing
  • Introduction
    • An intermediary involved in selling goods and services to ultimate consumers (examples?)
    Wholesaler Retailer
    • An intermediary that takes title to the goods it handles and redistributes them to retailers, other distributors, and sometimes end consumers
    • Employs 15 million people in the U.S.
    • Accounts for $4.5 trillion to the U.S. economy
    • A retailer develops a marketing strategy based on the firm’s goals and strategic plans
    • Two fundamental steps:
      • Picking a target market: size and profit potential. POSITION.
      • Developing a retailing mix to satisfy the chosen target market
        • 4Ps + Personnel & Presentation used to create a retail image
  • The Retailing Mix Target Market Product Price Place Promotion Personnel Presentation
  • Choosing the Merchandising Mix The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix .
  • Merchandising (Product) Strategy
    • Category management: Retailing strategy which views each product category as an individual profit center.
    • Slotting Allowances: lump-sum payments by manufacturers for stocking new products.
    • Scrambled Merchandising : Combining dissimilar product lines to boost sales volume.
    • Growth of Store brands – Battle for shelf space
  • Presentation of the Retail Store - Atmosphere The overall impression conveyed by a store’s physical layout, décor, and surroundings. Five Senses.
  • Personnel and Customer Service Suggestion Selling Trading Up Two Common Selling Techniques
  • Price Price and payment options : how important? The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted.
  • Classification of Retail by
    • Ownership (independent, franchise chain)
    • Service level (Nordstrom vs. Wal-mart)
    • Assortment (CVS vs. Smith’s)
    • Price (Tiffany vs. jewelry kiosk)
  • Department Stores (1) Assort- ment Price Gross Margin Broad High High Service Level High
  • Specialty Stores (2) Specialty Stores Assort- ment Price Gross Margin Narrow High High Type of Retailer Specialty Store Service Level High
  • Specialty Discount Stores (3) OR Category Killers Specialty Discount Stores Deep Assortment Assort- ment Price Gross Margin Narrow Low Low Type of Retailer Specialty Discount Store Service Level Low
  • Discount Stores (4) Broad Assortment Low price Low margin Discount Low Service Shallow Assortment
  • Off-Price Retailer (5) Narrow Line Prices Low prices Low margins Off-price Retailer Low service
  • Supercenters (6) Broad Moderate prices Low margins Supermarket Low service
  • Supermarkets
      • Large, self-service retailer with grocery specialty
      • Self-scanning trend: what is your take?
      • Competition: fierce, 1% profit on many items
  • Warehouse Clubs
    • Warehouse club / wholesale club (Sam’s, Costco)
      • No frills, members only (why?)
      • Bulk purchases: price competition, homogeneous shopping goods
  • Convenience Stores
    • Convenience products
    • Often with gas stations
      • Convenience stores: fill-in your “regular” shopping
        • Competition (fast food also)
        • 24/7 is more important
        • We pay for the convenience
  • Non-Store Retailing
        • Vending: hi costs; hi prices (flat sales)
        • Vending is a $40 billion U.S. market
        • Cashless vending=wave of future
        • Direct Marketing (Mail, Catalog, Telemarketing)
        • E-tailing (TV shopping, online)
        • M-commerce: buy from mobile devices
        • (e.g., cell phones)
  • Comparison between Discount, Specialty and Specialty Discount Attribute Specialty Specialty Discount Discount Example TCBY Yogurt Toys R us Wal-Mart Service High Low Low Price High Low Low Assortment Narrow Narrow Broad
  • Comparison between Discount, Specialty and Specialty Discount Attribute Specialty Specialty Discount Discount Margin High Low Low
  • Wheel of Retailing
    • Newer, low-price types of retailing arise to challenge older established “bigger” retailers.
  • Wheel of Retailing No Frills Motel Motel + Free Breakfast Motel + Free Breakfast + HBO Motel + Free Breakfast + HBO + Happy Hour New Entrant 1 2 3 4 a theory to explain the institutional changes
  • eTailing and DTC
    • eTail= electronic retail
    • DTC= Direct to consumer
    • Shrinking use of wholesalers? (bypassing wholesalers more and more)
    • eBay: hybrid etailer/online auction site
    • Even sells services online
    • (examples of services
    • on ebay?)
  • eTail
    • More innovative e-tail sites
    • Printing online
    • Nike ID
    • Zappos
  • Future of re[E]tailing