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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

    1. 1. Chapter 13 Retailing
    2. 2. Introduction <ul><li>An intermediary involved in selling goods and services to ultimate consumers (examples?) </li></ul>Wholesaler Retailer <ul><li>An intermediary that takes title to the goods it handles and redistributes them to retailers, other distributors, and sometimes end consumers </li></ul><ul><li>Employs 15 million people in the U.S. </li></ul><ul><li>Accounts for $4.5 trillion to the U.S. economy </li></ul>
    3. 3. STRATEGIC IMPLICATIONS: RETAIL MARKETING STRATEGY <ul><li>A retailer develops a marketing strategy based on the firm’s goals and strategic plans </li></ul><ul><li>Two fundamental steps: </li></ul><ul><ul><li>Picking a target market: size and profit potential. POSITION. </li></ul></ul><ul><ul><li>Developing a retailing mix to satisfy the chosen target market </li></ul></ul><ul><ul><ul><li>4Ps + Personnel & Presentation used to create a retail image </li></ul></ul></ul>
    4. 4. The Retailing Mix Target Market Product Price Place Promotion Personnel Presentation
    5. 5. Choosing the Merchandising Mix The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix .
    6. 6. Merchandising (Product) Strategy <ul><li>Category management: Retailing strategy which views each product category as an individual profit center. </li></ul><ul><li>Slotting Allowances: lump-sum payments by manufacturers for stocking new products. </li></ul><ul><li>Scrambled Merchandising : Combining dissimilar product lines to boost sales volume. </li></ul><ul><li>Growth of Store brands – Battle for shelf space </li></ul>
    7. 7. Presentation of the Retail Store - Atmosphere The overall impression conveyed by a store’s physical layout, décor, and surroundings. Five Senses.
    8. 8. Personnel and Customer Service Suggestion Selling Trading Up Two Common Selling Techniques
    9. 9. 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.
    10. 10. Classification of Retail by <ul><li>Ownership (independent, franchise chain) </li></ul><ul><li>Service level (Nordstrom vs. Wal-mart) </li></ul><ul><li>Assortment (CVS vs. Smith’s) </li></ul><ul><li>Price (Tiffany vs. jewelry kiosk) </li></ul>
    11. 11. Department Stores (1) Assort- ment Price Gross Margin Broad High High Service Level High
    12. 12. Specialty Stores (2) Specialty Stores Assort- ment Price Gross Margin Narrow High High Type of Retailer Specialty Store Service Level High
    13. 13. 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
    14. 14. Discount Stores (4) Broad Assortment Low price Low margin Discount Low Service Shallow Assortment
    15. 15. Off-Price Retailer (5) Narrow Line Prices Low prices Low margins Off-price Retailer Low service
    16. 16. Supercenters (6) Broad Moderate prices Low margins Supermarket Low service
    17. 17. Supermarkets <ul><ul><li>Large, self-service retailer with grocery specialty </li></ul></ul><ul><ul><li>Self-scanning trend: what is your take? </li></ul></ul><ul><ul><li>Competition: fierce, 1% profit on many items </li></ul></ul>
    18. 18. Warehouse Clubs <ul><li>Warehouse club / wholesale club (Sam’s, Costco) </li></ul><ul><ul><li>No frills, members only (why?) </li></ul></ul><ul><ul><li>Bulk purchases: price competition, homogeneous shopping goods </li></ul></ul>
    19. 19. Convenience Stores <ul><li>Convenience products </li></ul><ul><li>Often with gas stations </li></ul><ul><ul><li>Convenience stores: fill-in your “regular” shopping </li></ul></ul><ul><ul><ul><li>Competition (fast food also) </li></ul></ul></ul><ul><ul><ul><li>24/7 is more important </li></ul></ul></ul><ul><ul><ul><li>We pay for the convenience </li></ul></ul></ul>
    20. 20. Non-Store Retailing <ul><ul><ul><li>Vending: hi costs; hi prices (flat sales) </li></ul></ul></ul><ul><ul><ul><li>Vending is a $40 billion U.S. market </li></ul></ul></ul><ul><ul><ul><li>Cashless vending=wave of future </li></ul></ul></ul><ul><ul><ul><li>Direct Marketing (Mail, Catalog, Telemarketing) </li></ul></ul></ul><ul><ul><ul><li>E-tailing (TV shopping, online) </li></ul></ul></ul><ul><ul><ul><li>M-commerce: buy from mobile devices </li></ul></ul></ul><ul><ul><ul><li>(e.g., cell phones) </li></ul></ul></ul>
    21. 21. 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
    22. 22. Comparison between Discount, Specialty and Specialty Discount Attribute Specialty Specialty Discount Discount Margin High Low Low
    23. 23. Wheel of Retailing <ul><li>Newer, low-price types of retailing arise to challenge older established “bigger” retailers. </li></ul>
    24. 24. 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
    25. 25. eTailing and DTC <ul><li>eTail= electronic retail </li></ul><ul><li>DTC= Direct to consumer </li></ul><ul><li>Shrinking use of wholesalers? (bypassing wholesalers more and more) </li></ul><ul><li>eBay: hybrid etailer/online auction site </li></ul><ul><li>Even sells services online </li></ul><ul><li>(examples of services </li></ul><ul><li>on ebay?) </li></ul>
    26. 26. eTail <ul><li>More innovative e-tail sites </li></ul><ul><li>Printing online </li></ul><ul><li>Nike ID </li></ul><ul><li>Zappos </li></ul>
    27. 27. Future of re[E]tailing <ul><li> </li></ul>