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2011.2.15 marketing


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2011.2.15 marketing

  1. 1. Lamb, Hair, McDaniel CHAPTER 15 Retailing 2010-2011
  2. 2. LO 1 Discuss the importance of retailing in the U.S. economy LO 2 Explain the dimensions by which retailers can be classified LO 3 Describe the major types of retail operations LO 4 Discuss nonstore retailing techniques Learning Outcomes
  3. 3. LO 5 Define franchising and describe its two basic forms LO 6 List the major tasks involved in developing a retail marketing strategy LO 7 Describe new developments in retailing Learning Outcomes
  4. 4. The Role of Retailing Discuss the importance of retailing in the U.S. economy LO 1
  5. 5. Retailing Retailing LO 1 All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use.
  6. 6. The Role of Retailing <ul><li>Over 1.6 million U.S. retailers employ more than 24 million people </li></ul><ul><li>Retailers account for 11.6 percent of U.S. employment </li></ul><ul><li>Retailing accounts for 13 percent of U.S. businesses </li></ul><ul><li>Retailers ring up almost $4 trillion in sales — nearly 40 percent of the U.S. GDP </li></ul><ul><li>Industry is dominated by a few giant organizations, such as Wal-Mart </li></ul>LO 1
  7. 7. <ul><li>Because of the recession, customers are in a particularly cost-conscious mood and focusing on value. To grab their attention retailers can: </li></ul>Beyond the Book Stress “Value” to Attract Customers SOURCE: Larry Freed, “Satisfied and Buying,” online at <ul><li>Offer unique value propositions, i.e. prices, customer services, loyalty programs </li></ul><ul><li>Use innovative marketing concepts that will resonate with consumers, e.g. pop-up shops or a “green emphasis </li></ul><ul><li>Appeal to time-strapped customers with an efficient multi-channel shopping experience </li></ul>LO 1
  8. 8. REVIEW LEARNING OUTCOME The Importance of Retailing LO 1 11.6% 13% 40% Retailing as a % of U.S. employment Retailing as a % of U.S. businesses Retailing as a % of GDP
  9. 9. Classification of Retail Operations Explain the dimensions by which retailers can be classified LO 2
  10. 10. Classification of Retail Operations Ownership Level of Service Product Assortment Price LO 2
  11. 11. Classification of Ownership LO 2 Independent Retailers Chain Stores Franchises Owned by a single person or partnership and not part of a larger retail institution Owned and operated as a group by a single organization The right to operate a business or sell a product
  12. 12. Level of Service LO 2 Full Service Self Service Discount stores Exclusive stores Factory outlets Warehouse clubs
  13. 13. Types of Stores and Their Characteristics LO 2 Assort- ment Price Gross Margin Broad Narrow Broad Med-Narrow Medium Med-Broad Med-Broad Broad Med-Narrow Narrow Mod-High Mod-High Moderate Mod High Moderate Mod Low Mod Low-low Low-very low Low Low-High Mod High High Low Mod High Low Mod Low Mod Low Low Low Low-High Type of Retailer Specialty Store Supermarket Convenience Store Drugstore Full-line Discounter Specialty Discounter Warehouse Clubs Off-price Retailer Restaurant Service Level Mod Hi-High High Low Low Low-Mod Mod-Low Mod-Low Low Low Low-High Department Store
  14. 14. Price Gross Margin LO 2 The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted.
  15. 15. Major Types of Retail Operations Describe the major types of retail operations LO 3
  16. 16. Major Types of Retail Operations LO 3 Department Stores Specialty Stores Supermarkets Drugstores Convenience Stores Discount Stores Restaurants Online
  17. 17. Categories of Discount Stores LO 3 Full-Line Discounters Specialty Discount Stores Warehouse Clubs Off-Price Discount Retailers
  18. 18. Discount Stores Retailing strategy using moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products. LO 3 Mass Merchandising
  19. 19. Discount Stores LO 3 Supercenter Retail store combining groceries and general merchandise goods with a wide range of services. Full-line discounter Retailer offering consumers very limited service and carrying a broad assortment of well-known, nationally branded “hard goods”.
  20. 20. Specialty Discount Stores Category Killers Specialty discount stores that heavily dominate their narrow merchandise segment. LO 3
  21. 21. Types of Retail Operations Department Stores Specialty Stores Supermarket Drugstores Convenience Stores Discount Stores Restaurants Scrambled Merchandising Shopping Specialty Goods Distinctive Products Customer Service Food Products Medications Health and Beauty Cosmetics Specialty High Turnover Goods LO 3 Full-line supercenter extreme- value category killer factory outlet Specialty Warehouse Off-price
  22. 22. Aldi <ul><li>Started in 1976 in Iowa, ALDI is increasing its market presence as a discount grocer. Offering a slim 1,400 products as ALDI select brands, the chain is able to give consumers deep discounts through supplier deals and their no-frills approach. </li></ul><ul><li>Products must meet national brand standards, but consumers purchase for up to 50% less. </li></ul>LO 3
  23. 23. Nonstore Retailing Discuss nonstore retailing techniques LO 4
  24. 24. Nonstore Retailing LO 4 Automatic Vending Direct Retailing Direct Marketing Electronic Retailing
  25. 25. Direct Retailing LO 4 Door-to-Door Office-to-Office Home Sales Parties Online
  26. 26. Types of Direct Marketing Shop-at-home networks Online retailing LO 4 Telemarketing Catalogs & Mail Order Direct Mail Electronic Retailing
  27. 27. Beyond the Book Top E-Tailers by Sales Volume LO 4 America's Top Ten Retail Businesses Rank Company Web Sales Volume (in billions) 1 Inc. $19.2 2 Staples Inc. $5.6 3 Dell Inc. $4.8 4 Office Depot Inc. $4.8 5 Apple Inc. $3.6 6 OfficeMax Inc. $3.1 7 Sears Holding Corp. $2.7 8 CDW Corp. $2.6 9 $2.1 10 Best Buy $2.0
  28. 28. <ul><li>Customer Satisfaction (out of 100 points) </li></ul>SOURCE: Larry Freed, “Satisfied and Buying,” online at LO 4 Top E-Tailers by Customer Satisfaction 86 84 83 81 80 80 Shutterfly 80
  29. 29. Nonstore Retailing Techniques Nonstore Retailing LO 4 Vending Direct retailing Direct marketing Electronic retailing direct mail catalogs telemarketing online shop at home
  30. 30. Vending Machine Variety <ul><li>Reverse Vending Machines </li></ul><ul><ul><li>Input recyclables and the machine sorts, compresses, and pays out refunds based on the container. </li></ul></ul><ul><li>Used Golf Ball Vending Machines </li></ul><ul><ul><li>Tilly-Miss fills candy-style dispensers with reclaimed golf balls. </li></ul></ul><ul><li>Kosher Hot Dog Vending Machines </li></ul><ul><ul><li>Kosher Cart cooks hot dogs and other kosher foods </li></ul></ul><ul><li>Custom Juice Drinks Vending Machines </li></ul><ul><ul><li>Select and mix custom juice drinks </li></ul></ul><ul><li>Moobella Custom Ice Cream Vending Machines </li></ul><ul><ul><li>Make custom ice cream by mixing base flavors and mix-ins </li></ul></ul>LO 4
  31. 31. Franchising Define franchising and describe its two basic forms LO 5
  32. 32. Basic Forms of Franchising Business Format Franchising Product and Trade Name Franchising LO 5
  33. 33. Franchising LO 5 Product and Trade Name Franchising Dealer agrees to sell in products provided by a manufacturer or wholesaler. Business Format Franchising An ongoing business relationship between a franchiser and a franchisee.
  34. 34. Largest U.S. Franchisors LO 5
  35. 35. Retail Marketing Strategy List the major tasks involved in developing a retail marketing strategy LO 6
  36. 36. Retail Marketing Strategy Develop the “Six Ps” Define & Select a Target Market LO 6
  37. 37. Defining a Target Market LO 6 STEP 1: Segment the Market Demographics Geographics Psychographics
  38. 38. Choosing the Retailing Mix LO 6 STEP 2: Choose the Retailing Mix Product Price Promotion Place Personnel Presentation Online
  39. 39. The Retailing Mix LO 6 Target Market Product Price Place Promotion Personnel Presentation
  40. 40. Choosing the Retailing Mix The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix. LO 6 Product Offering
  41. 41. Retail Promotion Strategy LO 6 Advertising Public Relations Publicity Sales Promotion
  42. 42. The Proper Location Choosing a Community Choosing a Site LO 6 Economic growth potential Competition Geography Freestanding Store Shopping Center Mall
  43. 43. Important Factors for Site Choice <ul><li>Neighborhood socioeconomics </li></ul><ul><li>Traffic flows </li></ul><ul><li>Land costs </li></ul><ul><li>Zoning regulations </li></ul><ul><li>Public transportation </li></ul><ul><li>Site’s visibility, parking, entrances and exits, accessibility, and safety </li></ul><ul><li>Fit with other stores </li></ul>LO 6
  44. 44. Shopping Center and Mall Locations <ul><li>Design attracts shoppers </li></ul><ul><li>Activities and anchor stores draw customers </li></ul><ul><li>Ample parking </li></ul><ul><li>Unified image </li></ul><ul><li>Sharing of common area expenses </li></ul><ul><li>Expensive leases </li></ul><ul><li>Failure of common promotion efforts </li></ul><ul><li>Lease restrictions </li></ul><ul><li>Hours of operation </li></ul><ul><li>Anchor store domination </li></ul><ul><li>Direct competitors </li></ul><ul><li>Consumer time limits </li></ul>LO 6 Advantages Disadvantages
  45. 45. Retail Prices Quality Image High Price Low Price Good Value Single Price Point EDLP LO 6
  46. 46. Presentation of the Retail Store The overall impression conveyed by a store’s physical layout, décor, and surroundings LO 6 Atmosphere
  47. 47. Presentation of the Retail Store LO 6 Employee type and density Merchandise type and density Fixture type and density Sound Odors Visual factors Online
  48. 48. Personnel and Customer Service LO 6 Suggestion Selling Trading Up Two Common Selling Techniques
  49. 49. Customer Service for On-Line Retailers LO 6 Easy-to-use Web site Product availability Simple returns
  50. 50. Developing a Retail Marketing Strategy Location PRICE Advertising, and depth of product assortment Width and hours public relations publicity, Customer service Layout and atmosphere LO 6 TARGET PLACE Promotion PRODUCT Personnel PRESENTATION and personal selling
  51. 51. New Developments in Retailing Describe new developments in retailing LO 7
  52. 52. New Developments in Retailing LO 7 Interactivity Consumers are involved in the retail experience. M-commerce Purchasing goods through mobile devices.