Chap001

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Chap001

  1. 1. 5 th Edition
  2. 2. Introduction to the World of Retailing Chapter 1 McGraw-Hill/Irwin Levy/Weitz: Retailing Management, 5/e Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
  3. 3. <ul><li>Retailing – a set of business activities that adds value to the products and services sold to consumers for their personal or family use. </li></ul><ul><li>A retailer is a business that sells products and/or services to consumers for personal or family use. </li></ul>What is Retailing?
  4. 4. Examples of Retailers <ul><li>Retailers: </li></ul><ul><li>-Sears, Holiday Inn, McDonalds, Amazon.com, Jiffy Lube, AMC Theaters, American Eagle Outfitter, FAO Schwartz, Kroger </li></ul><ul><li>Firms that are retailers and wholesalers that sell to other business as well as consumers: </li></ul><ul><li>-Office Depot, The Home Depot, United Airlines, Bank of America, Sams Clubs </li></ul><ul><li> </li></ul>
  5. 5. How Retailers Add Value <ul><li>Breaking Bulk </li></ul><ul><li>-Buy it in quantities customers want </li></ul><ul><li>Holding Inventory </li></ul><ul><li>-Buy it at a convenient place when you want it </li></ul><ul><li>Providing Assortment </li></ul><ul><li>-Buy other products at the same time </li></ul><ul><li>Offering Services </li></ul><ul><li>-See it before you buy, get credit, layaway </li></ul>
  6. 6. How Retailers Add Value Doll can be bought on credit or put on layaway Doll is featured on floor display Doll is offered in convenient locations in quantities of one Doll is developed in several styles Doll is developed at manufacturer The value of the product and service increases as the retailer performs functions.
  7. 7. Manufacturer’s Perspective The Four P’s of Marketing Distribution Retailers are part of the distribution channel Retailers are part of the distribution channel Product Price Promotion
  8. 8. Distribution Channel
  9. 9. Retailers are a Business Like Manufacturers Accounting Finance MIS Operations Marketing Human Resources
  10. 10. Decision Variables for Retailers Customer Service Store Design and Display Merchandise Assortment Communication Mix Location Pricing Retail Strategy
  11. 11. Economic Significance of Retailing <ul><li>Over $2.5 trillion in annual U.S. sales </li></ul><ul><li>-greater than medical care, housing, recreation combine </li></ul><ul><li>Employs 17% of population </li></ul><ul><li>-about the same as manufacturing and growing </li></ul><ul><li>Management training opportunities </li></ul><ul><li>Entrepreneurial opportunities </li></ul>
  12. 12. Nature of Retail Industry is Changing Mom and Pop Store To Today’s Retailer
  13. 13. Retailing is a High Tech Industry - Selling Merchandise over the Internet - Using Internet to manage supply chains - Analyze POS data to tailor assortments to stores - Computer systems for merchandise planning
  14. 14. Globalization of Retailing Source Merchandise From Around the World Wal-Mart Operates in U.S., China, Mexico, UK, Germany Carrefour has Stores in 25 Countries
  15. 15. Retail Environment Differs Across the Globe US Japan Concentration High Medium Store Size Big Small Role of Low High Wholesaling Efficiency High Low
  16. 16. JC Penney’s Strategic Evolution <ul><li>Main Street private label soft goods retailer </li></ul><ul><li>Changes in environment -- increased disposable income, growth of suburbs, interstate highway program </li></ul><ul><li>Emulate Sears in enclosed suburban malls </li></ul><ul><li>Focus on soft goods -- drop automotive, sporting goods, hardware </li></ul><ul><li>Develop catalog, develop electronic retailing </li></ul><ul><li>Future (?) </li></ul>
  17. 17. Sears’ Strategic Evolution <ul><li>Large number of merchandise categories -- appliances, hardware, apparel </li></ul><ul><li>Malls evolved into places for buying soft goods, hard goods sold at category killers </li></ul><ul><li>The Softer Side of Sears </li></ul><ul><li>Refocused on value -- Testing carts in stores </li></ul><ul><li>Acquired Lands’ End </li></ul><ul><li>Reviewed training program for new managers </li></ul>
  18. 18. Whole Foods Implementation <ul><li>Strategy - organic and natural foods supermarket chain Assortment beyond organic/natural foods </li></ul><ul><ul><li>Private labels - Whole Food™, 360 Day Value™ </li></ul></ul><ul><ul><li>Love, trust, and employee empowerment </li></ul></ul><ul><ul><li>Equality in compensation </li></ul></ul>
  19. 19. Hot Topic’s Retail Mix Retail Strategy Customer Service Location Merchandise Assortment Pricing Communication Mix Store Design And Display
  20. 20. Hot Topic’s Retail Mix Enclosed malls Location Strategy Customer Service Merchandise Assortment Pricing Communication Mix Store Display And Design
  21. 21. Hot Topic’s Retail Mix Many Different Hot Band T-shirts and Accessories Assortment Strategy Location Pricing Communication Mix Store Design and Display Customer Service
  22. 22. Hot Topic’s Retail Mix Modest with Sales Pricing Strategy Location Communication Mix Store Design and Display Customer Service Merchandise Assortment
  23. 23. Hot Topic’s Retail Mix Communication Mix TV and Magazine Ads Store Design And Display Customer Service Location Merchandise Assortment Pricing
  24. 24. Hot Topic’s Retail Mix Store Design and Display Heavy Metal, Gothic Look Customer Service Location Merchandise Assortments Pricing Communication Mix
  25. 25. Hot Topic’s Retail Mix Customer Service Modest Location Merchandise Assortment Pricing Communication Mix Store Design and Display
  26. 26. Macy’s Retail Mix Retail Strategy Customer Service Location Merchandise Assortment Pricing Communication Mix Store Design And Display
  27. 27. Macy’s Retail Mix Enclosed Malls Location Strategy Customer Service Merchandise Assortment Pricing Communication Mix Store Display And Design
  28. 28. Macy’s Retail Mix Many Items in Apparel and Soft Home Assortment Strategy Location Pricing Communication Mix Store Design and Display Customer Service
  29. 29. Macy’s Retail Mix Moderate with Frequent Sales Pricing Strategy Location Communication Mix Store Design and Display Customer Service Merchandise Assortment
  30. 30. Macy’s Retail Mix Communication Mix TV, Newspaper Ads and Special Events Store Design And Display Merchandise Assortment Pricing Customer Service Location
  31. 31. Macy’s Retail Mix Store Design and Display Ring with Displays Customer Service Location Merchandise Assortments Pricing Communication Mix
  32. 32. Macy’s Retail Mix Customer Service Modest Location Merchandise Assortment Pricing Communication Mix Store Design and Display
  33. 33. Wal-Mart’s Retail Mix Retail Strategy Customer Service Location Merchandise Assortment Pricing Communication Mix Store Design And Display
  34. 34. Wal-Mart’s Retail Mix Free-standing Stores Location Strategy Customer Service Merchandise Assortment Pricing Communication Mix Store Display And Design
  35. 35. Wal-Mart’s Retail Mix Location Pricing Communication Mix Store Design and Display Customer Service Large Number of Categories Few Items in Each Category Assortment Strategy
  36. 36. Wal-Mart’s Retail Mix Low, EDLP Pricing Strategy Location Communication Mix Store Design and Display Customer Service Merchandise Assortment
  37. 37. Wal-Mart’s Retail Mix Communication Mix TV and Newspaper Insert Ads Location Pricing Store Design and Display Customer Service Merchandise Assortment
  38. 38. Wal-Mart’s Retail Mix Store Design and Display Basic, Special Displays for Products Customer Service Location Merchandise Assortments Pricing Communication Mix
  39. 39. Wal-Mart’s Retail Mix Customer Service Limited Location Merchandise Assortment Pricing Communication Mix Store Design and Display
  40. 40. Career Opportunities in Retailing Start Your Own Business <ul><li>Walton Family (Wal-Mart) </li></ul><ul><li>Fisher (The Gap) </li></ul><ul><li>Wexner (Limited) </li></ul><ul><li>Menard (Menard’s) </li></ul><ul><li>Marcus, Blank (The Home Depot) </li></ul><ul><li>Kellogg (Kohl’s) </li></ul><ul><li>Schulze (Best Buy) </li></ul><ul><li>Levine (Family Dollar) </li></ul><ul><li>Gold (99Cent Only) </li></ul>List of Retail Entrepreneurs on Forbes 400 Richest Americans
  41. 41. Misconceptions About Careers in Retailing <ul><li>Don’t need college </li></ul><ul><li>Low pay </li></ul><ul><li>Long hours </li></ul><ul><li>Boring </li></ul><ul><li>Dead-end job </li></ul><ul><li>No benefits </li></ul><ul><li>Everyone is part-time </li></ul><ul><li>Unstable environment </li></ul>
  42. 42. Why You Should Consider Retailing <ul><li>Entry level management positions </li></ul><ul><li>-Department manager or assistant buyer/planner </li></ul><ul><li>-Manage and have P&L responsibility on your first job </li></ul><ul><li>Starting pay average with great benefits </li></ul><ul><li>- Some retailers pay graduate school </li></ul><ul><li>No two days are alike </li></ul><ul><li>Buying for financially oriented people </li></ul><ul><li>Management for people people </li></ul>
  43. 43. Types of Jobs in Retailing Most entry level jobs are in store management or buying, but… retailers also have staff specialists: --accounting and finance --real estate --human resource management --supply chain management --advertising --public affairs
  44. 44. Centro de Comercio Detallsita <ul><li>www.gda.itesm.mx/ccd </li></ul><ul><li>ADMINISTRACIÓN DE MERCANCÍAS / PRECIOS: Aprenderás el manejo de compras, resurtidos e inventarios que realizan las empresas de comercio al detalle. Analizarás la tecnología que está revolucionando el retail y estudiarás la administración y el establecimiento de precios, así como el desarrollo y presentación de líneas de producto, dando especial atención a las relaciones comprador-proveedor.  </li></ul><ul><li>INTERNSHIP I Y II: Aplicarás tus conocimientos dentro de una empresa detallista. en el verano trabajarás 7hrs. diarias por 5 semanas en una empresa de comercio al detalle, en donde conocerás las diferentes áreas de la empresa y tendrás la oportunidad de resolver algún problema o realizar un proyecto específico.   </li></ul><ul><li>ADMINISTRACIÓN DE LA TIENDA Y SERVICIO AL CLIENTE: Analizarás los procesos en el manejo y administración de una tienda. Aprenderás temas relacionados con sistemas de información, recursos humanos, imagen y diseño de la tienda ( visual merchandising ), servicio al cliente y CRM ( Customer Relationship Management ), entre otros.   </li></ul><ul><li>ESTRATEGIA DE COMERCIO DETALLISTA MULTICANAL: Conocerás las estrategias que siguen los principales detallistas y su implicación en las ventas. Comprenderás la metodología para la ubicación de puntos de venta. Aplicarás las estrategias de publicidad y promoción que se utilizan en el comercio detallista. Además, aprenderás la nueva tendencia en el retail de administración por categorías.    </li></ul>

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