2. THE VALUE OF RETAILING
Retailing
Retailing includes all activities involved in
Selling and providing goods and
services to ultimate consumers for personal,
or household use.
3. CLASSIFYING RETAIL OUTLETS
Ownership-place
Ownership-place
Level of Service-promotion
Level of Service-promotion
Classification
Classification
of
of
Retail
Retail
Establishments
Establishments
Product Assortment-product
Product Assortment-product
Price
Price
Retailers manipulate their 4 P’s to get the best position in the
marketplace– in other words, to create a competitive advantage
4. CLASSIFICATION BY OWNERSHIP
Independent
Independent
Retailers-one store
Retailers-one store
ownership
ownership
Chain Stores-many
Chain Stores-many
stores but only one
stores but only one
owner
owner
Franchises-many
Franchises-many
owners of many
owners of many
stores
stores
5. BASIC FORMS OF FRANCHISING
Product and
Product and
Trade Name
Trade Name
Franchising
Franchising
Dealer agrees to sell certain
Dealer agrees to sell certain
products provided by a
products provided by a
manufacturer, but can use any sales
manufacturer, but can use any sales
tactics he chooses.
tactics he chooses.
Ex-Michelin Tires, Avon
Ex-Michelin Tires, Avon
Business
Business
Format
Format
Franchising
Franchising
Dealer must sell the franchiser’s
Dealer must sell the franchiser’s
product in the exact way the
product in the exact way the
franchiser prescribes.
franchiser prescribes.
Ex – McDonalds, Wendy's
Ex – McDonalds, Wendy's
6. CLASSIFICATION BY LEVEL OF
SERVICE
Self Service
Factory outlets
Warehouse clubs
Full Service
Discount stores
Exclusive stores
7. CLASSIFICATION BY PRODUCT
OFFERING
The mix of products offered to the
consumer by the retailer; also called
the product assortment
Deep & narrow-like Starbucks
Or
Shallow & broad like Walmart
8. CLASSIFICATION BY PRODUCT
OFFERING
Depth of Product Line
• Specialty Outlets
• Category Killers
Breadth of Product Line
• General Merchandise Stores
• Scrambled Merchandising
Why do this?
10. MAJOR TYPES OF RETAILERS BY
PRODUCT OFFERING
Department Stores
Department Stores
Specialty Stores
Specialty Stores
Supermarkets
Supermarkets
Drugstores
Drugstores
Convenience Stores
Convenience Stores
Discount Stores
Discount Stores
Restaurants
Restaurants
11. NON-STORE RETAILING
Automatic Vending
Automatic Vending
Direct Marketing
Direct Marketing
Major Forms
Major Forms
of
of
Nonstore
Nonstore
Retailing
Retailing
Electronic Retailing
Electronic Retailing
13. CHOOSING THE RETAIL MIX
Product
Product
Choosing the
Choosing the
Retailing Mix
Retailing Mix
Place
Place
Price
Price
Personnel
Personnel
Promotion
Promotion
Presentation
Presentation
14. CHOOSING THE RETAIL MIX
Product
Product
Personnel
Personnel
Promotion
Promotion
Target
Market
Presentation
Presentation
Place
Place
Price
Price
15. PRESENTATION (COMMUNICATION) OF
THE RETAIL STORE
Employee Type & Density
Employee Type & Density
Merchandise Type & Density
Merchandise Type & Density
Fixture Type & Density
Fixture Type & Density
Factors
Factors
in
in
Creating
Creating
Store’s
Store’s
Atmosphere
Atmosphere
Sound
Sound
Odors
Odors
Visual Factors
Visual Factors
16. PERSONNEL OF THE RETAIL STORE
How many
How many
How knowledgeable
How knowledgeable
How helpful // invasive
How helpful invasive
Factors
Factors
in
in
Personnel
Personnel
decisions
decisions
Fit the image of the product
Fit the image of the product
Good personal sellers
Good personal sellers
17. RETAILING STRATEGY-PRICING
How much mark-up?
Allow for Shrinkage and discounting
OR
Use Everyday Low Pricing
Benchmark or Signpost Items –
items used by consumers as an index
of overall price level of the store
I.e. – “How much do they sell T shirts for?”
18. RETAILING STRATEGY - LOCATION
Central Business District
• Parasites
Regional Shopping Centers
• Anchor Stores
Strip Location
Freestanding
Freestanding
Store
Store
Shopping
Shopping
Center Tenant
Center Tenant
• Destination stores
• Power centers
Multichannel Retailers
Mall Tenant
Mall Tenant
20. Scrambled Merchandising
Scrambled merchandising involves
Scrambled merchandising involves
offering several unrelated product lines in
offering several unrelated product lines in
a single store.
a single store.
21. Retailing Mix
The retailing mix includes the activities
The retailing mix includes the activities
related to managing the store and the
related to managing the store and the
merchandise in the store, which includes
merchandise in the store, which includes
retail pricing, store location, retail
retail pricing, store location, retail
communication, and merchandise.
communication, and merchandise.
22. Shrinkage
Shrinkage is the breakage and theft of
Shrinkage is the breakage and theft of
merchandise by customers and
merchandise by customers and
employees.
employees.
23. Multichannel Retailers
Multichannel retailers utilize and
Multichannel retailers utilize and
integrate a combination of traditional
integrate a combination of traditional
store formats and nonstore formats such
store formats and nonstore formats such
as catalogs, television, and online
as catalogs, television, and online
retailing.
retailing.
24. Retail Life Cycle
The retail life cycle is the process of
The retail life cycle is the process of
growth and decline that retail outlets, like
growth and decline that retail outlets, like
products, experience, which consists of
products, experience, which consists of
the early growth, accelerated
the early growth, accelerated
development, maturity, and decline
development, maturity, and decline
stages.
stages.
25. Parasites
Parasite stores do not create their own
Parasite stores do not create their own
traffic. They make money based on
traffic. They make money based on
their proximity to things that will draw
their proximity to things that will draw
foot traffic. (bigger stores, train
foot traffic. (bigger stores, train
stations, airports, office buildings, etc.)
stations, airports, office buildings, etc.)
26. Destination Stores
Stores that generate customers from larger
Stores that generate customers from larger
trading areas than their neighbors or
trading areas than their neighbors or
competitors.
competitors.
i.e.-Dunkin’ Donuts: “It’s worth the trip!”
i.e.-Dunkin’ Donuts: “It’s worth the trip!”
27. Power Centers
Huge shopping strips with multiple
Huge shopping strips with multiple
anchors and often a supermarket
anchors and often a supermarket
28. Anchor Stores
A large store, such as a department store
A large store, such as a department store
or supermarket, that is prominently
or supermarket, that is prominently
located in a shopping mall to attract
located in a shopping mall to attract
customers who are then expected to
customers who are then expected to
patronize the other shops in the mall.
patronize the other shops in the mall.
Editor's Notes
Notes:
A retail establishment can be classified according to its ownership, level of service, product assortment, and price.
Retailers use the latter three variables to position themselves in the competitive marketplace. These variables can be combined in several ways to create distinctly different retail operations.
Notes:
Independent retailers are retailers owned by a single person or partnership. Around the world, most retailers are independent.
Chain stores are owned and operated as a group by a single organization.
Franchises are owned and operated by individuals, but are licensed by a larger supporting organization.
Notes:
The level of service that retailers provide can be classified along a continuum, from full-service to self-service.
On Line: Walgreen’s
Do you think drugstore Web sites add value for the consumer? What services on Walgreens’ site would you be most likely to use? Would Internet selling be a factor in your choice of a pharmacy?
Notes:
With the experimentation with alternative formats of retail stores, classification has become more difficult.
Department stores: carries a wide variety of shopping and specialty goods. Purchases are made within each department.
Specialty stores: merchandise is tailored to specific target markets. Price is a secondary consideration to consumers.
Supermarkets: U.S. consumers spend about a tenth of income in supermarkets. Trends: the growth of prepared foods and time-saving products, and the need for convenience.
Drugstores: stock pharmacy-related products and services.
Convenience stores: defined as a miniature supermarket, carrying only a limited line of convenience goods.
Discount stores: a retailer that competes on the basis of low prices, high turnover, and high volume.
Restaurants: straddle the line between retailing establishments and service establishments.
Notes:
Nonstore retailing is shopping without visiting a store. The major forms are shown here.
On Line
Avon
What advantages to you think the Avon site has over a visit from an Avon representative? Can you get the same amount of product information from each? Does Avon offer any products that you would prefer to order from a representative?
Notes:
The retailing mix consists of six P’s:the four P’s of the marketing mix (product, price, promotion, and place), plus presentation and personnel.
Notes:
Exhibit 11.4 shows the retailing mix.
Notes:
The presentation of a retail store helps determine the store’s image and positioning in consumers’ minds. For example, positioning as an upscale store would use a lavish or sophisticated presentation.
The main element of presentation is atmosphere, with the most influential factors shown on this slide.
Employee type and density: an employee’s general characteristics such as friendly and knowledgeable, and the number of employees in the selling space.
Merchandise type and density: the type of merchandise carried and how it is displayed.
Fixture type and density: elegant, trendy, uncluttered. Technology may be added as a fixture.
Sound: music at a restaurant or store.
Odors: smells of pastries in bakeries, fragrances as a key design element.
Visual factors: colors can create a mood or focus attention.
4. Retailers are now adding an element of entertainment to their store atmosphere.
