Ch. 1 RM

An Introduction to Retailing

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RetailingRetailing encompasses the business activities involved in selling goods and services to consumers for their personal, family, or household use. It includes every sale to the final consumer.

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Issues in RetailingHow can we best serve our customers while earning a fair profit?How can we stand out in a highly competitive environment where consumers have too many choices?How can we grow our business, while retaining a core of loyal customers?

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The PhilosophyRetailers can best address these questions by fully understanding and applying the basic principles of retailing, as well as the elements in a well-structured, systematic, and focused retail strategy.

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An Ideal Candidate for Retailing CareerBe a people personBe flexibleBe decisiveHave analytical skillsHave stamina

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The High Costs and Low Profits of Retailing

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A Typical Channel of DistributionManufacturerWholesalerFinal ConsumerRetailer

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The Retailers Role in the Sorting Process

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Multi-Channel RetailingA retailer sells to consumers through multiple retail formatsWeb sitesPhysical stores

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Relationship Management Among Retailers and SuppliersDisagreements may occur:control over channelprofit allocationnumber of competing retailersproduct displayspromotional supportpayment termsoperating flexibility

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Distribution TypesExclusive: suppliers make agreements with one or few retailers that designate the latter as the only ones in a specified geographic area to carry certain brands or productsIntensive: suppliers sell through as many retailers as possibleSelective: suppliers sell through a moderate number of retailers

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Comparing Distribution Types

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Special Characteristics Affecting RetailersRetailersStrategy Small Average SaleImpulse PurchasePopularityofStores

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Retail StrategyAn overall plan for guiding a retail firmInfluences the firms business activitiesInfluences firms response to market forces

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Six Steps in Strategic Planning1. Define the type of business 2. Set long-run and short-run objectives3. Determine the customer market4. Devise an overall, long-run plan5. Implement an integrated strategy6. Evaluate and correct

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Pay Less + Export More at Target

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Aspects of Retail StrategyGrowth-oriented objectivesAppeal to a prime marketDistinctive company imageFocusStrong customer serviceMultiple points of contactEmployee relationsInnovationCommitment to technologyCommunity involvementConstantly monitoring performance

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Applying the Retail ConceptCustomer OrientationCoordinated EffortValue drivenGoal OrientationRetailingConceptRetailStrategy

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Eliminating Shopper Boredom

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Customer ServiceActivities undertaken by a retailer in conjunction with the basic goods and services it sells.Store hoursParkingShopper-friendlinessCredit acceptanceSalespeople

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A Customer Respect ChecklistDo we trust our customers?Do we stand behind what we sell?Is keeping commitments to customers important to our company?Do we value customer time?Do we communicate with customers respectfully?Do we treat all customers with respect?Do we thank customers for their business?Do we respect employees?

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Relationship RetailingSeek to establish and maintain long-term bonds with customers, rather than act as if each sales transaction is a completely new encounterConcentrate on the total retail experienceMonitor satisfaction Stay in touch with customers

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Effective Relationship RetailingUse a win-win approachIt is harder to get new customers than to keep existing ones happyDevelop a customer databaseOngoing customer contact is improved with information on peoples attributes and shopping behavior

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Approaches to the Study of RetailingInstitutionalFunctionalStrategic

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Parts of Retail Management: A Strategic ApproachBuilding relationships and strategic planningRetailing institutions Consumer behavior and information gatheringElements of retailing strategyIntegrating, analyzing, and improving retail strategy