RETAILING

CHAPTER 8

RETAILING

Explain the dimensions by which retailers can

be classified

CLASSIFYING RETAILERS

OwnershipOwnership

Level of ServiceLevel of Service

Product AssortmentProduct Assortment

PricePrice

CLASSIFICATION OF RETAIL OPERATIONS

CLASSIFICATION OF OWNERSHIP

IndependentRetailers

IndependentRetailers

Chain StoresChain Stores

FranchisesFranchises

Owned by a single person or partnership and not part of a

larger retail institution

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

Owned and operated as a group by a single

organization

The right to operate a business or sell a product

The right to operate a business or sell a product

Full Service Self Service

Discount stores Exclusive storesFactory outlets Warehouse clubs

LEVEL OF SERVICE

Assort-Assort-mentment PricePrice GrossGross

MarginMargin

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 Lo-low

Low-very low

Low

Low-High

Mod High

High

Low

Mod High

Low

Mod Low

Mod Low

Low

Low

Low-High

Type of RetailerType of Retailer

Specialty Store

Supermarket

Convenience Store

Drugstore

Full-line Discounter

Specialty Discounter

Warehouse Clubs

Off-price Retailer

Restaurant

Service Service LevelLevel

Mod Hi-High

High

Low

Low

Low-Mod

Mod-Low

Mod-Low

Low

Low

Low-High

Department Store

TYPES OF STORES AND THEIR CHARACTERISTICS

GrossMargin

GrossMargin

PRICE

The amount of money the retailer makes as a

percentage of sales after the cost of goods

sold is subtracted.

Describe the major types of retail operations

MAJOR TYPES OF RETAIL OPERATIONS

MAJOR TYPES OF RETAIL OPERATIONS

Department StoresDepartment Stores

Specialty StoresSpecialty Stores

SupermarketsSupermarkets

DrugstoresDrugstores

Convenience StoresConvenience Stores

Discount StoresDiscount Stores

RestaurantsRestaurants

Full-LineDiscounters

Specialty Discount Stores

WarehouseClubs

Off-PriceDiscount Retailers

CATEGORIES OF DISCOUNT STORES

MassMerchandising

MassMerchandising

DISCOUNT STORES

Retailing strategy using moderate to low prices on large

quantities of merchandise and lower service to stimulate high

turnover of products.

DISCOUNT STORES

SupercenterSupercenter

Retail store combining groceries and general merchandise goods

with a wide range of services.

Retail store combining groceries and general merchandise goods

with a wide range of services.

Extreme-valueRetailing

Extreme-valueRetailing

Smaller stores emphasizing daily necessities at rock-bottom prices.

Smaller stores emphasizing daily necessities at rock-bottom prices.

CategoryKillers

CategoryKillers

SPECIALTY DISCOUNT STORES

Specialty discount stores that heavily

dominate their narrow merchandise

segment.

REVIEW LEARNING OUTCOMETYPES OF RETAIL OPERATIONS

Department

Stores

Department

StoresSpecialty

StoresSpecialty

StoresSuperma

rketSuperma

rketDrugstor

esDrugstor

esConvenie

nce Stores

Convenience

StoresDiscount Stores

Discount Stores

Restaurants

Restaurants

ScrambledMerchandising

ScrambledMerchandising

Full-line

Specialty

Warehouse

Off-price

supercenter

extreme- valuecategory

killer

factoryoutlet

Discuss non-store retailing techniques

NON-STORE RETAILING

Automatic VendingAutomatic Vending

Direct RetailingDirect Retailing

Direct MarketingDirect Marketing

Electronic RetailingElectronic Retailing

NON-STORE RETAILING

Door-to-DoorDoor-to-Door

Office-to-OfficeOffice-to-Office

Home SalesParties

Home SalesParties

DIRECT RETAILING

TelemarketingTelemarketing

Catalogs & Mail OrderCatalogs & Mail Order

Direct MailDirect Mail

Electronic RetailingElectronic Retailing

TYPES OF DIRECT MARKETING

Shop-at-home networksOn-line retailing

REVIEW LEARNING OUTCOMENON-STORE RETAILING TECHNIQUES

Vending

Direct retailing

Direct marketing

Electronic retailing

direct mailcatalogs

telemarketing

onlineshop at home

Nonstore RetailingNonstore Retailing

Define franchising and describe its

two basic forms

FRANCHISING

Business FormatFranchising

Business FormatFranchising

Product and Trade Name Franchising

Product and Trade Name Franchising

BASIC FORMS OF FRANCHISING

Product and Trade Name Franchising

Product and Trade Name Franchising

Dealer agrees to sell in products provided by a

manufacturer or wholesaler.

Dealer agrees to sell in products provided by a

manufacturer or wholesaler.

BusinessFormat

Franchising

BusinessFormat

Franchising

An ongoing business relationship between a

franchiser and a franchisee.

An ongoing business relationship between a

franchiser and a franchisee.

FRANCHISING

LARGEST U.S. FRANCHISORS

SOURCE: http://www.franchise.org, January 2006.

McDonald’sSouthlandSubwayBurger KingKFCPizza HutRadioShackTaco BellDairy QueenHooter’sJason’s DeliMarble SlabQuiznos Sub

List the major tasks involved in developing

a retail marketing strategy

RETAIL MARKETING STRATEGY

RETAIL MARKETING STRATEGY

Develop the “Six Ps”

Define & Select a Target Market

STEP 1:Segment the Market

STEP 1:Segment the Market

DemographicsDemographics

GeographicsGeographics

PsychographicsPsychographics

DEFINING A TARGET MARKET

STEP 2:Choose the

Retailing Mix

STEP 2:Choose the

Retailing Mix

ProductProduct

PricePrice

PromotionPromotion

PlacePlace

PersonnelPersonnel

PresentationPresentation

CHOOSING THE RETAILING MIX

Onlinehttp://www.publix.com

TargetTargetMarketMarket

ProductProduct

PricePrice

PlacePlace

PromotionPromotion

PersonnelPersonnel

PresentationPresentation

THE RETAILING MIX

ProductOffering

ProductOffering

CHOOSING THE RETAILING MIX

The mix of products offered to the consumer

by the retailer; also called the product assortment or

merchandise mix.

AdvertisingAdvertising

Public RelationsPublic Relations

PublicityPublicity

Sales PromotionSales Promotion

RETAIL PROMOTION STRATEGY

THE PROPER LOCATION

Economic growth potential Economic growth potential

CompetitionCompetition

GeographyGeography

Choosing a Community Choosing a Site

Freestanding StoreFreestanding Store

Shopping CenterShopping Center

MallMall

Neighborhood socioeconomics

Traffic flows

Land costs

Zoning regulations

Public transportation

Site’s visibility, parking, entrances and exits, accessibility, and safety

Fit with other stores

IMPORTANT FACTORS FOR SITE CHOICE

SHOPPING CENTER AND MALL LOCATIONS

Design attracts shoppers

Ample parking

Unified image

Sharing of common area expenses

Expensive rent

Failure of common promotion efforts

Lease restrictions

Hours of operation

Direct competitors

Consumer time limits

Advantages Disadvantages

RETAIL PRICES

QualityImage

High PriceHigh Price Low Price Low Price

Good ValueSingle Price Point

EDLP

AtmosphereAtmosphere

PRESENTATION OF THE RETAIL STORE

The overall impression conveyed by a store’s physical layout, décor,

and surroundings

PRESENTATION OF THE RETAIL STORE

Employee type and densityEmployee type and density

Merchandise type and densityMerchandise type and density

Fixture type and densityFixture type and density

SoundSound

OdorsOdors

Visual factorsVisual factors

Suggestion SellingSuggestion Selling

Trading UpTrading UpTwo Common

SellingTechniques

PERSONNEL AND CUSTOMER SERVICE

Easy-to-use Web site Easy-to-use Web site

Product availabilityProduct availability

Simple returnsSimple returns

CUSTOMER SERVICE FOR ON-LINE RETAILERS

REVIEW LEARNING OUTCOMEDEVELOPING A RETAIL MARKETING

STRATEGY

Describe new developments in retailing

NEW DEVELOPMENTS IN RETAILING

InteractivityInteractivityConsumers are

involved in the retail experience.

Consumers areinvolved in the retail

experience.

M-commerceM-commercePurchasing goods through mobile

devices.

Purchasing goods through mobile

devices.

NEW DEVELOPMENTS IN RETAILING

Describe trendsin retailing

TRENDS IN RETAILING

Entertainment Entertainment

Convenience and EfficiencyConvenience and Efficiency

Customer ManagementCustomer Management

TRENDS IN RETAILING

THANK YOU…