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THE VALUE OF RETAILING

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. Classification of Retail Establishments. Ownership-place. Level of Service-promotion.

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THE VALUE OF RETAILING

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  1. 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.

  2. Classificationof Retail Establishments Ownership-place Level of Service-promotion Product Assortment-product Price CLASSIFYING RETAIL OUTLETS Retailers manipulate their 4 P’s to get the best position in the marketplace– in other words, to create a competitive advantage

  3. Independent Retailers-one store ownership Chain Stores-many stores but only one owner Franchises-many owners of many stores CLASSIFICATION BY OWNERSHIP

  4. Product and Trade Name Franchising Dealer agrees to sell certain products provided by a manufacturer, but can use any sales tactics he chooses. Ex-Michelin Tires, Avon Business Format Franchising Dealer must sell the franchiser’s product in the exact way the franchiser prescribes. Ex – McDonalds, Wendy's BASIC FORMS OF FRANCHISING

  5. CLASSIFICATION BY LEVEL OF SERVICE Self Service Full Service Discount stores Factory outlets Warehouse clubs Exclusive stores

  6. 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

  7. CLASSIFICATION BY PRODUCT OFFERING • Depth of Product Line • Specialty Outlets • Category Killers • Breadth of Product Line • General Merchandise Stores • Scrambled Merchandising Why do this?

  8. Breadth versus depth of merchandise lines

  9. Department Stores Specialty Stores Supermarkets Drugstores Convenience Stores Discount Stores Restaurants MAJOR TYPES OF RETAILERS BY PRODUCT OFFERING

  10. NON-STORE RETAILING Major Forms ofNonstore Retailing Automatic Vending Direct Marketing Electronic Retailing

  11. Direct Mail Direct Marketing needs no personal interaction Catalogs & Mail Order Telemarketing DIRECT MARKETING

  12. Choosing the Retailing Mix Product Place Price Personnel Promotion Presentation CHOOSING THE RETAIL MIX

  13. Product Personnel Promotion TargetMarket Presentation Place Price CHOOSING THE RETAIL MIX

  14. Factors in Creating Store’s Atmosphere Employee Type & Density Merchandise Type & Density Fixture Type & Density Sound Odors Visual Factors PRESENTATION (COMMUNICATION) OF THE RETAIL STORE

  15. PERSONNEL OF THE RETAIL STORE Factors in Personnel decisions How many How knowledgeable How helpful / invasive Fit the image of the product Good personal sellers

  16. 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?”

  17. Freestanding Store Shopping Center Tenant Mall Tenant RETAILING STRATEGY - LOCATION • Central Business District • Parasites • Regional Shopping Centers • Anchor Stores • Strip Location • Destination stores • Power centers • Multichannel Retailers

  18. FIGURE 14-5 The retail life cycle

  19. Scrambled Merchandising • Scrambled merchandising involves offering several unrelated product lines in a single store.

  20. Retailing Mix • The retailing mix includes the activities related to managing the store and the merchandise in the store, which includes retail pricing, store location, retail communication, and merchandise.

  21. Shrinkage • Shrinkage is the breakage and theft of merchandise by customers and employees.

  22. Multichannel Retailers • Multichannel retailers utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs, television, and online retailing.

  23. Retail Life Cycle • The retail life cycle is the process of growth and decline that retail outlets, like products, experience, which consists of the early growth, accelerated development, maturity, and decline stages.

  24. Parasites Parasite storesdo not create their own traffic. They make money based on their proximity to things that will draw foot traffic. (bigger stores, train stations, airports, office buildings, etc.)

  25. Destination Stores • Stores that generate customers from larger trading areas than their neighbors or competitors. • i.e.-Dunkin’ Donuts: “It’s worth the trip!”

  26. Power Centers • Huge shopping strips with multiple anchors and often a supermarket

  27. Anchor Stores • A large store, such as a department store or supermarket, that is prominently located in a shopping mall to attract customers who are then expected to patronize the other shops in the mall.

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