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Chapter 15 Retailing

Chapter 15 Retailing. Introduction. Retailer. An intermediary involved in selling goods and services to ultimate consumers (examples?). Wholesaler. An intermediary that takes title to the goods it handles and redistributes them to retailers, other distributors, and sometimes end consumers.

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Chapter 15 Retailing

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  1. Chapter 15Retailing

  2. Introduction Retailer • An intermediary involved in selling goods and services to ultimate consumers (examples?) Wholesaler • An intermediary that takes title to the goods it handles and redistributes them to retailers, other distributors, and sometimes end consumers • Employs 24 million people in the U.S. • Accounts for $4.5 trillion to the U.S. economy

  3. STRATEGIC IMPLICATIONS: RETAIL MARKETING STRATEGY • A retailer develops a marketing strategy based on the firm’s goals and strategic plans • Two fundamental steps: • Picking a target market: size and profit potential. POSITION. • Developing a retailing mix to satisfy the chosen target market • 4Ps + Personnel & Presentation used to create a retail image

  4. Product Personnel Place TargetMarket Presentation Promotion Price The Retailing Mix

  5. Choosing the Merchandising Mix The mix of products offered to the consumer by the retailer; also called the product assortmentor merchandise mix.

  6. Merchandising (Product) Strategy • Category management: Retailing strategy which views each product category as an individual profit center. • Slotting Allowances: lump-sum payments by manufacturers for stocking new products. • Scrambled Merchandising: Combining dissimilar product lines to boost sales volume. • Growth of Store brands – Battle for shelf space

  7. Presentation of the Retail Store - Atmosphere The overall impression conveyed by a store’s physical layout, décor, and surroundings. Five Senses.

  8. Two Common SellingTechniques Trading Up Suggestion Selling Personnel and Customer Service

  9. Price The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted. Price and payment options : how important? http://www.youtube.com/watch?v=kMimygVTgbU

  10. Ownership (independent, franchise chain) Service level (Nordstrom vs. Wal-mart) Assortment (CVS vs. Smith’s) Price (Tiffany vs. jewelry kiosk) Classification of Retail by

  11. Types of Retailers

  12. Department Stores Service Level Assort- ment Price GrossMargin High Broad High High

  13. Type of Retailer Service Level Assort- ment Price GrossMargin Specialty Store High Narrow High High Specialty Stores Specialty Stores

  14. Type of Retailer Service Level Assort- ment Price GrossMargin Specialty Discount Store Low Narrow Low Low Specialty Discount Stores OR Category Killers Specialty Discount Stores Deep Assortment

  15. Discount Stores Discount Low Service Broad Assortment Low price Low margin Shallow Assortment

  16. Off-Price Retailer Off-price Retailer Low service Narrow Line Prices Low prices Low margins

  17. Supercenters Low margins Supermarket Low service Broad Moderate prices

  18. Supermarkets • Large, self-service retailer with grocery specialty • Self-scanning trend: what is your take? • Competition: fierce, 1% profit on many items

  19. Warehouse Clubs • Warehouse club / wholesale club (Sam’s, Costco) • No frills, members only (why?) • Bulk purchases: price competition, homogeneous shopping goods

  20. Convenience Stores • Convenience products • Often with gas stations • Convenience stores: fill-in your “regular” shopping • Competition (fast food also) • 24/7 is more important • We pay for the convenience

  21. Non-Store Retailing • Vending: hi costs; hi prices (flat sales) • Vending is a $40 billion U.S. market • Cashless vending=wave of future • Direct Marketing (Mail, Catalog, Telemarketing) • E-tailing (TV shopping, online) • M-commerce: buy from mobile devices (e.g., cell phones)

  22. Wheel of Retailing • Newer, low-price types of retailing arise to challenge older established “bigger” retailers.

  23. Wheel of Retailing 3 Motel + Free Breakfast+ HBO Motel + Free Breakfast+ HBO + Happy Hour 4 2 New Entrant Motel + Free Breakfast 1 No Frills Motel a theory to explain the institutional changes

  24. eTailing and DTC • eTail= electronic retail • DTC= Direct to consumer • Shrinking use of wholesalers? (bypassing wholesalers more and more) • eBay: hybrid etailer/online auction site • Even sells services online (examples of services on ebay?)

  25. eTail • More innovative e-tail sites • Printing online www.printresponsibly.com • Nike ID http://nikeid.nike.com • Zappos http://www.zappos.com

  26. Future of re[E]tailing • http://www.youtube.com/watch?v=jtiJaX6q1i0

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