1Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Retailing Prepared by Deborah Baker Texas Christian University Chapter

1Chap. 13 Marketing 7e Lamb Hair McDaniel©2004 South-Western College Publishing

RetailingRetailing

Prepared byPrepared byDeborah BakerDeborah Baker

Texas Christian UniversityTexas Christian University

Chapter 13


Learning ObjectivesLearning Objectives

1. Discuss the importance of retailing in the U.S. economy.

2. Explain the dimensions by which retailers can be classified.

3. Describe the major types of retail operations.


Learning Objectives Learning Objectives (continued)(continued)

4. Discuss nonstore retailing techniques.

5. Define franchising and describe its two basic forms.

6. List the major tasks involved in developing a retail marketing strategy.


Learning Objectives Learning Objectives (continued)(continued)

7. Discuss the challenges of expanding retailing operations into global markets.

8. Describe future trends in retailing.


Learning Objective Learning Objective

Discuss the importance of retailing in the U.S. economy.

11

On Linehttp://www.target.comhttp://www.walmart.comhttp://www.sears.com

On Linehttp://www.target.comhttp://www.walmart.comhttp://www.sears.com


RetailingRetailing

All the activities directly

related to the sale of goods

and services to the ultimate

consumer for personal,

non-business use.

11


The Role of RetailingThe Role of Retailing

Retailing is one of the largest employers

Retailers ring up almost a third of the U.S. GDP

Industry is dominated by a few giant organizations, such as Wal-Mart

11


Ten Largest Ten Largest U.S. RetailersU.S. Retailers

11



Explain the dimensions bywhich retailers can be classified.

22


Classification of Retail Classification of Retail OperationsOperations

ClassificationClassificationof of

Retail Retail EstablishmentsEstablishments

ClassificationClassificationof of

Retail Retail EstablishmentsEstablishments

OwnershipOwnership

Level of ServiceLevel of Service

Product AssortmentProduct Assortment

PricePrice

22


Classification of OwnershipClassification of Ownership

IndependentRetailers

IndependentRetailers

Chain StoresChain Stores

FranchisesFranchises

22


Level of ServiceLevel of Service

Full ServiceFull Service Self Service Self Service

Discount storesDiscount stores Exclusive storesExclusive storesFactory outlets Warehouse clubs

Factory outlets Warehouse clubs

22


Types of Stores and Types of Stores and Their CharacteristicsTheir Characteristics

Type of RetailerType of RetailerType of RetailerType of Retailer

Department StoreDepartment Store

Specialty StoreSpecialty Store

SupermarketSupermarket

Convenience StoreConvenience Store

DrugstoreDrugstore

Full-line DiscounterFull-line Discounter

Specialty DiscounterSpecialty Discounter

Warehouse ClubsWarehouse Clubs

Off-price RetailerOff-price Retailer

RestaurantRestaurant

Service Service LevelLevel

Service Service LevelLevel

Mod Hi-HighMod Hi-High

HighHigh

LowLow

LowLow

Low-ModLow-Mod

Mod-LowMod-Low

Mod-LowMod-Low

LowLow

LowLow

Low-HighLow-High

Assort-Assort-mentment

Assort-Assort-mentment PricePricePricePrice GrossGross

MarginMarginGrossGrossMarginMargin

BroadBroad

NarrowNarrow

BroadBroad

Med-NarrowMed-Narrow

MediumMedium

Med-BroadMed-Broad

Med-BroadMed-Broad

BroadBroad



Mod-HighMod-High

Mod-HighMod-High

ModerateModerate

Mod HighMod High

ModerateModerate

Mod LowMod Low

Mod Lo-lowMod Lo-low

Low-lowerLow-lower

LowLow

Low-HighLow-High

Mod HighMod High

HighHigh

LowLow

Mod HighMod High

LowLow

Mod LowMod Low

Mod LowMod Low

LowLow

LowLow

Low-HighLow-High

22


Gross MarginGross Margin

The amount of money the

retailer makes as a

percentage of sales after

the cost of goods sold is

subtracted.

22



Describe the major types of retail operations.

33


Major Types of Retail Major Types of Retail OperationsOperations

Department StoresDepartment Stores

Specialty StoresSpecialty Stores

SupermarketsSupermarkets

DrugstoresDrugstores

Convenience StoresConvenience Stores

Discount StoresDiscount Stores

RestaurantsRestaurants

33

On Linehttp://www.walgreens.com

On Linehttp://www.walgreens.com


Categories of Discount StoresCategories of Discount Stores

Categories Categories of Discount of Discount

StoresStores

Full-LineDiscounters

Discount Specialty Stores

WarehouseClubs

Off-PriceDiscount Retailers

33


Mass MerchandisingMass Merchandising

Retailing strategy using

moderate to low prices on

large quantities of

merchandise and lower

service to stimulate high

turnover of products.

33


Hypermarket and Hypermarket and SupercenterSupercenter

HypermarketHypermarket A large retail store combining

a supermarket and a full-line discount store.

A large retail store combining a supermarket and

a full-line discount store.

SupercenterSupercenterRetail store combining groceriesand general merchandise goods

with a wide range of services.

Retail store combining groceriesand general merchandise goods

with a wide range of services.

33



Discuss nonstore retailing techniques.

44


Nonstore RetailingNonstore Retailing

Major FormsMajor Formsofof

NonstoreNonstoreRetailingRetailing

Major FormsMajor Formsofof

NonstoreNonstoreRetailingRetailing

Automatic VendingAutomatic Vending

Direct RetailingDirect Retailing

Direct MarketingDirect Marketing

Electronic RetailingElectronic Retailing

44


Direct RetailingDirect Retailing

Door-to-DoorDoor-to-Door

Office-to-Office

Office-to-Office

Home SalesParties

Home SalesParties

Direct RetailersDirect Retailerssell products:sell products:

Direct RetailersDirect Retailerssell products:sell products:

44


On Linehttp://www.avon.com

On Linehttp://www.avon.com

Direct MarketingDirect Marketing

TelemarketingTelemarketing

Catalogs & Mail OrderCatalogs & Mail Order

Direct MailDirect Mail

Types Types of of

DirectDirectMarketingMarketing

Types Types of of

DirectDirectMarketingMarketing


44



On-Line RetailingOn-Line Retailing

Shop-at-Home NetworksShop-at-Home NetworksTypes Types

ofofElectronicElectronicRetailingRetailing

Types Types ofof

ElectronicElectronicRetailingRetailing

44On Linehttp://www.gap.comhttp://www.jcrew.com

On Linehttp://www.gap.comhttp://www.jcrew.com



Define franchising and describe its two basic forms.

55


Basic Forms of FranchisingBasic Forms of Franchising

Business FormatFranchising

Business FormatFranchising

Product and Trade Name Franchising


Basic FormsBasic Formsof of

FranchisingFranchising

Basic FormsBasic Formsof of

FranchisingFranchising

55

On Linehttp://www.sylvanlearning.com

On Linehttp://www.sylvanlearning.com


Largest U.S. FranchisersLargest U.S. Franchisers55


Basic Forms of FranchisingBasic Forms of Franchising



BusinessFormat

Franchising

BusinessFormat

Franchising

Dealer agrees to sell certain products provided by a

manufacturer or wholesaler.

Dealer agrees to sell certain products provided by a

manufacturer or wholesaler.

An ongoing business relationship between a franchiser

and a franchisee.

An ongoing business relationship between a franchiser

and a franchisee.

55



List the major tasks involved in developing a retail marketing strategy.

66


Retail Marketing StrategyRetail Marketing Strategy

Develop the “Six Ps”Develop the “Six Ps”

Define & Select a Target Market

Define & Select a Target MarketKey Tasks Key Tasks

in in StrategicStrategicRetailingRetailing

Key Tasks Key Tasks in in

StrategicStrategicRetailingRetailing

66


Defining a Target MarketDefining a Target Market

STEP 1:Segment the Market

STEP 1:Segment the Market

DemographicsDemographics

GeographicsGeographics

PsychographicsPsychographics

66


Choosing the Retailing MixChoosing the Retailing Mix

STEP 2:Choose the Retailing Mix

STEP 2:Choose the Retailing Mix

ProductProduct

PricePrice

PromotionPromotion

PlacePlace

PersonnelPersonnel

PresentationPresentation

66


The Retailing MixThe Retailing Mix

TargetTargetMarketMarket

ProductProduct

PricePrice

PromotionPromotion

PlacePlace

PersonnelPersonnel

PresentationPresentation

66


Product OfferingProduct Offering

The mix of products offered

to the consumer by the

retailer; also called the

product assortment or

merchandise mix.

66

On Linehttp://www.kroger.com

On Linehttp://www.kroger.com


Retail Promotion StrategyRetail Promotion Strategy

RetailRetailPromotion Promotion

StrategyStrategy

RetailRetailPromotion Promotion

StrategyStrategy

AdvertisingAdvertising

Public RelationsPublic Relations

PublicityPublicity

Sales PromotionSales Promotion

66


Factors to Consider in Site Factors to Consider in Site SelectionSelection

Economic growth potential

Economic growth potential

Area competitionArea competition

GeographyGeography

66


Location DecisionsLocation Decisions

Freestanding StoreFreestanding Store

Shopping Center Tenant

Shopping Center Tenant

Mall TenantMall Tenant

66

On Linehttp://www.mallofamerica.com

On Linehttp://www.mallofamerica.com


Shopping Center and Shopping Center and Mall LocationsMall Locations

AdvantagesAdvantages

Design attracts shoppers

Activities and anchor stores draw customers

Ample parking Unified image

DisadvantagesDisadvantages

Expensive leases Failure of common

promotion efforts Lease restrictions Anchor store

domination Direct competitors

66


PricePrice

QualityImage

QualityImage

High PriceHigh Price Low Price Low Price

Good ValueGood Value

66


Presentation of the Retail Presentation of the Retail StoreStore

Employee Type & DensityEmployee Type & Density

Merchandise Type & DensityMerchandise Type & Density

Fixture Type & DensityFixture Type & Density

SoundSound

OdorsOdors

Visual FactorsVisual Factors

Factors Factors inin

CreatingCreatingStore’sStore’s

Atmosphere Atmosphere

Factors Factors inin

CreatingCreatingStore’sStore’s

Atmosphere Atmosphere

66


Personnel and Customer Personnel and Customer ServiceService

Suggestive SellingSuggestive Selling

Trading UpTrading Up

Two Common Two Common SellingSelling

TechniquesTechniques

Two Common Two Common SellingSelling

TechniquesTechniques

66


Customer Service for Customer Service for On-Line RetailersOn-Line Retailers

Easy-to-use Web Site Easy-to-use Web Site

Product AvailabilityProduct Availability

Simple ReturnsSimple Returns

66



Discuss the challenges of expanding retailing operations into global markets.

77


The Top Ten The Top Ten Global Retailers Global Retailers

77


Global RetailingGlobal Retailing

Spread of communication and mass media

Spread of communication and mass media

Lowering of trade barriers and

tariffs

Lowering of trade barriers and

tariffs

Growth potential in underserved

markets

Growth potential in underserved

markets

Reasons for Reasons for Global ExpansionGlobal Expansion

77


Factors Used to Analyze Factors Used to Analyze Global Retail MarketsGlobal Retail Markets

Market Size & EconomicsMarket Size & Economics

Infrastructure & DistributionInfrastructure & Distribution

CompetitionCompetition

OperationsOperations

Financial & Tax ReportingFinancial & Tax Reporting

Merchandise AcceptabilityMerchandise Acceptability

Partnering CapabilityPartnering Capability

77


Global RetailingGlobal Retailing

Prerequisites forPrerequisites forGoing GlobalGoing Global

77

On Linehttp://www.walmartstores.com

On Linehttp://www.walmartstores.com

Secure DomesticPosition

Secure DomesticPosition

Long-TermPerspectiveLong-TermPerspective

ConsistentGlobal andCorporateStrategies

ConsistentGlobal andCorporateStrategies



Describe future trends in retailing.

88


Trends in RetailingTrends in Retailing

Trends in Trends in RetailingRetailing

EntertainmentEntertainment

Convenience and EfficiencyConvenience and Efficiency

Customer ManagementCustomer Management

88


Customer Management Customer Management StrategiesStrategies

Customer Relationship Marketing

Customer Relationship Marketing

LoyaltyProgramsLoyalty

Programs

ClientelingClienteling

88

Documents

1Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Retailing Prepared by Deborah Baker Texas Christian University Chapter