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Objectives

1. Explain the role played by retailing in the marketing mix.2. Outline the decision framework for retailing.3. Distinguish between limited-line retailers and general-

merchandise retailers.4. Identify and explain each of the six bases for

categorizing retailers.5. Identify the major types of mass merchandisers.6. Discuss the opportunities and challenges of retailing

through the Internet. 7. Contrast the three types of planned shopping centres.8. Identify new trends in retailing.

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Retailing

• All the activities involved in selling goods and services to the ultimate consumer.

16The Many Faces of Retailing: In-Store, Direct and Internet

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Wheel of Retailing

• Hypothesized process of change in retailing, which suggests that new types of retailers gain a competitive foothold by offering lower prices through the reduction or elimination of their prices gradually rise, so that they then become vulnerable to a new low-price retailer with minimum services -- and the wheel turns.

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Chain Store

• Group of retail stores that are centrally owned and managed and that handle the same lines of products.

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Marketing Strategy in Retailing

16The Many Faces of Retailing: In-Store, Direct, and Internet

Figure 16.1

Identify market segments, select target market

Analyze competitors’ strengths and weaknesses

Develop acompetitive retail marketing mix thatfits the target market

Retail Marketing Mix• Goods and services Strategy• Location and Distribution Strategy• Pricing Strategy• Retail Image and Promotional Strategy

Target Market

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Retail Marketing Mix

• Goods and Services Strategy• Retail Pricing Strategy• Location and Distribution Strategy• Image and Promotional Strategy• The Differentiation Triangle

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Location and Distribution Strategy

Retail Trade Area AnalysisStudies that assess the relative drawingpower of alternative locations.

Law of Retail GravitationPrinciple that delineates the retail trade areaof a potential site on the basis of distancebetween alternative locations and relativepopulations.

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• The consumer’s perception of a store and of the shopping experience it provides.

16Retail Image

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• Differentiation of a retail store from competitors in the same strategic group through price, location, and store atmosphere and service.

16Differentiation Triangle

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Chapter 16Differentiation Triangle: Avenues for Differentiation Within Strategic Groups

The Many Faces of Retailing: In-Store, Direct and Internet

Figure 16.2

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Price

Location Store Atmosphere and Service

Chapter 16Bases for Classifying Retailers

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Figure 16.3

RetailerClassifications

Shopping Effort Expendedby CustomersConvenience - preferenceretailersShopping storesSpecialty outlets

Location of Retail TransactionsRetail storesNonstore retailingHouse-to-houseMail order and telephoneAutomatic merchandising Internet

Form of OwnershipCorporate chain storesIndependent retailersAssociation of independentsRetail cooperativeVoluntary chainFranchise

Services Provided to CustomersSelf-service Supermarkets, vending machines, warehouse retailersSelf-selection Mail-order retailing, discount retailers Limited service Door-to-door, sales, variety storesFull-service Specialty stores, department stores, large-format specialty stores

Margin and TurnoverHigh-margin/low-turnover retailers Jewellery storesLow-margin/low-turnover retailers Not viableLow-margin/high-turnover retailers Discount department stores, discount stores, big box storesHigh-margin/high-turnover retailers convenience stores

Product LinesLimited-line retailer Clothing, furnitureSpecialty retailer Sporting goods, tanning salon bookstoreGeneral-merchandise retailer Department store, discount store, catalogue retailer

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• Retailer that offers a large assortment of a single line of products or a few related lines of products.

16Limited-Line Store

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• Large-scale, departmentalized retail store offering a large variety of food products.

16Supermarket

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• Retailer that handles only part of a single line of products.

16Specialty Store

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• Large retailer that handles a variety of merchandise.

16Department Store

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• Retailer that offers an extensive range and assortment of low-priced merchandise.

16Variety Store

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• Retailer that concentrates on high turnover of items, emphasizes lower prices than department stores, and offers reduced services.

16Mass Merchandiser

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• Retailer that, in exchange for reduced price such traditional retail services as credit, sales assistance by clerks, and delivery.

16Discount House

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• Very large, warehouse-type retail store that offers low prices because of its no-frill format and paid membership requirement.

16Membership and Warehouse Club

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• Large, warehouse-type retail store that specializes in selling a great variety of one category of merchandise at very low prices.

16Large-Format Specialty Store

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• Groupings of two or more large-format retailers that result in large customer drawing power.

16Power Node

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• Mass merchandiser that operates on a low-price, self-service basis and carries lines of soft goods, hard goods, and groceries.

16Hypermarket

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• Retailer that specializes in selling manufacturers’ excess stocks of brand-name merchandise at a discount.

16Off-Price Retailer

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• Retailer that sells castoff clothes, furniture, and other products.

16Recycled Merchandise Retailer

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• Specialty retailer that either comes into a bankrupt store and handles the closeout, or buys the entire lot and sells it in its own stores.

16Liquidator

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• Retailer that mails catalogues to its customers and operates from a showroom displaying samples of its products.

16Catalogue Retailer

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• Retailer that sells products by direct contact between the retailer-seller and the customer at the home of the customer.

16House-to-House Retailer

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• The development of a network among consumers to sell and deliver from one level of consumers to another using social obligation, personal influence, and motivational techniques.

16Multilevel Marketing

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• Retailer that offers its customers the option of placing merchandise orders by mail, by telephone, or by visiting the mail-order desk of a retail store.

16Mail-Order Merchandiser

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Past and Future Modes of Marketing

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16The Many Faces of Retailing: In-Store, Direct and Internet

Figure 16.4

Time Bound Time Free

Location Free

Location Bound

GravitationalCommerce

DigitalCommerce

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• Retailing via Internet.

16E-tailing

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Insurance/financial servicesComputer hardware/softwareTravel servicesBooks, magazines, music/videosFlowers, gifts, greeting cardsOffice supplies

Cars Sporting goodsConsumer electronics/appliancesFood and beveragesCollectiblesApparel, shoes, accessHealth and beauty products

Toys and gamesTools/home improvement productsHome furnishings

16Potential Of Products to Be Sold on the Internet

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Figure 16.5

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Relative Potential Retail Categories

High

Moderate

Low

Chapter

• Group of retail stores planned, coordinated, and marketed as a unit to shoppers in a particular geographic trade area.

16Planned Shopping Centre

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• Neighbourhood Shopping Centre• Community Shopping Centre• Regional Shopping Centre

16Types of Shopping Centres

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• The retail practice of carrying dissimilar lines to generate added sales volume.

16Scrambled Merchandising

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