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chapter
RetailingRetailing
11
chapter
Learning ObjectivesLearning Objectives
11
1.1. Discuss the importance of retailing in the Discuss the importance of retailing in the U.S. economy.U.S. economy.
2. Explain the dimensions by which retailers 2. Explain the dimensions by which retailers can be classified.can be classified.
3. Describe the major types of retail 3. Describe the major types of retail operations.operations.
chapter
Learning Objectives (continued)Learning Objectives (continued)
11
4. Discuss nonstore retailing techniques.4. Discuss nonstore retailing techniques.
5. Define franchising and describe its two 5. Define franchising and describe its two basic forms.basic forms.
6. List the major tasks involved in developing 6. List the major tasks involved in developing a retail marketing strategy.a retail marketing strategy.
chapter
Learning Objectives (continued)Learning Objectives (continued)
11
7. Discuss the challenges of expanding 7. Discuss the challenges of expanding retailing operations into global markets.retailing operations into global markets.
8.8. Describe future trends in retailing.Describe future trends in retailing.
Learning Objective Learning Objective 1
Discuss the importance Discuss the importance of retailing in the U.S. economy.of retailing in the U.S. economy.
RetailingRetailing1
All the activities directly related to the sale of goods and services to the ultimate
consumer for personal, non-business use.
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
1
Learning Objective Learning Objective 2
Explain the dimensions byExplain the dimensions by which retailers can be classified.which retailers can be classified.
Classification of Retail OperationsClassification of Retail Operations
ClassificationClassificationof of
Retail Retail EstablishmentsEstablishments
Ownership
Level of Service
Product Assortment
Price
2
OwnershipOwnership
IndependentRetailers
Chain Stores
Franchises
ClassificationClassificationof of
OwnershipOwnership
2
Level of ServiceLevel of Service2
Full Service Self Service
Discount stores Exclusive storesFactory outlets Warehouse clubs
Classification SummaryClassification Summary2
Type of RetailerType of Retailer
Department StoreSpecialty StoreSupermarketConvenience StoreDrugstoreFull-line DiscounterSpecialty DiscounterWarehouse ClubsOff-price RetailerRestaurant
Service Service LevelLevel
Mod Hi-HighHighLowLowLow-ModMod-LowMod-LowLowLowLow-High
Assort-Assort-mentment PricePrice GrossGross
MarginMargin
BroadNarrowBroadMed-NarrowMediumMed-BroadMed-BroadBroadMed-NarrowMed-Narrow
Mod-HighMod-HighModerateMod HighModerateMod LowMod Lo-lowLow-lowerLowLow-High
Mod HighHighLowMod HighLowMod LowMod LowLowLowLow-High
Gross MarginGross Margin
The amount of money the retailer makes as a
percentage of sales after the cost of goods sold is
subtracted.
2
Learning Objective Learning Objective
Describe the major types Describe the major types of retail operations.of retail operations.
3
Major Types of Retail OperationsMajor Types of Retail OperationsDepartment Stores
Specialty Stores
Supermarkets
Drugstores
Convenience Stores
Discount Stores
Restaurants
3
Scrambled MerchandisingScrambled Merchandising3
The tendency to offer a wide variety of
nontraditional goods and services under one roof.
Categories of Discount StoresCategories of Discount Stores
Categories Categories of Discount of Discount
StoresStores
Full-LineDiscounters
Discount Specialty Stores
WarehouseClubs
Off-PriceDiscount Retailers
3
Mass MerchandisingMass Merchandising
Retailing strategy using moderate to low prices on
large quantities of merchandise and lower
service to stimulate high turnover of products.
3
Hypermarket and SupercenterHypermarket and Supercenter3
Hypermarket A large retail store combining
a supermarket and a full-line discount store.
SupercenterRetail store combining groceriesand general merchandise goods
with a wide range of services.
Learning Objective Learning Objective
Discuss nonstore retailing techniques.Discuss nonstore retailing techniques.
4
Nonstore RetailingNonstore Retailing
Major FormsMajor Formsofof
NonstoreNonstoreRetailingRetailing
Automatic Vending
Direct Retailing
Direct Marketing
Electronic Retailing
4
Direct RetailingDirect Retailing4
Door-to-Door
Office-to-Office
Home SalesParties
Direct RetailersDirect Retailerssell products:sell products:
Direct MarketingDirect Marketing4
Telemarketing
Catalogs & Mail Order
Direct Mail
Types Types of of
DirectDirectMarketingMarketing
Electronic Retailing
Electronic RetailingElectronic Retailing
On-Line Retailing
Shop-at-Home NetworksTypes Types ofof
ElectronicElectronicRetailingRetailing
4
Learning Objective Learning Objective
Define franchising and Define franchising and describe its two basic forms.describe its two basic forms.
5
Basic Forms of FranchisingBasic Forms of Franchising
Business FormatFranchising
Product and Trade Name FranchisingBasic FormsBasic Forms
of of FranchisingFranchising
5
Basic Forms of FranchisingBasic Forms of Franchising
Product and Trade Name Franchising
Dealer agrees to sell certain products provided by a manufacturer
or wholesaler.
BusinessFormat
Franchising
An ongoing business relationship between a franchiser
and a franchisee.
5
Learning Objective Learning Objective 6
List the major tasks involved List the major tasks involved in developing a retail marketing strategy.in developing a retail marketing strategy.
Retail Marketing StrategyRetail Marketing Strategy
Develop the “Six P’s”
Define & Select a Target MarketKey Tasks Key Tasks
in in StrategicStrategicRetailingRetailing
6
Defining a Target MarketDefining a Target Market
STEP 1:Segment the Market
Demographics
Geographics
Psychographics
6
Choosing the Retailing MixChoosing the Retailing Mix
STEP 2:Choose the Retailing Mix
Product
Price
Promotion
Place
Personnel
Presentation
6
The Retailing MixThe Retailing Mix
TargetTargetMarketMarket
Product
Price
Promotion
Place
Personnel
Presentation
6
Product OfferingProduct Offering
The mix of products offered to the consumer by the retailer; also called the product assortment or
merchandise mix.
6
Retail Promotion StrategyRetail Promotion Strategy6
RetailRetailPromotion Promotion
StrategyStrategy
Advertising
Public Relations
Publicity
Sales Promotion
The Proper LocationThe Proper Location6
Large, long-term commitment of resources
Location will affect future growth Local environment may change
over time
LocationLocation6
FreestandingStore
ShoppingCenter
Mall
LocationLocationDecisionsDecisions
Shopping Center and MallShopping Center and MallLocationsLocations
AdvantagesAdvantages
Design attracts shoppers
Anchor stores draw customers
Ample parking Unified image
DisadvantagesDisadvantages
Expensive leases Failure of common
promotion efforts Lease restrictions Anchor store
domination Direct competitors
6
PricePrice
QualityImage
High Price Low Price
Good Value
6
Presentation of the Retail StorePresentation of the Retail StoreEmployee Type & Density
Merchandise Type & Density
Fixture Type & Density
Sound
Odors
Visual Factors
Factors Factors inin
CreationCreationof a Store’sof a Store’s
Atmosphere Atmosphere
6
Personnel and Customer ServicePersonnel and Customer Service
Suggestive Selling
Trading UpTwo Common Two Common
SellingSellingTechniquesTechniques
6
Learning Objective Learning Objective
Discuss the challenges of Discuss the challenges of expanding retailing operations expanding retailing operations
into global markets.into global markets.
7
Global RetailingGlobal Retailing
Spread of communication and mass media
Lowering of trade barriers and tariffs
Growth potential in underserved
markets
Reasons for Reasons for Global ExpansionGlobal Expansion
7
Global RetailingGlobal RetailingMarket Size & Economics
Infrastructure & Distribution
Competition
Operations
Financial & Tax Reporting
Merchandise Acceptability
Partnering Capability
Factors UsedFactors Usedto Analyzeto Analyze
Global Retail Global Retail MarketsMarkets
7
Global RetailingGlobal Retailing
Prerequisites forPrerequisites forGoing GlobalGoing Global
Secure DomesticPosition
Long-TermPerspective
ConsistentGlobal andCorporateStrategies
7
Learning Objective Learning Objective
Describe future trends in retailing.Describe future trends in retailing.
8
Trends in RetailingTrends in Retailing
Trends in Trends in RetailingRetailing
Entertainment
Convenience and Efficiency
Customer Management
8
Customer ManagementCustomer Management8
Customer Relationship
MarketingLoyalty
Programs
Clienteling
CustomerCustomerManagementManagement
StrategiesStrategies