PowerPoint PresentationSelling and providing goods and
services to ultimate consumers for personal,
or household use.
Retailers manipulate their 4 P’s to get the best position in the
marketplace– in other words, to create a competitive
advantage
CLASSIFYING RETAIL OUTLETS
Price
Notes:
A retail establishment can be classified according to its
ownership, level of service, product assortment, and price.
Retailers use the latter three variables to position themselves in
the competitive marketplace. These variables can be combined in
several ways to create distinctly different retail
operations.
CLASSIFICATION BY OWNERSHIP
Franchises-many owners of many stores
Notes:
Independent retailers are retailers owned by a single person or
partnership. Around the world, most retailers are
independent.
Chain stores are owned and operated as a group by a single
organization.
Franchises are owned and operated by individuals, but are licensed
by a larger supporting organization.
BASIC FORMS OF FRANCHISING
Franchising
Business
Format
Franchising
Dealer agrees to sell certain products provided by a manufacturer,
but can use any sales tactics he chooses.
Ex-Michelin Tires, Avon
Dealer must sell the franchiser’s product in the exact way the
franchiser prescribes.
Ex – McDonalds, Wendy's
Notes:
The level of service that retailers provide can be classified along
a continuum, from full-service to self-service.
The mix of products offered to the consumer by the retailer; also
called the product assortment
Deep & narrow-like Starbucks
MAJOR TYPES OF RETAILERS BY PRODUCT OFFERING
Department Stores
Specialty Stores
On Line: Walgreen’s
Do you think drugstore Web sites add value for the consumer? What
services on Walgreens’ site would you be most likely to use? Would
Internet selling be a factor in your choice of a pharmacy?
Notes:
With the experimentation with alternative formats of retail stores,
classification has become more difficult.
Department stores: carries a wide variety of shopping and specialty
goods. Purchases are made within each department.
Specialty stores: merchandise is tailored to specific target
markets. Price is a secondary consideration to consumers.
Supermarkets: U.S. consumers spend about a tenth of income in
supermarkets. Trends: the growth of prepared foods and time-saving
products, and the need for convenience.
Drugstores: stock pharmacy-related products and services.
Convenience stores: defined as a miniature supermarket, carrying
only a limited line of convenience goods.
Discount stores: a retailer that competes on the basis of low
prices, high turnover, and high volume.
Restaurants: straddle the line between retailing establishments and
service establishments.
Major Forms
Notes:
Nonstore retailing is shopping without visiting a store. The major
forms are shown here.
DIRECT MARKETING
Avon
What advantages to you think the Avon site has over a visit from an
Avon representative? Can you get the same amount of product
information from each? Does Avon offer any products that you would
prefer to order from a representative?
CHOOSING THE RETAIL MIX
The retailing mix consists of six P’s:
the four P’s of the marketing mix (product, price, promotion, and
place), plus presentation and personnel.
CHOOSING THE RETAIL MIX
Employee Type & Density
Merchandise Type & Density
Fixture Type & Density
Atmosphere
Notes:
The presentation of a retail store helps determine the store’s
image and positioning in consumers’ minds. For example, positioning
as an upscale store would use a lavish or sophisticated
presentation.
The main element of presentation is atmosphere, with the most
influential factors shown on this slide.
Employee type and density: an employee’s general characteristics
such as friendly and knowledgeable, and the number of employees in
the selling space.
Merchandise type and density: the type of merchandise carried and
how it is displayed.
Fixture type and density: elegant, trendy, uncluttered. Technology
may be added as a fixture.
Sound: music at a restaurant or store.
Odors: smells of pastries in bakeries, fragrances as a key design
element.
Visual factors: colors can create a mood or focus attention.
4. Retailers are now adding an element of entertainment to their
store atmosphere.
How many
How knowledgeable
Good personal sellers
RETAILING STRATEGY-PRICING
I.e. – “How much do they sell T shirts for?”
Allow for Shrinkage and discounting
OR
Scrambled Merchandising
Scrambled merchandising involves offering several unrelated product
lines in a single store.
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.
Shrinkage
Shrinkage is the breakage and theft of merchandise by customers and
employees.
Multichannel Retailers
Multichannel retailers utilize and integrate a combination of
traditional store formats and nonstore formats such as catalogs,
television, and online retailing.
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.
Parasites
Parasite stores do 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.)
Destination Stores
Stores that generate customers from larger trading areas than their
neighbors or competitors.
i.e.-Dunkin’ Donuts: “It’s worth the trip!”
Power Centers
Huge shopping strips with multiple anchors and often a
supermarket
Anchor Stores