Marketing: Real People, Real Choices 3rd edition 18-1©2003 Prentice Hall, Inc

Chapter 18

Offline Retailing and B2C E-Commerce

Marketing: Real People, Real Choices 3rd edition 18-2©2003 Prentice Hall, Inc

Chapter Objectives_1

Define retailing and understand how retailing evolves

Describe how retailers are classified

Understand the importance of store image to a retail positioning strategy and explain how a retailer can create an image in the marketplace

Marketing: Real People, Real Choices 3rd edition 18-3©2003 Prentice Hall, Inc

Chapter Objectives_2

Describe direct selling and automatic vending, two forms of nonstore retailing

Describe B2C e-commerce, its benefits, limitations, and future promise

Marketing: Real People, Real Choices 3rd edition 18-4©2003 Prentice Hall, Inc

Retailing

Final stop on the distribution path

The process by which products are sold to consumers for personal use

Retailers add value with image, inventory, service quality, location, and pricing policies

Marketing: Real People, Real Choices 3rd edition 18-5©2003 Prentice Hall, Inc

The Wheel of Retailing

New types of retailers find it easiest to enter the market by offering goods at lower prices than competitors; after they gain a foothold, they gradually trade up, improving facilities and increasing the quality and assortment of merchandise, and offering special amenities; upscaling increases costs causing prices to rise; higher prices open the door for a new entrant charging lower prices

Marketing: Real People, Real Choices 3rd edition 18-6©2003 Prentice Hall, Inc

Retail Life Cycle

Retailers are also products because they provide benefits and must offer a competitive advantage to survive

– Introduction– Growth– Maturity– Decline

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Factors Affecting the Future of Retailing

Demographics

Technology

Globalization

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Major Demographic Factors

Convenience for working women

Catering to specific age segments

Recognizing ethnic diversity

Marketing: Real People, Real Choices 3rd edition 18-9©2003 Prentice Hall, Inc

Classifying Retailers by What They Sell

All retailers are classified by the NAICS codes

Some lines still blurred

– scrambled merchandising - strategy of carrying a combination of food and nonfood items

Marketing: Real People, Real Choices 3rd edition 18-10©2003 Prentice Hall, Inc

Classifying Retailers by Level of Service

Self-service retailers

Full-service retailers

Limited-service retailers

Marketing: Real People, Real Choices 3rd edition 18-11©2003 Prentice Hall, Inc

Classifying Retailers by Merchandise Selection

Merchandise breadth

– Narrow versus Broad assortments

Merchandise depth

– Shallow versus Deep assortments

Marketing: Real People, Real Choices 3rd edition 18-12©2003 Prentice Hall, Inc

Store Types

Convenience stores

Supermarkets

Specialty stores

Department stores

Hypermarket stores

Discount stores

– General merchandise discount stores

– Off-price retailers– Warehouse clubs– Factory outlet store

Marketing: Real People, Real Choices 3rd edition 18-13©2003 Prentice Hall, Inc

Nonstore Retailing

Any method a firm uses to complete an exchange that does not require a customer visit to a store

– Direct selling

– Automatic vending

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Direct Selling

Direct selling occurs when a salesperson presents a product to one individual or a small group, takes orders, and delivers the merchandise

– Door-to-Door Sales– Parties and Networks

• party plan systems• multilevel pyramid schemes

Marketing: Real People, Real Choices 3rd edition 18-15©2003 Prentice Hall, Inc

Automatic Vending

Appealing for selling convenience goods because of small space required, and minimal personnel to maintain and operate

– French fries

– Software

– Levi’s jeans

Marketing: Real People, Real Choices 3rd edition 18-16©2003 Prentice Hall, Inc

B2C E-Commerce

Online exchange between companies and individual consumers

Marketing: Real People, Real Choices 3rd edition 18-17©2003 Prentice Hall, Inc

E-Commerce and the Customer

Benefits

– Shop 24/7– Less travel– More choices– More information– Price competition– Fast delivery

Limitations

– Lack of security– Fraud– Can’t touch items– Hard to distinguish

color/ texture online– Expensive to return

Marketing: Real People, Real Choices 3rd edition 18-18©2003 Prentice Hall, Inc

E-Commerce and the Marketer

Benefits

– The world is your marketplace

– Decreases costs– Very specialized

businesses– Real-time pricing– Tracking of

consumer behavior

Limitations

– Lack of security– Must maintain site – Price competition– Conflicts with

conventional retailers

– Legal issues not resolved

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Developing a Store Positioning Strategy

Store image

Atmospherics

Marketing: Real People, Real Choices 3rd edition 18-20©2003 Prentice Hall, Inc

Store Design: Setting the Stage

Store layout and traffic flow

Fixture type and merchandise density

The sound of music

Color and lighting

The Actors: Store Personnel

Pricing policy

Marketing: Real People, Real Choices 3rd edition 18-21©2003 Prentice Hall, Inc

Building the Theater: Store Location

Types of Locations

Site Selection

– Location planners evaluate trade area and conduct site evaluation