2011.2.15 marketing
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Transcript of 2011.2.15 marketing
1
Lamb, Hair, McDaniel
CHAPTER 15
Retailing
2010-2011
2
LO 1 Discuss the importance of retailing in the U.S. economy
LO 2 Explain the dimensions by which retailers can be classified
LO 3 Describe the major types of retail operations
LO 4 Discuss nonstore retailing techniques
Learning OutcomesLearning Outcomes
3
LO 5 Define franchising and describe its two basic forms
LO 6 List the major tasks involved in developing a retail marketing strategy
LO 7 Describe new developments in retailing
Learning OutcomesLearning Outcomes
4
Discuss the importance of
retailing in the U.S. economy
The Role of Retailing
LO1
5
Retailing
All the activities directly
related to the sale of goods
and services to the ultimate
consumer for personal,
non-business use.
RetailingRetailing
LO1
6
The Role of Retailing
Over 1.6 million U.S. retailers employ more than 24 million people
Retailers account for 11.6 percent of U.S. employment
Retailing accounts for 13 percent of U.S. businesses
Retailers ring up almost $4 trillion in sales—nearly 40 percent of the U.S. GDP
Industry is dominated by a few giant organizations, such as Wal-Mart
LO1
7
Beyond
the
Book
Stress “Value” to Attract Customers
SOURCE: Larry Freed, “Satisfied and Buying,” online at http://www.internetretailer.com.
Because of the recession, customers are in a particularly cost-conscious mood and focusing on value. To grab their attention retailers can:
Offer unique value propositions, i.e. prices, customer services, loyalty programs
Use innovative marketing concepts that will resonate with consumers, e.g. pop-up shops or a “green emphasis
Appeal to time-strapped customers with an efficient multi-channel shopping experience
LO1
8
REVIEW LEARNING OUTCOME
The Importance of Retailing
11.6% 13%
40%
Retailing as a %of U.S. employment
Retailing as a %of U.S. businesses
Retailing as a %of GDP
LO1
9
Explain the dimensions by which retailers
can be classified
Classification of Retail Operations
LO2
10
Classification of Retail Operations
OwnershipOwnership
Level of ServiceLevel of Service
Product AssortmentProduct Assortment
PricePrice
LO2
11
IndependentRetailers
IndependentRetailers
Chain StoresChain Stores
FranchisesFranchises
Owned by a single person or partnership and not part of a larger retail institution
Owned by a single person or partnership and not part of a larger retail institution
Owned and operated as a group by a single organizationOwned and operated as a group by a single organization
The right to operate a business or sell a productThe right to operate a business or sell a product
LO2
Classification of Ownership
12
Level of Service
Full Service Self Service
Discount stores Exclusive storesFactory outlets Warehouse clubs
LO2
13
Types of Stores and Their Characteristics
Assort-Assort-mentment PricePrice GrossGross
MarginMargin
Broad
Narrow
Broad
Med-Narrow
Medium
Med-Broad
Med-Broad
Broad
Med-Narrow
Narrow
Mod-High
Mod-High
Moderate
Mod High
Moderate
Mod Low
Mod Low-low
Low-very low
Low
Low-High
Mod High
High
Low
Mod High
Low
Mod Low
Mod Low
Low
Low
Low-High
Type of RetailerType of Retailer
Specialty Store
Supermarket
Convenience Store
Drugstore
Full-line Discounter
Specialty Discounter
Warehouse Clubs
Off-price Retailer
Restaurant
Service Service LevelLevel
Mod Hi-High
High
Low
Low
Low-Mod
Mod-Low
Mod-Low
Low
Low
Low-High
Department Store
LO2
14
Price
The amount of money
the retailer makes as a
percentage of sales after
the cost of goods sold is
subtracted.
GrossMargin
GrossMargin
LO2
15
Describe the major types of
retail operations
Major Types of Retail Operations
LO3
16
Major Types of Retail Operations
Department StoresDepartment Stores
Specialty StoresSpecialty Stores
SupermarketsSupermarkets
DrugstoresDrugstores
Convenience StoresConvenience Stores
Discount StoresDiscount Stores
RestaurantsRestaurantsOnline
http://www.walgreens.com
LO3
17
Categories of Discount Stores
Full-LineDiscounters
Specialty Discount Stores
WarehouseClubs
Off-PriceDiscount Retailers
LO3
18
Discount Stores
MassMerchandising
MassMerchandising
Retailing strategy using moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products.
LO3
19
Discount Stores
SupercenterSupercenter
Retail store combining groceries and general merchandise goods with a wide range of services.
Retail store combining groceries and general merchandise goods with a wide range of services.
Full-line discounterFull-line discounter
Retailer offering consumers very limited service and carrying a broad assortment of well-known, nationally branded “hard goods”.
Retailer offering consumers very limited service and carrying a broad assortment of well-known, nationally branded “hard goods”.
LO3
20
Specialty Discount Stores
CategoryKillers
CategoryKillers
Specialty discount stores that heavily dominate their narrow merchandise segment.
LO3
21
Types of Retail Operations
Department Stores
Department Stores
Specialty Stores
Specialty Stores SupermarketSupermarket DrugstoresDrugstores Convenience
Stores
Convenience Stores
Discount Stores
Discount Stores RestaurantsRestaurants
ScrambledMerchandising
ScrambledMerchandising
Full-line
supercenter
extreme- value
categorykiller
factoryoutlet
ShoppingSpecialty Goods
Distinctive ProductsCustomer Service
Food Products
MedicationsHealth and Beauty
Cosmetics
Specialty
High TurnoverGoods
Specialty
Warehouse
Off-priceLO3
22
Aldi
Started in 1976 in Iowa, ALDI is increasing its market presence as a discount grocer. Offering a slim 1,400 products as ALDI select brands, the chain is able to give consumers deep discounts through supplier deals and their no-frills approach.
Products must meet national brand standards, but consumers purchase for up to 50% less.
LO3
23
Discuss nonstore retailing techniques
Nonstore Retailing
LO4
24
Nonstore Retailing
Automatic VendingAutomatic Vending
Direct RetailingDirect Retailing
Direct MarketingDirect Marketing
Electronic RetailingElectronic Retailing
LO4
25
Direct Retailing
Door-to-DoorDoor-to-Door
Office-to-OfficeOffice-to-Office
Home Sales PartiesHome Sales Parties
Online
http://www.avon.com
LO4
26
Types of Direct Marketing
TelemarketingTelemarketing
Catalogs & Mail OrderCatalogs & Mail Order
Direct MailDirect Mail
Electronic RetailingElectronic Retailing
Shop-at-home networksOnline retailing
LO4
27
Beyond
the
Beyond
the
Book
Book
Top E-Tailers by Sales Volume
America's Top Ten Retail Businesses
Rank Company Web Sales Volume (in billions)
1 Amazon.com Inc. $19.2
2 Staples Inc. $5.6
3 Dell Inc. $4.8
4 Office Depot Inc. $4.8
5 Apple Inc. $3.6
6 OfficeMax Inc. $3.1
7 Sears Holding Corp. $2.7
8 CDW Corp. $2.6
9 Newegg.com $2.1
10 Best Buy $2.0
LO4
28
SOURCE: Larry Freed, “Satisfied and Buying,” online at http://www.internetretailer.com.
Customer Satisfaction (out of 100 points)
LO4
Top E-Tailers by Customer Satisfaction
Netflix.com 86
QVC.com 84
Amazon.com 83
DrsFosterSmith.com 81
Apple.com 80
Newegg.com 80
Shutterfly 80
29
Nonstore Retailing Techniques
Vending
Direct retailing
Direct marketing
Electronic retailing
direct mailcatalogstelemarketing
onlineshop at home
Nonstore RetailingNonstore Retailing
LO4
30
Vending Machine Variety
• Reverse Vending Machines– Input recyclables and the machine sorts, compresses,
and pays out refunds based on the container.• Used Golf Ball Vending Machines
– Tilly-Miss fills candy-style dispensers with reclaimed golf balls.
• Kosher Hot Dog Vending Machines– Kosher Cart cooks hot dogs and other kosher foods
• Custom Juice Drinks Vending Machines– Select and mix custom juice drinks
• Moobella Custom Ice Cream Vending Machines– Make custom ice cream by mixing base flavors and
mix-insLO4
31
Define franchising and describe its two basic forms
Franchising
LO5
32
Basic Forms of Franchising
Business FormatFranchising
Business FormatFranchising
Product and Trade Name Franchising
Product and Trade Name Franchising
LO5
33
Franchising
Product and Trade Name Franchising
Product and Trade Name Franchising
Dealer agrees to sell in products provided by a manufacturer or wholesaler.
Dealer agrees to sell in products provided by a manufacturer or wholesaler.
BusinessFormat
Franchising
BusinessFormat
Franchising
An ongoing business relationship between a franchiser and a franchisee.
An ongoing business relationship between a franchiser and a franchisee.
LO5
34
Largest U.S. Franchisors
1. Subway 2. McDonald’s 3. Liberty Tax Services 4. Sonic Drive-In Restaurants 5. InterContinental Hotels
Group 6. Ace Hardware Corp. 7. Pizza Hut 8. The UPS Store/Mail Boxes
Etc. 9. Circle K 10. Papa John’s International Inc.
11. Jiffy Lube International Inc. 12. Instant Tax Service 13. Baskin-Robbin’s USA Inc. 14. KFC Corp. 15. Jani-King 16. Dairy Queen 17. Super 8 Worldwide 18. Arby’s 19. JAN-PRO Franchising International
Inc. 20. Taco Bell Corp.
LO5
35
List the major tasks involved in developing
a retail marketing strategy
Retail Marketing Strategy
LO6
36
Retail Marketing Strategy
Develop the “Six Ps”
Define & Select a Target Market
LO6
37
Defining a Target Market
STEP 1:Segment the Market
STEP 1:Segment the Market
DemographicsDemographics
GeographicsGeographics
PsychographicsPsychographics
LO6
38
Choosing the Retailing Mix
STEP 2:Choose the Retailing Mix
STEP 2:Choose the Retailing Mix
ProductProduct
PricePrice
PromotionPromotion
PlacePlace
PersonnelPersonnel
PresentationPresentation
Online
http://www.publix.com
LO6
39
The Retailing Mix
TargetTargetMarketMarket
ProductProduct
PricePrice
PlacePlace
PromotionPromotion
PersonnelPersonnel
PresentationPresentation
LO6
40
Choosing the Retailing Mix
ProductOffering
ProductOffering
The mix of products
offered to the consumer
by the retailer; also
called the product
assortment or
merchandise mix.
LO6
41
Retail Promotion Strategy
AdvertisingAdvertising
Public RelationsPublic Relations
PublicityPublicity
Sales PromotionSales Promotion
LO6
42
The Proper Location
Economic growth potential
Economic growth potential
CompetitionCompetition
GeographyGeography
Choosing a Community Choosing a Site
Freestanding StoreFreestanding Store
Shopping CenterShopping Center
MallMall
LO6
43
Important Factorsfor Site Choice
Neighborhood socioeconomics
Traffic flows
Land costs
Zoning regulations
Public transportation
Site’s visibility, parking, entrances and exits,accessibility, and safety
Fit with other stores
LO6
44
Shopping Center and Mall Locations
• Design attracts shoppers
• Activities and anchor stores draw customers
• Ample parking
• Unified image
• Sharing of common area expenses
• Expensive leases
• Failure of common promotion efforts
• Lease restrictions
• Hours of operation
• Anchor store domination
• Direct competitors
• Consumer time limits
Advantages Disadvantages
LO6
45
Retail Prices
QualityImage
High PriceHigh Price Low Price Low Price
Good ValueSingle Price Point
EDLP
LO6
46
Presentation of the Retail Store
AtmosphereAtmosphereThe overall
impression conveyed
by a store’s physical
layout, décor, and
surroundings
LO6
47
Presentation of the Retail Store
Employee type and densityEmployee type and density
Merchandise type and densityMerchandise type and density
Fixture type and densityFixture type and density
SoundSound
OdorsOdors
Visual factorsVisual factorsOnline
http://www.apple.com
LO6
48
Personnel and Customer Service
Suggestion SellingSuggestion Selling
Trading UpTrading Up
Two Common Two Common SellingSelling
TechniquesTechniques
LO6
49
Customer Service for On-Line Retailers
Easy-to-use Web site Easy-to-use Web site
Product availabilityProduct availability
Simple returnsSimple returns
LO6
50
TARGET
Developing a Retail Marketing Strategy
PLACELocation
Promotion
PRICE
Advertising,
PRODUCT
Personnel
PRESENTATION
and depth of product assortment
Width
and hours
public relationspublicity,
Customer service
Layoutand atmosphere
andpersonalselling
LO6
51
Describe new developments
in retailing
New Developments in Retailing
LO7
52
New Developments in Retailing
InteractivityInteractivityConsumers areinvolved in the retail experience.
Consumers areinvolved in the retail experience.
M-commerceM-commercePurchasing goods through mobile devices.
Purchasing goods through mobile devices.
LO7