8-1 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Information Gathering and Processing in Retailing

RETAIL MANAGEMENT:A STRATEGICAPPROACH11th Edition11th Edition

BERMAN EVANS

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8-2 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter Objectives To discuss how information flows in a

retail distribution channel To show why retailers should avoid

strategies based on inadequate information

To look at the retail information system, its components, and recent advances

To describe the marketing research process

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Informationand theSupplier

Informationand theRetailer

Informationand the

Consumer

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Suppliers Need To Know

From the RetailerFrom the RetailerEstimates of

category salesInventory

turnover ratesFeedback on

competitorsLevel of

customer returns

From the CustomerFrom the CustomerAttitudes toward

styles and modelsExtent of brand

loyaltyWillingness to

pay a premium for superior quality

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Retailers Need To Know

From the SupplierFrom the SupplierAdvance notice

of new models and model changes

Training materials

Sales forecastsJustifications for

price changes

From the CustomerFrom the CustomerWhy people shop

thereCustomers’ likes

and dislikesWhere else people

shop

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Consumers Need To Know

From the SupplierFrom the SupplierAssembly and

operating instructions

Extent of warranty coverage

Where to send a complaint

From the RetailerFrom the RetailerWhere specific

merchandise is stocked in the store

Methods of payment acceptable

Rain check and other policies

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Retail Information System (RIS)Retail Information System (RIS)

Anticipates the information needs of retail managers

Collects, organizes, and stores relevant data on a continuous basis

Directs the flow of information to the proper decision makers

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Figure 8-2: A Retail Information System

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Data-Base ManagementData-Base Management

A major element in an RIS System gathers, integrates, applies, and

stores information in related subject areas

Used for Frequent shopper programs Customer analysis Promotion evaluation Inventory planning Trading area analysis

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Five Steps to Approaching Data-Base Five Steps to Approaching Data-Base ManagementManagement

Plan the particular data base and its components and determine information needs

Acquire the necessary informationRetain the information in a usable and

accessible formatUpdate the data base regularly to reflect

changing demographics, recent purchases, etc.

Analyze the data base to determine strengths and weaknesses

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Figure 8-4: Data-Base Management in Action

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Figure 8-5: Data Warehousing

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Components of a Data Warehouse

Physical storage location for data – the warehouse

Software to copy original databases and transfer them to warehouse

Interactive software to allow processing of inquiries

A directory for the categories of information kept in the warehouse

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Data Mining and MicromarketingData Mining and Micromarketing

Data mining is the in-depth analysis of information to gain specific insights about customers, product categories, vendors, etc.

Micromarketing is an application of data mining whereby retailers use differentiated marketing and develop focused retail strategy mixes for specific customer segments

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Figure 8-6: Applying UPC Technology to Gain Better Information

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Figure 8-7: The Marketing Research Process

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Marketing Research Marketing Research in Retailingin Retailing

The collection and analysis of information relating to specific

issues or problems facing a retailer

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Secondary DataSecondary Data

AdvantagesAdvantagesInexpensiveFastSeveral sources

and perspectivesGenerally

credibleProvides

background information

DisadvantagesDisadvantagesMay not suit

current studyMay be incompleteMay be datedMay not be accurate

or credibleMay suffer from

poor collection techniques

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Secondary Data SourcesSecondary Data Sources

InternalInternalSales reportsBilling reportsInventory

recordsPerformance

reports

ExternalExternalData bases

Academic Search Premier

GovernmentU.S. Census of

Retail TradeStatistical

Abstract of the U.S.

Public records

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Primary Data

AdvantagesAdvantagesCollected for

specific purposeCurrentRelevantKnown and

controlled source

DisadvantagesDisadvantagesMay be more

expensiveTends to be more

time consumingInformation may not

be acquiredLimited perspectives

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Primary Data DecisionsPrimary Data Decisions

In-house or outsource?Sampling method?

ProbabilityNon-probability

Data collection method?SurveyObservationExperimentSimulation

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Survey MethodsSurvey Methods

In personOver the telephoneBy mailOnline

DisguisedNon-disguised

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Figure 8-9: A Semantic Differential for Two Furniture Stores

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Mystery ShoppersMystery Shoppers

Retailers hire people to pose as customers in order to evaluate aspects of the store environment (e.g. sales presentations, display maintenance, and service calls)

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ExperimentsExperiments

An experiment is a research method in which one or more elements of a retail strategy mix are manipulated under controlled conditions. An element may be a price, a shelf

display, store hours, etc. If a retailer wants to find out the

effects of a price change on a brand’s sales, only the price of that brand is varied.

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SimulationSimulation

A simulation is a type of experiment whereby a computer program is used to manipulate the elements of a retail strategy mix rather than test them in a real-life setting.

Two simulation types are now being applied in retail settings: those based on mathematical models and those involving “virtual reality.”

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