Berman Ch 01 11e

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1-1 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall An Introductio n to Retailing RETAIL MANAGEMENT: A STRATEGIC APPROACH 11th Edition 11th Edition BERMAN EVANS

Transcript of Berman Ch 01 11e

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

An Introduction to Retailing

RETAIL MANAGEMENT:A STRATEGICAPPROACH11th Edition11th Edition

BERMAN EVANS

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Chapter ObjectivesTo define retailing, consider it from different

perspectives, demonstrate its impact, and note its special characteristics

To introduce the concept of strategic planning and apply it

To show why the retailing concept is the foundation of a successful business, with an emphasis on the total retail experience, customer service, and relationship retailing

To indicate the focus and format of the text

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Retailing

Retailing encompasses the business activities involved in selling goods and services to consumers for their personal, family, or household use. It includes every sale to the final consumer.

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Issues in Retailing How can we best serve our customers while

earning a fair profit? How can we stand out in a highly competitive

environment where consumers have so many choices?

How can we grow our business while retaining a core of loyal customers?

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The PhilosophyRetailers can best address these questions by fully understanding and applying the basic principles of retailing, as well as the elements in a well-structured, systematic, and focused retail strategy.

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Figure 1-1: Boom Times for Dunkin’ Donuts

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Figure 1-2: Careers in Retailing

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An Ideal Candidate for a Retailing Career Must be a people person Must be flexible Should be decisive Must have analytical skills Must have stamina

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Table 1-1: The 10 Largest Retailers in the United States

Rank Company Main Emphasis

1 Wal-Mart Full-line discount stores, supercenters, membership clubs

2 Home Depot Home centers, design centers

3 CVS Caremark Drugstores

4 Kroger Supermarkets, convenience stores, jewelry stores

5 Costco Membership clubs

6 Target Full-line discount stores, supercenters

7 Walgreens Drugstores

8 Sears Holdings Department stores, specialty stores

9 Lowe’s Home centers

10 Safeway Supermarkets

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Manufacturer

WholesalerFinal

Consumer

Retailer

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Figure 1-5: The Retailer’s Role in the Sorting Process

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Multi-Channel Retailing

A retailer sells to consumers through multiple retail formats: Web sites Physical stores

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Figure 1-6: Brooks Brothers and Multi-Channel Retailing

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Relationship Management Among Retailers and Suppliers

Disagreements may occur in the following areas:control over channelprofit allocationnumber of competing retailersproduct displayspromotional supportpayment termsoperating flexibility

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Distribution TypesExclusive: suppliers make agreements with

one or few retailers, designating such retailers as the only ones to carry certain brands or products within a specified geographic area

Intensive: suppliers sell through as many retailers as possible

Selective: suppliers sell through a moderate number of retailers

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Figure 1-7: Comparing Distribution Types

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Impulse Purchase

Popularityof

Stores

Retailer’sStrategy

Small Average

Sale

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Retail Strategy

An overall plan for guiding a retail firm

Influences the firm’s business activities

Influences firm’s response to market forces

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Six Steps in Strategic Planning1. Define the type of business 2. Set long-run and short-run objectives3. Determine the customer market4. Devise an overall, long-run plan5. Implement an integrated strategy6. Evaluate and correct

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Figure 1-9: “Expect More. Pay Less” at Target

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Aspects of Target’s Strategy Growth objectives Appeal to a prime

market Distinctive image Focus Customer service Multiple points of

contact

Employee relations

Innovation Commitment to

technology Community

involvement Monitoring

performance

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Customer Orientation

Coordinated Effort

Value-driven

Goal Orientation

RetailingConcept

RetailStrategy

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Figure 1-11: The Build-A-Bear Experience: Never Boring

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Customer ServiceActivities undertaken by a retailer in

conjunction with the basic goods and services it sells. This includes:Store hoursParkingShopper-friendlinessCredit acceptanceSalespeople

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Figure 1-12: A Customer Respect Checklist

Do we trust our customers?Do we stand behind what we sell?Is keeping commitments to customers important to our company?Do we value customer time?Do we communicate with customers respectfully?Do we treat all customers with respect?Do we thank customers for their business?Do we respect employees?

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Relationship RetailingRetailers seek to establish and maintain

long-term bonds with customers, rather than act as if each sales transaction is a completely new encounterConcentrate on the total retail experienceMonitor satisfaction Stay in touch with customers

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Effective Relationship RetailingUse a “win-win” approach

It is easier to keep existing customers happy than to gain new ones

Develop a customer databaseOngoing customer contact is improved with

information on people’s attributes and shopping behaviors

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Approaches to the Study of Retailing

Institutional

Functional

Strategic

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Parts of Retail Management: A Strategic Approach

Building relationships and strategic planning Retailing institutions Consumer behavior and information gathering Elements of retailing strategy Integrating, analyzing, and improving retail

strategy

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