Chapter 15 MKTG6

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Chapter 12 Copyright 2013 by Cengage Learning Inc. All rights reserved 1

Lamb, Hair, McDaniel

CHAPTER 15

Retailing

2012-2013

Karin

Smeds/GorillaCreativeImages/Get

tyImages


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Retailing

All the activities directly

related to the sale of goods

and services to the ultimate

consumer for personal,non-business use.

Retailing

2013 by Cengage Learning Inc. All rights reserved2 1


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The Role of Retailing

U.S. retailers employ nearly 25 millionpeople

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 insalesnearly 40 percent of the U.S. GDP

Industry is dominated by a few giantorganizations, such as Wal-Mart



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Classificationof Retail Operations

Ownership

Level of Service

Product Assortment

Price



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Exhibit 15.1

Types of Stores and Their

Characteristics

2013 by Cengage Learning Inc. All rights reserved

Assort-ment

PriceGrossMargin

Broad

NarrowBroad

Med-Narrow

Medium

Med-Broad

Med-Broad

Broad

Med-Narrow

Narrow

Mod-High

Mod-HighModerate

Mod High

Moderate

Mod Low

Mod Lo-low

Low-very low

Low

Low-High

Mod High

HighLow

Mod High

Low

Mod Low

Mod Low

Low

Low

Low-High

Type of Retailer

Specialty StoreSupermarket

Convenience Store

Drugstore

Full-line Discounter

Specialty Discounter

Warehouse Clubs

Off-price Retailer

Restaurant

ServiceLevel

Mod Hi-High

HighLow

Low

Low-Mod

Mod-Low

Mod-Low

Low

Low

Low-High

Department Store

Broad

Broad

Medium

Mod-High

Moderate

Moderate

Mod High

LowSupermarket

Drugstore

Mod Hi-High

Low

Low-Mod

Department Store


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IndependentRetailers

Chain Stores

Franchises

Owned by a single person orpartnership and not part of alarger retail institution

Owned and operated as a groupby a single organization

The right to operate a businessor to sell a product

Classificationof Ownership



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Level of Service

FullService SelfService



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Product Assortment

Classification based

on BREADTHandDEPTHof productlines.



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Price

The amount of moneythe retailer makes as a

percentage of sales after

the cost of goods sold is

subtracted.

GrossMargin



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Major Types of RetailOperations

Department Stores

Specialty Stores

Supermarkets

Drugstores

Convenience Stores

Discount Stores

Restaurants



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Types of Retail Operations

Department Store

A store housing severaldepartments under one roof.Each department is headed bya buyer, or department head

who selects merchandise.

Specialty StoreA retail store specializing in agiven type of merchandise.



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Types of Retail Operations

SupermarketLarge, departmentalized, self-service retailer. Specializes infood. Some use scrambledmerchandis ing.

DrugstoreA retail store that stockspharmacy-related productsand services as its main draw.

Convenience Store

A miniature supermarket,carrying only a limited line ofhigh-turnover conveniencegoods.



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Discount Stores

Full-linediscount store

A retailer that offersconsumers very limitedservice and carries abroad assortment ofwell-known, nationallybranded hard goods.



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Discount Stores

MassMerchandising

A retailing strategy usingmoderate to low prices onlarge quantities ofmerchandise and lower levelsof service to stimulate high

turnover of products.

Supercenter

Retail store that combinesgroceries and general

merchandise goods with awide range of services.



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Discount Stores

a retail store that offers a nearly completeselection of single-line merchandise and

uses self-service, discount prices, highvolume, and high turnover.

a specialty discount store that heavilydominate their merchandise segment.


A Special ty Discoun t Store is

A Category K il ler is


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Discount Stores

Warehousemembership clubs

Limited-service merchantwholesalers that sell a limitedselection of brand nameappliances, household items,and groceries on a cash-and-

carry basis to members.

Off-price retailer

A retailer that sells at prices 25percent or more belowtraditional department store

prices because it pays cash forits store and usually doesnt

ask for return privileges.



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Restaurants

Straddle the line between retail andservice establishments

Sell tangible products (food, drink) butalso services (food prep, food service)

Many could be considered specialtyretailers



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Nonstore Retailing

Automatic Vending

Direct Retailing

Direct Marketing

Electronic Retailing



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the use of machines to offer goods for sale.

Vending is the most pervasive retail business inthe United States, with 11.5 MILL IONvending

machines selling billions or dollars worth ofgoods annually.


Automat ic Vend ingis


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Direct Retailing

Door-to-Door

Office-to-Office

Home Sales Parties



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Types of Direct Marketing

Catalogs and Mail Order

Direct Mail

Telemarketing

Electronic Retailing


Shop-at-Home Networks


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Top E-Tailers by Sales VolumeAmerica's Top Ten Retail Businesses

Rank Company Web Sales Volume(in billions)

1 Amazon.com Inc. $34.2

2 Staples Inc. $10.2

3 Apple Inc. $5.24 Dell Inc. $4.8

5 Office Depot Inc. $4.1

6 Walmart.com $4.0

7 Sears $3.18 Liberty Media (owns QVC) $3.0

9 Office Max $2.8

10 CDW $2.7

23


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The Basic Forms of Franchising

Product andTrade NameFranchising

Dealer agrees to sell inproducts provided by amanufacturer or wholesaler.

BusinessFormat

Franchising

An ongoing businessrelationship between afranchiser and a franchisee.



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Top 10 Franchisors

1. Subway2. McDonalds3. 7-Eleven Inc.4. Hampton Inn/Hampton Inn

& Suites5. Supercuts6. H & R Block7. Dunkin Donuts

8. Jani-King9. Servpro10. ampm



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Retail Marketing Strategy

Develop a RetailingMix

Define & Selecta Target Market



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Defining a Target Market

STEP 1:Segment the Market

Demographics

Geographics

Psychographics



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Choosing the Retailing Mix

STEP 2:

Choose theRetailing Mix

Product

Promotion

Personnel

Place

Price

Presentation



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Choosing the Retailing Mix

ProductOffering

The mix of products

offered to the consumer bythe retailer; also called the

product assortment or

merchandise mix.



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Retail Promotion Strategy

Public Relations

Publicity

Sales Promotion

Advertising



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The Proper Location

Economic growthpotential

Competition

Geography

Choos ing a Communi ty



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The Proper Location

Socioeconomiccharacteristics

Traffic flows

Land costs

Choosing a Specif ic Site

Zoning Regulations

Public Transportation

Choo sing the Type of Site

Freestanding Store

Shopping Center

Mall



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Retail Prices

QualityImage

High PriceLow Price

Good ValueSingle Price Point



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Presentationof the Retail Store

Atmosphere

The overall impression

conveyed by a stores

physical layout, dcor,

and surroundings


P t ti


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Presentationof the Retail Store

Employee type and density

Fixture type and density

Sound

Odors

Visual factors

Merchandise type and density


P l d


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Personnel andCustomer Service

Suggestion Selling

Trading Up

Two CommonSelling

Techniques


C t S i


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Customer Servicefor On-Line Retailers

Easy-to-use Web site

Product availability

Simple returns



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New Developments in Retailing

InteractivityConsumers areinvolved in theretail experience.

M-commercePurchasing goodsthrough mobiledevices.

2013 b C L i I All i ht d39 7

Chapter 15 MKTG6

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