Chapter 2

• Explain “Value” in Retailing• Describe Relationship Nurturing• Examine Relationship Building

– Goods Retailers– Services Retailers

• Discuss Impact of Technology on Retailing

• Consider Interplay Between Ethical Performance and Relationships

• Customers Believe Good Value for Money

• Customer Like Doing Business with Retailer

• Channel Members Like Doing Business with Retailer

• Involves:– Manufacturer– Wholesaler– Retailer

• Series of Activities and Processes• Provides a Given Level of Value for

Consumers• Closely Related to:

– Desire to Make Profit– Type of Strategy Pursued

• Benefits from Purchase• Cost VS Benefit• Varies by Shopper Type• Concerned with Outcome NOT

Process

• Expected Retail Strategy

• Augmented Retail Strategy

• Potential Retail Strategy

• Planning Value with Only A Price Perspective• Providing Value-Enhancing Services

Customers Don’t Want or Now Willing to Pay• Competing in the Wrong Value/Price Segment• Believing Augmented Elements Alone Create

Value• Paying Lip Service to Customer Service

• Customer Base

• Core Customers

• Expected

• Augmented

• Improvement– Employee Empowerment

• Range

• Level

• Choice

• Price

• Measurement

• Retention

Cost of Offering Service

High Low

High

Patronage Builders --

High-cost activities that are theprimary factors behind customerloyalties

Disappointers --

Expensive activities that do no real good.

Basics --

Low-cost activities that are“naturally expected.” They don’tbuild patronage, but theirabsence could reduce patronage.

Patronage Solidifiers --

The “low-cost little things” thatincrease loyalty.

Low

Value of Serviceto Customer

• Advantages– Retailer Saves Fee– Customer Loyalty Encouraged

• Disadvantages– Startup Costs– Slow Cash Flow– Administrative Costs– Customers without Card May Be

Discouraged

• Revolving

• Option

• Open

• Meet or Exceed Expectations• Dissatisfied Customers

– Don’t Complain• Produces Little or No Results• Not Easy

• Useful Rewards

• Appealing to Customers

• Attainable

• Honor Shopping Behavior

• Unique to Participating Retailers

• Personalized Communication

• Consistent

• Rewards

• Value-Added Benefits

• Customer Recognition

• Each Channel Member Dependent

• Every Value Delivery System Activity Must Be Enumerated

• Customer Recognition

• Small Retailers May Use Outside Suppliers

• Good as its Weakest Link

• Nature Related to Target Market Expectations

• Costs & Functions Influenced by Each Party’s Role

• Increasing Complexity

• Nonstore Requires Different Delivery System

• Channel Members are Adversarial

EffectiveRelationships

Common Positioning Goals

Reliability

Coordination

Communications

Input Into Channel Decisions

Trust

Fairness

Final Consumer Orientation

Activities Performed

Marketing Support

Inventory Planning

Timeliness of Payments

Proper Lead Time

Equitable Profit Distribution

Consistency

• Rented-Goods Services

• Owned-Goods Services

• Nongoods Services

ServicesRetailing

Intangibility

Inseparability

Perishability

Variability

Competence

Tangibles

Understanding the Customer

Communication

Access

Reliability

Courtesy

Credibility

Security

Responsiveness

• Roles Must Be Clear– Technology VS Humans– Consistent With Organization Objectives

• Customers Expect Certain Advances

• ATMs

• Instant Processing– Retail Purchases

• Smart Cards

Online Real-Time Banking

Banking by Computer

Banking by Telephone

Automated Teller Machines

In-Store Banking

Traditional Branches

Ba

nk

Co

st

Sa

vi n

gs

Cu

sto

me

r C

on

ve

nie

nc

e

• P-O-S Scanning Equipment

• Self-Scanning

• Electronic Gift Card

• Interactive Electronic Kiosks

• Mass Customization

• Articulate Acceptable Behavior

• Written Code of Ethics

• Punish Poor Behavior

• Top Managers Set Example

• Best Interest of Society

• Balance with Fair Level of Profitability

• Right to be Informed

• Right to Safety

• Right to be Heard

• “Value” in Retailing• How Relationships are Nurtured• How to Build Relationships

– Goods Retailers– Services Retailers

• Impact of Technology on Retailing• Understand the Interplay Between Ethical

Performance and Relationships

Questions?

Question

s?

Questions?

Questions?