Retail Final Ppt

RETAILING AN OUTLOOK

THE WORLD OF RETAILING

Introduction to Retailing

Types of Retailers

Multi-Channel Retailing

Customer Buying Behavior

WHAT IS RETAILING?

Includes all the activities Involved in Selling Goods or Services Directly to Final Consumers

RETAILING IS SELLING

HISTORY

Need for food, water, and bodily comforts. Human aggressiveness. Trade was an outgrowth of friendly gift

giving. People who had more goods than they could

consume traded the excess away.

Amount of Service

Self-Service, Limited-Service andFull-Service Retailer

Amount of Service

Self-Service, Limited-Service andFull-Service Retailer

Product LineLength and Breadth of the Product

Assortment

Product LineLength and Breadth of the Product

Assortment

Relative PricesPricing Structure that is Used

by the Retailer

Relative PricesPricing Structure that is Used

by the Retailer

Retail OrganizationsIndependent, Corporate, or

ContractualOwnership Organization

CLASSIFICATION OF RETAILING

Self-Service Self-Service RetailerRetailer

Provide Few or No Services to Shoppers

i.e. Mini Market

Limited-ServiceLimited-ServiceRetailersRetailers

Provide Only a Limited Number of Services

to Shoppers i.e. WatsonFull-ServiceFull-Service

RetailersRetailers

Retailers that Provide a Full Range of Services

to Shoppersi.e. Tesco

CLASSIFICATION OF RETAILING:

AMOUNT OF SERVICE

Specialty Stores

Department Stores

Convenience Stores

Discount Stores

Narrow Product Line, Deep Assortment i.e. GS Gills or Athlete’s

OutletWide Variety of Product Lines i.e.

Clothing, Home Furnishings,(Jasco)

Limited Line of High-Turnover Convenience Goods i.e. 7-Eleven

Standard Merchandise at Lower Pricesi.e. Macro

Off-Price RetailersChanging Collection of Higher-Quality Goods at a Reduced Price i.e. Factory

Outlet (FOS)

Warehouse ClubsLimited Selection of Brand-Name

Grocery Items, Appliances, Etc. i.e. Reject Shop


PRODUCT LINE

Store Description

Low Prices and Offer Lower-Quality Goods and Customer Service

Low Prices and Offer Lower-Quality Goods and Customer Service

Discount Stores

Discount Stores

“Off-Priced” Retailers

“Off-Priced” Retailers

CatalogShowrooms

CatalogShowrooms

Higher Prices and Offer Higher-Quality Goods and Customer Service

Higher Prices and Offer Higher-Quality Goods and Customer Service

Regular Prices and Offer Normal-Quality Goods and Customer Service

Regular Prices and Offer Normal-Quality Goods and Customer Service


RELATIVE PRICES

DEPARTMENT STORES (1)

Assort-Assort-mentment PricePrice GrossGross

MarginMargin

Broad High High

Service Service LevelLevel

High

SPECIALTY STORES (2)

Specialty StoresSpecialty Stores


MarginMargin

Narrow High High

Type of RetailerType of Retailer

Specialty Store


High

SPECIALTY DISCOUNT STORES (3) OR CATEGORY KILLERS

Specialty DiscountStores

Specialty DiscountStores


MarginMargin

Narrow Low Low

Type of RetailerType of Retailer

Specialty Discount Store


Low

Deep Assortment

DISCOUNT STORES (4)

Broad Assortment Low price Low marginDiscount Low Service

Shallow Assortment

OFF-PRICE RETAILER (5)

Narrow Line PricesLow prices Low marginsOff-price Retailer Low service

WAREHOUSE CLUBS

Warehouse club / wholesale club (Sam’s, Costco)No frills, members only (why?)Bulk purchases: price competition, homogeneous

shopping goods

CONVENIENCE STORES

Convenience productsOften with gas stations

Convenience stores: fill-in your “regular” shopping Competition (fast food also) 24/7 is more important We pay for the convenience

MULTI CHANNEL RETAILING

MULTI CHANNELS

Designer shops Off pricers ( Factory outlets) Shop in shop Departmental store Discount stores Spin offs E –Retailing Catalogue Retailing Direct mail TV Tele retailing

OVER SEAS EXPANSION (WHY?)

More profits Crowded domestic market Overseas market gives capacity advantage.

OVER SEAS EXPANSION

Wholly owned subsidiaries. Franchise arrangements Licensed Joint venture

OFF SITE RETAILING

NATURE OF RETAIL INDUSTRY IS CHANGING

Mom and Pop Store

To Today’s Retailer

23

AIMSThis topic seeks to:

compare traditional and electronic retailing; identify the benefits of electronic retailing (e-

retailing); examine the key successes and factors; introduce models & features of e-retailing;

24

TRADITIONAL RETAILINGSelling to a final customer through a physicaloutlet or through direct communication e.g.:

Malls – collection of individual stores, individually managed. Mall management provides physical location where a retailer can create an outlet;

Generalised stores – have a unified management but carry different product lines;

Specialised stores – sell a specific product line;

25

TRADITIONAL RETAILING (CNTD) Franchise stores – a single marketing and brand,

but individual store may be run by a different management, with a fee paid back to franchisee.

Direct mailing – catalogue is sent to customer, who then send a mail order.

Other forms:

telemarketing; door-to-door sales; vending machines;

have moved away from physical outlet to virtual retailing.

26

RETAILING TO E-RETAILING

E-retailing results from mapping traditionalretailing to the new medium of the internet:

Specialised stores -> specialised e-stores;

Generalised stores -> generalised e-stores;

Malls -> E-malls;

Franchise stores -> ?

27

NEW CLASSES OF E-RETAILING

E-brokers - bring together customers and suppliers.

do not sell directly;

match customers’ requests to e-retailers;

search is based on attributes supplied by the consumer e.g. cheapest price;

important now (name-your-price) & in the future.

28

NEW CLASSES OF E-RETAILING (CNTD)

Direct selling by manufacturer:

permits mass customisation;

reduced costs;

new specialised products.

29

BENEFITS OF E-RETAILING

To the customer:

convenience;

better information;

competitive pricing;

customisation;

shopping anywhere, anytime.

30

BENEFITS OF E-RETAILING (CNTD)

To the e-retailer:

global reach;

better customer service;

low capital cost;

mass customisation;

targeted marketing;

more value added services;

new forms of specialised stores and niche marketing.

31

FEATURES OF E-RETAILING

Important features of an e-shop:

On-line catalogue for goods, linked to the order process ;

Provision of a search engine for products; Shopping cart, for good selection and automatic price

update; Personalisation of store layouts, promotions and

marketing; An online contact person; Order status checking facility; Use of forums and customer communities.

32

E-RETAILING MODELS

Specialised e-store;

Generalised e-store;

E-mall;

Direct Selling by the manufacturer;

E-broker;

E-services.

33

E-RETAILING SITES

Examples include:

Amazon.com; Walmart; Yahoo!Store; dell.com; ba.com; Priceline.com

Exercise:

Match examples to categories of models summarised in the previous slide.

Categories of Electronic Commerce

• Business-to-customer (B2C):Business-to-customer (B2C): Retailing Retailing of products and services directly to of products and services directly to individual customersindividual customers

• Business-to-business (B2B): Business-to-business (B2B): Sales of Sales of goods and services among businessesgoods and services among businesses

• Consumer-to-consumer (C2C):Consumer-to-consumer (C2C): Individuals use Web for private sales or Individuals use Web for private sales or exchangeexchange

ELECTRONIC COMMERCE

Benefits of Disintermediation to the Consumer

Figure 4-2

Manufacturer

Manufacturer

Manufacturer

Distributor Retailer

Retailer

Customer

Customer

Customer

Cost/

Sweater

$48.50

$40.34

$20.45

ELECTRONIC COMMERCE

THE END

Electronic Commerce Payment Systems

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 4 Electronic Commerce & Electronic BusinessChapter 4 Electronic Commerce & Electronic Business

SYSTEM DESCRIPTION

CREDIT CARDS SECURE SITE PRESERVES INFORMATION

ELECTRONIC CASH DIGITAL CURRENCY USED FOR MICROPAYMENTS

PERSON-TO-PERSON SEND MONEY TO SITES UNABLE TO USE CREDIT CARDS

DIGITAL WALLET SOFTWARE STORES CREDIT CARD INFORMATION

ELECTRONIC CHECK CHECK WITH ENCRIPTED DIGITAL SIGNATURE

SMART CARD MICROCHIP STORES ELECTRONIC CASH

ELECTRONIC BILL PAYMENT ELECTRONIC FUNDS TRANSFER

ELECTRONIC COMMERCE

DECISION VARIABLES FOR RETAILERS

Customer Service

Store Design and Display

MerchandiseAssortment

Communication Mix

LocationPricing

Retail

Strategy

CHAPTER 12

Retailing and Wholesaling

RETAILER MARKETING DECISIONS

RetailerStrategy

Target Market

Retail StorePositioning

RetailerStrategy

Target Market

Retail StorePositioning

RetailerMarketing Mix

Product and service assortment

Prices

Promotion

Place (location)

RetailerMarketing Mix


Prices

Promotion

Place (location)

PRODUCT ASSORTMENT AND SERVICES DECISIONS

Product Assortment• Width and Depth of Assortment• Quality of Products• Product Differentiation StrategiesServices Mix

Key Tool of Nonprice Competition

for Setting One Store Apart From

AnotherStore’s Atmosphere• Physical Layout• “Feel” That Suits the Target Market and Moves Customers to Buy

Price Decisions

Target Market,

Product & Service

Assortment,Competition

Place Decisions

Shopping Centers, Central

Business Districts, or

Power Centers, or Online Shopping

RETAILER’S PRICE, PROMOTION, AND PLACE DECISIONS

Promotion Decisions

Using Advertising,

Personal Selling, Sales Promotion,

Public Relations, &

Direct Marketing to

Reach Customers

New Retail Forms and Shortening Retail LifecycleNew Retail Forms and Shortening Retail Lifecycle

Growth of Nonstore RetailingGrowth of Nonstore Retailing

Increasing Intertype CompetitionIncreasing Intertype Competition

Growing Importance of Retail TechnologyGrowing Importance of Retail Technology

Global Expansion of Major RetailersGlobal Expansion of Major Retailers

Retail Stores as “Communities” or “Hangouts”Retail Stores as “Communities” or “Hangouts”

Rise of MegaretailerRise of Megaretailer

THE FUTURE OF RETAILING

1 = Discount2 = Superstore3 = Warehouse Club4 = Combination Store

1 = Discount2 = Superstore3 = Warehouse Club4 = Combination Store

44332211

11

2233

33 22

11

High MarginHigh PriceHigh Status

Low MarginLow PriceLow Status

THE WHEEL OF RETAILING

WHAT IS WHOLESALING?

All the activities involved in selling goods and services to those buying for resale or business use.

Wholesaler - those firms engaged primarily in wholesaling activity.

Wholesalers buy mostly from producers and sell mostly to:Retailers, Industrial consumers, and Other wholesalers.

WholesalerFunctions

ManagementServices & Advice

ManagementServices & Advice

Selling andPromoting

Selling andPromoting

MarketInformation

MarketInformation

Buying andAssortment Building

Buying andAssortment Building

Risk BearingRisk Bearing Bulk BreakingBulk Breaking

TransportationTransportation

FinancingFinancing WarehousingWarehousing

Wholesalers are Often Better at Performing One or More of the Following Channel Functions:

WHY ARE WHOLESALERS USED?

TYPES OF WHOLESALERS

Merchant WholesalerIndependently Owned

Business that Takes Title to the

Merchandise it Handles.

Brokers/ AgentsThey Don’t Take Title

to the Goods, and TheyPerform Only a Few

Functions.

Manufacturers’ Sales Branches and

OfficesWholesaling by Sellers or

Buyers Themselves Rather Than Through

Independent Wholesalers.

WHOLESALER MARKETING DECISIONS

WholesalerStrategy

Target Market

ServicePositioning

WholesalerStrategy

Target Market

ServicePositioning

WholesalerMarketing Mix


Prices

Promotion

Place (location)

WholesalerMarketing Mix


Prices

Promotion

Place (location)

Consolidation within the Industry is Reducing # of WholesalersConsolidation within the Industry is Reducing # of Wholesalers

Distinction Between Large Retailers and Wholesalers BlursDistinction Between Large Retailers and Wholesalers Blurs

Wholesalers Will Continue to Increase the Services ProvidedWholesalers Will Continue to Increase the Services Provided

Wholesalers Are Beginning to Go GlobalWholesalers Are Beginning to Go Global

TRENDS IN WHOLESALING

REST STOP:

REVIEW OF CONCEPT CONNECTIONS

1. Explain the roles of retailers and wholesalers in the distribution channel.

2. Describe the major types of retailers and give examples of each.

3. Identify the major types of wholesalers and give examples of each.

4. Explain the marketing decisions facing retailers and wholesalers.

SEE YOU NEXT…..IN CHAPTER 13

INTRODUCTION

An intermediary involved in selling goods and services to ultimate consumers (examples?)

Wholesaler

Retailer

An intermediary that takes title to the goods it handles and redistributes them to retailers, other distributors, and sometimes end consumers

•Employs 15 million people in the U.S.

•Accounts for $4.5 trillion to the U.S. economy

STRATEGIC IMPLICATIONS: RETAIL MARKETING STRATEGY

A retailer develops a marketing strategy based on the firm’s goals and strategic plans

Two fundamental steps:1. Picking a target market: size and

profit potential. POSITION. 2. Developing a retailing mix to satisfy

the chosen target market1. 4Ps + Personnel & Presentation used to

create a retail image

TargetTargetMarketMarket

ProductProduct

PricePrice

PlacePlace

PromotionPromotion

PersonnelPersonnel

PresentationPresentation

THE RETAILING MIX

CHOOSING THE MERCHANDISING MIX

The mix of products offered to the

consumer by the retailer; also called

the product assortment or

merchandise mix.

MERCHANDISING (PRODUCT) STRATEGY

Category management: Retailing strategy which views each product category as an individual profit center.

Slotting Allowances: lump-sum payments by manufacturers for stocking new products.

Scrambled Merchandising: Combining dissimilar product lines to boost sales volume.

Growth of Store brands – Battle for shelf space

PRESENTATION OF THE RETAIL STORE - ATMOSPHERE

The overall impression

conveyed by a store’s physical

layout, décor, and

surroundings.

Five Senses.

Suggestion SellingSuggestion Selling

Trading UpTrading UpTwo Common Two Common

SellingSellingTechniquesTechniques

PERSONNEL AND CUSTOMER SERVICE

PRICE

Price and payment options : how important?http://www.youtube.com/watch?v=kMimygVTgbU

Price and payment options : how important?http://www.youtube.com/watch?v=kMimygVTgbU

The amount of money the retailer

makes as a percentage of sales after

the cost of goods sold is subtracted.

CLASSIFICATION OF RETAIL BY1. Ownership (independent, franchise chain)2. Service level (Nordstrom vs. Wal-mart)3. Assortment (CVS vs. Smith’s)4. Price (Tiffany vs. jewelry kiosk)

WHEEL OF RETAILING

Newer, low-price types of retailing arise to challenge older established “bigger” retailers.

No Frills No Frills MotelMotel

MotelMotel+ Free Breakfast+ Free Breakfast

MotelMotel+ Free Breakfast+ Free Breakfast+ HBO+ HBO

MotelMotel+ Free Breakfast+ Free Breakfast+ HBO+ HBO

+ Happy Hour+ Happy Hour

New EntrantNew Entrant

WHEEL OF RETAILING

1

2

34

a theory to explain the institutional changes

ETAILING AND DTC

eTail= electronic retail DTC= Direct to consumer Shrinking use of wholesalers? (bypassing

wholesalers more and more) eBay: hybrid etailer/online auction site Even sells services online(examples of serviceson ebay?)

ETAIL

More innovative e-tail sites Printing online www.printresponsibly.com Nike ID http://nikeid.nike.com Zappos http://www.zappos.com

FUTURE OF RE[E]TAILING

http://www.youtube.com/watch?v=jtiJaX6q1i0

RETAIL MARKETING MIX AND PLANNING

Charles Blankson, Ph.D.

THE NATURE OF RETAIL MARKETING The key aspects of retail marketing is an

attitude of mind. In making retail marketing decisions, retailers

must consider the needs of the customers. Retail marketing decisions are driven by what

the shoppers need and want.2

THE NATURE OF RETAIL MARKETING … Retail marketing is therefore a philosophy

and is all about satisfying the customers What the customers regard as value and

what they buy is decisive. What the customers buy determines the

nature of the retailer’s business.3

THE NATURE OF RETAIL MARKETING

The essence of retail marketing is developing merchandise and services that satisfy specific needs of customers, and supplying them at prices that will yield profits.

Retailers must take the customers’ needs into consideration in retail operation.

4

THE NATURE OF RETAIL MARKETING

Retail marketing is stimulating, quick-paced, and influential.

It encompasses a wide range of activities including:Environmental analysisMarket researchConsumer analysisProduct planning etc.

5

THE CONCEPT OF RETAIL MARKETING

The retail marketing concept is the acceptance by the retailer that it is the “customer” and not “demand” that lie at the core of the retail organisation.

The retail marketing concept is a philosophy, not a system of retailing or retail structure.

It is founded on the belief that profitable retailing and satisfactory returns on investment can only be achieved by identifying, anticipating and satisfying customer needs and desires.

It is an attitude of mind that places the customer at the very centre of retailing activities.

71

IMPORTANCE OF MARKETING IN RETAILING

Marketing is a vital tool for every retailer, as it identifies current, unfulfilled needs and wants, which it defines and quantifies.

Marketing determines which target groups the retailer should serve.

Marketing could be seen as delivering an acceptable standard of living.

Marketing can ensure complete satisfaction and sustained customer loyalty.

Marketing depends on the efficient co-ordination of consumer prediction, product development, packaging design and influencing demand through appropriate communication medium.

From these, a suitable mix is achieved.72

RETAIL MARKETING OBJECTIVES

The retail marketing objective is a performance parameter which has been explicitly stated.

It can be stated in quantifiable terms and time terms so that results can be measured against it.

Three types of retail objectives include:1. Basic objective – those which defines

retailer’s long-term purposes.2. Goals – those which the retailer must

achieve to be successful3. Targets – short-term goals that require

immediate achievement.73

RETAIL MARKETING MIX Retail marketing mix is the term used to

describe the various elements and methods required to formulate and execute retail marketing strategy.

Retail managers must determine the optimum mix of retailing activities and co-ordinate the elements of the mix.

The aim of such coordination is for each store to have a distinct retail image in consumers’ mind.

The mix may vary greatly according to the type of market the retailer is in, and the type of product/services.

74.

RETAIL MARKETING MIX

While many elements may make up a firm’s retail marketing mix, the essential elements may include:

Store location, merchandise assortments Store ambience, customer service, price, Communication with customers

10

MIX …

Personal selling Store image Store design Sales incentives People Process Physical evidence

11

THE MIX PLANNING

The retail marketing mix is the vehicle through which a retailer’s marketing strategy is implemented and, in planning the mix, retailers should be guided by three basic principles:

1. The mix must be consistent with the expectation of target customers;

2. Elements must be consistent with each other to create synergy; and

3. The mix must be responsive to competitive strategy.

77.

COMPOSITION OF KEY ELEMENTS Place Product Price Promotion People Process Physical Environment

13

KEY ELEMENT

Place (store location) Target market Channel structure Channel management Retailer image Retail logistics Retail distribution

14

KEY ELEMENT

Product (merchandise) Product development Product management Product features and benefits Branding Packaging After-sales services

15

KEY ELEMENT

Price Costs Profitability Value for money Competitiveness Incentives Quality Status

16

KEY ELEMENT

Promotion Developing promotional mixes Advertising management Sales promotion Sales management Public relations Direct marketing

17

KEY ELEMENT

People element Staff capability Efficiency Availability Effectiveness Customer interaction Internal marketing

18

KEY ELEMENT

Process element Order processing Database management Service delivery Queuing system Standardisation

19

RETAIL MARKETING PLANNING

Retail marketing plan consists of: Setting objectives Systematic way of identifying a range of

options. Formulation of plans for achieving goals Logical sequence of retailing activities.

85

IMPORTANCE OF RETAIL MARKETING PLANNING Hostile and complex retail marketing

environment External and internal retail organisation

factors interact Maximising revenue Maximising profit Maximising return on investment Minimising costs

Each element has conflicting needs All these variables interact All these variables result in optimum

compromise.86.

MANAGERIAL USE

To help identify sources of competitive advantage.

To force an organised retail approach To develop specific areas of retail

activities. To ensure consistent relationships

between retail organisation and its proximate environment.

To inform customers, suppliers and competitors.

87.

APPROACHES TO PLANNING

Top down approach Retail management sets goals and plans for

all levels of management.Bottom up approach Various units prepare own goals and plans

sent up for approval.88.

TYPES OF PLANNING

Annual plan – short term and tactical.

Long range – three to five years relating to strategic retail management.

Strategic plans – five to ten years long term plans relating to the adaptation of the retailing approach.

89

SHORT-TERM RETAIL PLANNING

Short-termTactical planning relating to: Current retail marketing position Strategy for the year Objectives for the year Action , budgets and controls. Coordinating retail activities within

departments.25

LONG-TERM PLAN

Long-termMedium range planning relating to: Major factors and forces affecting the

retailer. Long-term objectives. Resources required. Reviewed and updated regularly. Deals with current business

26

STRATEGIC RETAIL PLANNING

This is the process of developing and maintaining a strategic fit between the retail organisation’s capabilities and its changing marketing opportunities.

It relies on developing a clear corporate mission, supporting objectives, creating a sound business portfolio, and coordinating functional strategies.

92.

CORPORATE LEVEL PLANNING

Retail management should plan which business the retailer should stay in and which new areas to pursue.

Design the retail organisation to withstand shocks.

Adapt the organisation to take advantage of market opportunities.

Define the corporate mission.93.

MISSION STATEMENT

A strategic plan should begin with a mission statement.

A mission statement is a statement of the retail organization’s purpose, what it wants to achieve in the large environment.

It guides people in the retail organization so that they can work independently and yet collectively towards overall organizational goals.

94.

EXAM TYPE QUESTION It is the effective blending of all the elements

of retail marketing mix activities within the retail organization that determines the success of retail marketing management. Discuss this statement and explain with retail examples how the elements of retail marketing mix could be blended to ensure the success of retail operation.

Mastering the process of trying to optimise the retail marketing mix still defies and frustrates most retail managers. Explain why personal guesswork and intuitions are used by retail managers most of the time.

30

TYPES OF RETAILERS

Retailers are classified based on: Amount of service they offer Breadth & depth of product lines Relative prices charged How they are organized

AMOUNT OF SERVICE Self-Service Retailers:

Serve customers who are willing to perform their own “locate-compare-select” process to save money.

Limited-Service Retailers: Provide more sales assistance because they carry

more shopping goods about which customers need information.

Full-Service Retailers: Usually carry more specialty goods for which

customers like to be “waited on.”

PRODUCT LINE CLASSIFICATION Specialty stores Department stores Supermarket Convenience stores Superstores Category killers

RELATIVE PRICES CLASSIFICATION

Discount stores Off-price retailers Factory outlet Independent off-price retailers Warehouse club

ORGANIZATIONAL CLASSIFICATION Chain Stores Voluntary chain Retailer cooperative Franchise Merchandising conglomerates

Retail Final Ppt

Documents

Transcript of Retail Final Ppt