©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-0 Chapter 18 Offline Retailing and B2C E-Commerce

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-1 Chapter Objectives_1  Define retailing and understand how retailing evolves  Describe how retailers are classified  Understand the importance of store image to a retail positioning strategy and explain how a retailer can create an image in the marketplace

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-2 Chapter Objectives_2  Describe direct selling and automatic vending, two forms of nonstore retailing  Describe B2C e-commerce, its benefits, limitations, and future promise

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-3 Retailing  Final stop on the distribution path  The process by which products are sold to consumers for personal use  Retailers add value with image, inventory, service quality, location, and pricing policies

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-4 The Wheel of Retailing  New types of retailers find it easiest to enter the market by offering goods at lower prices than competitors; after they gain a foothold, they gradually trade up, improving facilities and increasing the quality and assortment of merchandise, and offering special amenities; upscaling increases costs causing prices to rise; higher prices open the door for a new entrant charging lower prices

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-5 Retail Life Cycle  Retailers are also products because they provide benefits and must offer a competitive advantage to survive –Introduction –Growth –Maturity –Decline

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-6 Factors Affecting the Future of Retailing  Demographics  Technology  Globalization

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-7 Major Demographic Factors  Convenience for working women  Catering to specific age segments  Recognizing ethnic diversity

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-8 Classifying Retailers by What They Sell  All retailers are classified by the NAICS codes  Some lines still blurred –scrambled merchandising - strategy of carrying a combination of food and nonfood items

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-9 Classifying Retailers by Level of Service  Self-service retailers  Full-service retailers  Limited-service retailers

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-10 Classifying Retailers by Merchandise Selection  Merchandise breadth –Narrow versus Broad assortments  Merchandise depth –Shallow versus Deep assortments

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-11 Store Types  Convenience stores  Supermarkets  Specialty stores  Department stores  Hypermarket stores  Discount stores –General merchandise discount stores –Off-price retailers –Warehouse clubs –Factory outlet store

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-12 Nonstore Retailing  Any method a firm uses to complete an exchange that does not require a customer visit to a store –Direct selling –Automatic vending

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-13 Direct Selling  Direct selling occurs when a salesperson presents a product to one individual or a small group, takes orders, and delivers the merchandise –Door-to-Door Sales –Parties and Networks party plan systems multilevel pyramid schemes

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-14 Automatic Vending  Appealing for selling convenience goods because of small space required, and minimal personnel to maintain and operate –French fries –Software –Levi’s jeans

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-15 B2C E-Commerce  Online exchange between companies and individual consumers

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-16 E-Commerce and the Customer  Benefits –Shop 24/7 –Less travel –More choices –More information –Price competition –Fast delivery  Limitations –Lack of security –Fraud –Can’t touch items –Hard to distinguish color/ texture online –Expensive to return

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-17 E-Commerce and the Marketer  Benefits –The world is your marketplace –Decreases costs –Very specialized businesses –Real-time pricing –Tracking of consumer behavior  Limitations –Lack of security –Must maintain site –Price competition –Conflicts with conventional retailers –Legal issues not resolved

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-18 Developing a Store Positioning Strategy  Store image  Atmospherics

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-19 Store Design: Setting the Stage  Store layout and traffic flow  Fixture type and merchandise density  The sound of music  Color and lighting  The Actors: Store Personnel  Pricing policy

©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition18-20 Building the Theater: Store Location  Types of Locations  Site Selection –Location planners evaluate trade area and conduct site evaluation