1Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Retailing Prepared by Deborah Baker Texas Christian University Chapter 13

2Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Learning Objectives 1.Discuss the importance of retailing in the U.S. economy. 2. Explain the dimensions by which retailers can be classified. 3. Describe the major types of retail operations.

3Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Learning Objectives (continued) 4. Discuss nonstore retailing techniques. 5. Define franchising and describe its two basic forms. 6. List the major tasks involved in developing a retail marketing strategy.

4Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Learning Objectives (continued) 7. Discuss the challenges of expanding retailing operations into global markets. 8.Describe future trends in retailing.

5Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Learning Objective Discuss the importance of retailing in the U.S. economy. 1 1 On Line On Line

6Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Retailing All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use. 1 1

7Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing The Role of Retailing  Retailing is one of the largest employers  Retailers ring up almost a third of the U.S. GDP  Industry is dominated by a few giant organizations, such as Wal-Mart 1 1

8Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Ten Largest U.S. Retailers 1 1

9Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Learning Objective Explain the dimensions by which retailers can be classified. 2 2

10Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Classification of Retail Operations Classification of Retail Establishments Establishments Ownership Level of Service Product Assortment Price 2 2

11Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Classification of Ownership Independent Retailers Independent Retailers Chain Stores Franchises 2 2

12Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Level of Service Full Service Self Service Discount stores Exclusive stores Factory outlets Warehouse clubs Factory outlets Warehouse clubs 2 2

13Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Types of Stores and Their Characteristics Type of Retailer Department Store Specialty Store Supermarket Convenience Store Drugstore Full-line Discounter Specialty Discounter Warehouse Clubs Off-price Retailer Restaurant ServiceLevelServiceLevel Mod Hi-High High Low Low-Mod Mod-Low Low Low-High Assort-mentAssort-mentPricePrice Gross Margin Broad Narrow Broad Med-Narrow Medium Med-Broad Broad Med-Narrow Mod-High Moderate Mod High Moderate Mod Low Mod Lo-low Low-lower Low Low-High Mod High High Low Mod High Low Mod Low Low Low-High 2 2

14Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Gross Margin The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted. 2 2

15Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Learning Objective Describe the major types of retail operations. 3 3

16Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Major Types of Retail Operations Department Stores Specialty Stores Supermarkets Drugstores Convenience Stores Discount Stores Restaurants 3 3 On Line On Line

17Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Categories of Discount Stores Full-Line Discounters Discount Specialty Stores Warehouse Clubs Off-Price Discount Retailers 3 3

18Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Mass Merchandising Retailing strategy using moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products. 3 3

19Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Hypermarket and Supercenter Hypermarket A large retail store combining a supermarket and a full-line discount store. Supercenter Retail store combining groceries and general merchandise goods with a wide range of services. 3 3

20Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Learning Objective Discuss nonstore retailing techniques. 4 4

21Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Nonstore Retailing Major Forms of Nonstore Retailing Major Forms of Nonstore Retailing Automatic Vending Direct Retailing Direct Marketing Electronic Retailing 4 4

22Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Direct Retailing Door-to-Door Office-to- Office Home Sales Parties Home Sales Parties Direct Retailers sell products: Direct Retailers sell products: 4 4

23Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing On Line On Line Direct Marketing Telemarketing Catalogs & Mail Order Direct Mail Typesof Direct Marketing Typesof Electronic Retailing 4 4

24Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Electronic Retailing On-Line Retailing Shop-at-Home Networks Types of ElectronicRetailing ElectronicRetailing 4 4 On Line On Line

25Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Learning Objective Define franchising and describe its two basic forms. 5 5

26Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Basic Forms of Franchising Business Format Franchising Product and Trade Name Franchising Product and Trade Name Franchising Basic Forms of Franchising Franchising 5 5 On Line On Line

27Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Largest U.S. Franchisers 5 5

28Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Basic Forms of Franchising Product and Trade Name Franchising Business Format Franchising Business Format Franchising Dealer agrees to sell certain products provided by a manufacturer or wholesaler. An ongoing business relationship between a franchiser and a franchisee. An ongoing business relationship between a franchiser and a franchisee. 5 5

29Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Learning Objective List the major tasks involved in developing a retail marketing strategy. 6 6

30Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Retail Marketing Strategy Develop the “Six Ps” Define & Select a Target Market Key Tasks in Strategic Retailing Key Tasks in Strategic Retailing 6 6

31Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Defining a Target Market STEP 1: Segment the Market STEP 1: Segment the Market Demographics Geographics Psychographics 6 6

32Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Choosing the Retailing Mix STEP 2: Choose the Retailing Mix STEP 2: Choose the Retailing Mix Product Price Promotion Place Personnel Presentation 6 6

33Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing The Retailing Mix Target Market Product Price Promotion Place Personnel Presentation 6 6

34Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Product Offering The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix. 6 6 On Line On Line

35Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Retail Promotion Strategy RetailPromotionStrategyRetailPromotionStrategy Advertising Public Relations Publicity Sales Promotion 6 6

36Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Factors to Consider in Site Selection Economic growth potential Area competition Geography 6 6

37Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Location Decisions Freestanding Store Shopping Center Tenant Mall Tenant 6 6 On Line On Line

38Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Shopping Center and Mall Locations Advantages  Design attracts shoppers  Activities and anchor stores draw customers  Ample parking  Unified image Disadvantages  Expensive leases  Failure of common promotion efforts  Lease restrictions  Anchor store domination  Direct competitors 6 6

39Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Price Quality Image Quality Image High Price Low Price Good Value 6 6

40Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Presentation of the Retail Store Employee Type & Density Merchandise Type & Density Fixture Type & Density Sound Odors Visual Factors FactorsinCreatingStore’sAtmosphereFactorsinCreatingStore’sAtmosphere 6 6

41Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Personnel and Customer Service Suggestive Selling Trading Up Two Common Selling Techniques Two Common Selling Techniques 6 6

42Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Customer Service for On-Line Retailers Easy-to-use Web Site Product Availability Simple Returns 6 6

43Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Learning Objective Discuss the challenges of expanding retailing operations into global markets. 7 7

44Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing The Top Ten Global Retailers 7 7

45Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Global Retailing Spread of communication and mass media Lowering of trade barriers and tariffs Growth potential in underserved markets Reasons for Global Expansion 7 7

46Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Factors Used to Analyze Global Retail Markets Market Size & Economics Infrastructure & Distribution Competition Operations Financial & Tax Reporting Merchandise Acceptability Partnering Capability 7 7

47Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Global Retailing Prerequisites for Going Global 7 7 On Line On Line Secure Domestic Position Secure Domestic Position Long-Term Perspective ConsistentGlobal and Corporate Strategies ConsistentGlobal and Corporate Strategies

48Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Learning Objective Describe future trends in retailing. 8 8

49Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Trends in Retailing Entertainment Convenience and Efficiency Customer Management 8 8

50Chap. 13 Marketing 7e Lamb Hair McDaniel ©2004 South-Western College Publishing Customer Management Strategies Customer Relationship Marketing Loyalty Programs Loyalty Programs Clienteling 8 8