Copyright Cengage Learning 2013 All Rights Reserved 1 Chapter 15: Retailing Designed & Prepared by Laura Rush B-books, Ltd. Introduction to

Copyright Cengage Learning 2013 All Rights Reserved 2 Learning Outcomes Discuss the importance of retailing in the U.S. economy Explain the dimensions by which retailers can be classified Describe the major types of retail operations Discuss nonstore retailing techniques LO 1 LO 2 LO 3 LO 4

Copyright Cengage Learning 2013 All Rights Reserved 3 Learning Outcomes Define franchising and describe its two basic forms List the major tasks involved in developing a retail marketing strategy Describe new developments in retailing LO 5 LO 6 LO 7

4 The Role of Retailing All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use. Copyright Cengage Learning 2013 All Rights Reserved

5 Classification of Retail Operations Ownership Level of Service Product Assortment Price Copyright Cengage Learning 2013 All Rights Reserved

6 Classification of Ownership Independent Retailers Independent Retailers Chain Stores Franchises Owned by a single person or partnership and not part of a larger retail institution Owned and operated as a group by a single organization The right to operate a business or sell a product Copyright Cengage Learning 2013 All Rights Reserved

7 Price Gross Margin - The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted. Copyright Cengage Learning 2013 All Rights Reserved

8 Major Types of Retail Operations Online Department Stores Specialty Stores Supermarkets Drugstores Convenience Stores Discount Stores Restaurants Copyright Cengage Learning 2013 All Rights Reserved

9 Nonstore Retailing Automatic Vending Direct Retailing Direct Marketing M-commerce Copyright Cengage Learning 2013 All Rights Reserved

10 Direct Retailing Online Door-to-Door Office-to-Office Home Sales Parties Home Sales Parties Copyright Cengage Learning 2013 All Rights Reserved

11 Types of Direct Marketing Telemarketing Catalogs & Mail Order Direct Mail M-Commerce Shop-at-home networks Handheld devices Copyright Cengage Learning 2013 All Rights Reserved

12 Basic Forms of Franchising Business Format Franchising Product and Trade Name Franchising Product and Trade Name Franchising Copyright Cengage Learning 2013 All Rights Reserved

13 Franchising Product and Trade Name Franchising- dealer agrees to sell in products provided by a manufacturer or wholesaler. Business Format Franchising- An ongoing business relationship between a franchiser and a franchise. Copyright Cengage Learning 2013 All Rights Reserved

14 Retail Marketing Strategy Develop the “Six Ps” Define & Select a Target Market Copyright Cengage Learning 2013 All Rights Reserved

15 Defining a Target Market STEP 1: Define the Target Market STEP 1: Define the Target Market Demographics Geographics Psychographics Copyright Cengage Learning 2013 All Rights Reserved

16 Choosing the Retailing Mix STEP 2: Choose the Retailing Mix STEP 2: Choose the Retailing Mix Product Price Promotion Place Personnel Presentation Online Copyright Cengage Learning 2013 All Rights Reserved

17 Retail Promotion Strategy Advertising Public Relations Publicity Sales Promotion Copyright Cengage Learning 2013 All Rights Reserved

18 The Proper Location Economic growth potential Competition Geography Choosing a CommunityChoosing a Site Freestanding Store Shopping Center Mall Copyright Cengage Learning 2013 All Rights Reserved

19 Important Factors for Site Choice  Neighborhood socioeconomics  Traffic flows  Land costs  Zoning regulations  Public transportation  Site’s visibility, parking, entrances and exits, accessibility, and safety  Fit with other stores Copyright Cengage Learning 2013 All Rights Reserved

20 Shopping Center and Mall Locations Design attracts shoppers Activities and anchor stores draw customers Ample parking Can target different demographic groups Sharing of common area expenses  Expensive leases  Failure of common promotion efforts  Lease restrictions  Hours of operation  Anchor store domination  Direct competitors AdvantagesDisadvantages Copyright Cengage Learning 2013 All Rights Reserved

21 Retail Prices Quality Image High Price Low Price Good Value Single Price Point EDLP Copyright Cengage Learning 2013 All Rights Reserved

22 Presentation of the Retail Store Atmosphere - The overall impression conveyed by a store’s physical layout, décor, and surroundings. Copyright Cengage Learning 2013 All Rights Reserved

23 Personnel and Customer Service Suggestion Selling Trading Up Two Common Selling Techniques Copyright Cengage Learning 2013 All Rights Reserved

24 New Developments in Retailing Interactivity - Consumers are involved in the retail experience. Pop-up Shops - Temporary retail establishments that provide flexible locations without a long-term commitment. Copyright Cengage Learning 2013 All Rights Reserved