Slide 17-1

CHAPTER RETAILING Slide 17-2

AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: Identify retailers in terms of the utilities they provide. Explain the alternative ways to classify retail outlets. Describe the many methods of nonstore retailing. Slide 17-3

AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: Classify retailers in terms of the retail positioning matrix. Develop retailing mix strategies over the life cycle of a retail store. Slide 17-4

TRADING UP…AT TARGET! Slide 17-5

Consumer Utilities Offered by Retailing THE VALUE OF RETAILING Retailing Consumer Utilities Offered by Retailing The Global Impact of Retailing Slide 17-6

FIGURE 17-1 Which company best represents which utilities? Slide 17-7

FIGURE 17-2 Retail sales ($billions), by type of business Slide 17-8

Polo What consumer utility is offered? Slide 17-9

CLASSIFYING RETAIL OUTLETS Form of Ownership Independent Retailer Corporate Chain Contractual Systems Business-Format Franchises Product-Distribution Franchises Slide 17-13

Say Good-Bye to Bar Codes! MARKETING NEWSNET Say Good-Bye to Bar Codes! Slide 17-14

Radio Shack What form of retail ownership? Slide 17-15

FIGURE 17-3 The top five franchises in the United States Slide 17-16

CLASSIFYING RETAIL OUTLETS Level of Service Self-Service Limited Service Full-Service Slide 17-17

CLASSIFYING RETAIL OUTLETS Type of Merchandise Line Depth of Product Line Specialty Outlets Category Killers Slide 17-18

FIGURE 17-4 Breadth versus depth of merchandise lines Slide 17-19

CLASSIFYING RETAIL OUTLETS Merchandise Line Breadth of Product Line General Merchandise Stores Scrambled Merchandising Hypermarket Supercenter Intertype Competition Slide 17-20

FIGURE 17-5 Differences between hypermarkets and supercenters Slide 17-21

Direct Mail and Catalogs NONSTORE RETAILING Automatic Vending Direct Mail and Catalogs Television Home Shopping Online Retailing Telemarketing Do-Not-Call Registry Direct Selling Slide 17-25

FIGURE 17-6 Forms of nonstore retailing Slide 17-26

Coke Vending Machine What are the strengths and weaknesses of this form of nonstore retailing? Slide 17-27

Specialty Catalogs What are the strengths and weaknesses of this form of nonstore retailing? Sears Lilly’s Kids L.L. Bean Slide 17-28

QVC Television Home Shopping What are the strengths and weaknesses of this form of nonstore retailing? Slide 17-29

Online Retailing What are the strengths and weaknesses of this form of nonstore retailing? Slide 17-30

Internet Cafés What are the strengths and weaknesses of this form of nonstore retailing? Slide 17-32

Positioning a Retail Store RETAILING STRATEGY Positioning a Retail Store Retail Positioning Matrix Breadth of Product Line Value Added Keys to Positioning Slide 17-36

FIGURE 17-7 Elements of a retailing strategy Slide 17-37

FIGURE 17-8 Retail positioning matrix Slide 17-38

FIGURE 17-A Implications of the retailing positioning matrix Slide 17-39

ADVERTISEMENT 17-A Tiffany: A retailer in the high-value added/narrow line quadrant of the retail positioning matrix Slide 17-40

RETAILING STRATEGY Retailing Mix Retail Pricing Markup Markdown Original Markup Markup on Selling Price Markup on Cost Maintained Markup Gross Margin Markdown Slide 17-41

RETAILING STRATEGY Retailing Mix Retail Pricing Everyday Low Pricing Everyday Fair Pricing Prices as Benchmarks or Signposts Slide 17-42

RETAILING STRATEGY Retailing Mix Retail Pricing Shrinkage Off-Price Retailing Warehouse Club Outlet Store Single-Price or Extreme Value Retailers Slide 17-43

ETHICS AND SOCIAL RESPONSIBILITY ALERT Who Takes the Five-Finger Discount? You’ll Be Surprised! Slide 17-44

RETAILING STRATEGY Retailing Mix Store Location Central Business District Regional Shopping Center Anchor Stores Community Shopping Center Strip Location Power Center Carts, Kiosks, and Wall Units Slide 17-45

RETAILING STRATEGY Retailing Mix Retail Communication Merchandise Image Atmosphere or Ambiance Merchandise Category Management Consumer Marketing at Retail (CMAR) Slide 17-47

THE CHANGING NATURE OF RETAILING The Wheel of Retailing The Retail Life Cycle Slide 17-51

FIGURE 17-9 The wheel of retailing Slide 17-52

FIGURE 17-10 The retail life cycle Slide 17-54

FUTURE CHANGES IN RETAILING Multichannel Retailing Multichannel Retailers The Impact of Technology Changing Shopping Behavior Vertical Malls Co-Branding Slide 17-55

VIDEO CASE 17 Mall of America Slide 17-66

1. Why has Mall of America been such a marketing success so far? VIDEO CASE 17 Mall of America 1. Why has Mall of America been such a marketing success so far? Slide 17-67

VIDEO CASE 17 Mall of America 2. What (a) retail and (b) consumer trends have occurred since Mall of America was opened in 1992 that it should consider when making future plans? Slide 17-68

VIDEO CASE 17 Mall of America 3. (a) What criteria should Mall of America use in adding new facilities to its complex? (b) Evaluate (i) retail stores, (ii) entertainment offerings, and (iii) hotels on these criteria. Slide 17-69

VIDEO CASE 17 Mall of America 4. What specific marketing actions would you propose that Mall of America managers take to ensure its continuing success in attracting visitors (a) from the local metropolitan area and (b) from outside of it? Slide 17-70

Retailing Retailing includes all activities involved in selling, renting, and providing goods and services to ultimate consumers for personal, family, or household use. Slide 17-75

Form of Ownership Form of ownership distinguishes retail outlets based on whether individuals, corporate chains, or contractual systems own the outlet. Slide 17-76

Level of Service Level of service is the degree of service provided to the customer and include self-, limited-, and full-service retailers. Slide 17-77

Merchandise Line A merchandise line describes how many different types of products a store carries and in what assortment. Slide 17-78

Depth of Product Line Depth of product line means that the store carries a large assortment of each item. Slide 17-79

Breadth of Product Line Breadth of product line refers to the variety of different items a store carries. Slide 17-80

Scrambled Merchandising Scrambled merchandising involves offering several unrelated product lines in a single store. Slide 17-81

Hypermarket A hypermarket is a large store (more than 200,000 square feet) that offers consumers everything in a single outlet, eliminating the need to shop at more than one location. Slide 17-82

Intertype Competition Intertype competition means there is competition between very dissimilar types of retail outlets. Slide 17-83

Telemarketing Telemarketing involves using the telephone to interact with and sell directly to consumers. Slide 17-84

Retail Positioning Matrix The retail positioning matrix is a matrix that positions retail outlets on two dimensions: breadth of product line and value added. Slide 17-85

Retailing Mix The retailing mix includes the activities related to managing the store and the merchandise in the store, which includes retail pricing, store location, retail communication, and merchandise. Slide 17-86

Shrinkage Shrinkage is the breakage and theft of merchandise by customers and employees. Slide 17-87

Off-Price Retailing Off-price retailing involves selling brand-name merchandise at lower than regular prices. Slide 17-88

Central Business District The central business district is the oldest retail setting, usually located in the community’s downtown area. Slide 17-89

Regional Shopping Centers Regional shopping centers consists of 50 to 150 stores that typically attract customers who live or work within a 5- to 10-mile range, often containing two or three anchor stores. Slide 17-90

Community Shopping Center A community shopping center consists of a retail location that typically has one primary store (usually a department store branch) and often 20 to 40 smaller outlets, serving a population of consumers who are within a 10- to 20-minute drive. Slide 17-91

Strip Location A strip location consists of a cluster of stores to serve people who are within a 5- to 10-minute drive. Slide 17-92

Power Center A power center consists of a huge shopping strip with multiple anchor (or national) stores. Slide 17-93

Category Management Category management is an approach to managing the assortment of merchandise in which a manager is assigned the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other, with the objective of maximizing sales and profits in the category. Slide 17-94

Wheel of Retailing The wheel of retailing is a concept that describes how new forms of retail outlets enter the market. Slide 17-95

Retail Life Cycle The retail life cycle is the process of growth and decline that retail outlets, like products, experience, which consists of the early growth, accelerated development, maturity, and decline stages. Slide 17-96

Multichannel Retailers Multichannel retailers utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs, television, and online retailing. Slide 17-97