1 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12Retailing 12 Canadian Adaptation prepared by Don Hill, Langara College

2 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Learning Objectives 1.Discuss the importance of retailing in the Canadian economy 2.Explain the dimensions by which retailers can be classified 3. Describe the major types of retail operations

3 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 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 7.Describe new developments in retailing

4 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Learning Objective Discuss the importance of retailing in the Canadian economy Online

5 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12Retailing Retailing All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use. 1

6 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 The Role of Retailing  Retailers account for 11.2 percent of Canadian employment  97 percent of Canadian retailers employ fewer than 50 employees  Retailers ring up nearly 30 percent of the Canadian GDP  Industry is dominated by a few giant organizations, such as Loblaws, Wal-Mart 1

7 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Top Ten Largest Canadian Retailers 1

8 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Importance of Retailing to Canada 1

9 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Learning Objective Explain the dimensions by which retailers can be classified 2 2 2

10 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Classification of Retail Operations 2

11 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Classification of Ownership Independent Retailers Independent Retailers Chain Stores Franchises 2

12 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Level of Service Full Service Self Service Discount stores Exclusive stores Factory outlets Warehouse clubs Factory outlets Warehouse clubs 2

13 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 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

14 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Gross Margin The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted. 2

15 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Place of Business Growth of nonstore retailing (3 percent of all retail) Internet Mobile telecommunications Many use both in-store and nonstore 2

16 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Learning Objective Describe the major types of retail operations 3 3 3

17 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Major Types of Retail Operations Department Stores Specialty Stores Supermarkets Drugstores Convenience Stores Discount Stores Restaurants Online 3

18 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Categories of Discount Stores Full-Line Discounters Specialty Discount Stores Warehouse Clubs Off-Price Discount Retailers 3

19 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Mass Merchandising Retailing strategy using moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products. 3

20 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Major Types of In-Store Retailing 3

21 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Learning Objective Discuss nonstore retailing techniques 4 4 4

22 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Nonstore Retailing 4

23 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Direct Retailing 4 Door-to-Door Office-to-Office Home Sales Parties Home Sales Parties Direct Retailers sell products: Direct Retailers sell products:

24 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Online Types of Direct Marketing Telemarketing Catalogues & Mail Order Direct Mail Electronic Retailing 4

25 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Types of Electronic Retailing On-Line Retailing Shop-at-Home Networks Online 4

26 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Learning Objective Define franchising and describe its two basic forms 5 5 5

27 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Basic Forms of Franchising Business Format Franchising Product and Trade Name Franchising Product and Trade Name Franchising Online 5

28 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Ten well Known Canadian Franchisers 5

29 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 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

30 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 5 Basic Forms of Franchising

31 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Learning Objective List the major tasks involved in developing a retail marketing strategy 6 6 6

32 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Retail Marketing Strategy 6 Define & Select a Target Market Develop the “Six Ps”

33 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Defining a Target Market STEP 1: Defining a Target Market STEP 1: Defining a Target Market Demographics Geographics Psychographics 6

34 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Choosing the Retailing Mix STEP 2: Choose the Retailing Mix STEP 2: Choose the Retailing Mix Product Price Promotion Place Personnel Presentation 6

35 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 The Retailing Mix 6

36 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Product Offering Online Product Offering The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix. 6

37 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Retail Promotion Strategy Advertising Public Relations Publicity Sales Promotion 6

38 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Factors to Consider in Site Selection Economic growth potential Area competition Geography 6

39 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Location Decisions Freestanding Store Shopping Center Regional Malls Online 6

40 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Shopping Center and Mall Locations Design attracts shoppers Activities and anchor stores draw customers Ample parking Unified image Expensive leases Failure of common promotion efforts Lease restrictions Anchor store domination Direct competitors 6 AdvantagesDisadvantages

41 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12Price Quality Image Quality Image High Price Low Price Good Value 6

42 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Presentation of the Retail Store Employee type and density Merchandise type and density Fixture type and density Sound Odours Visual factors 6

43 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Personnel and Customer Service Suggestion Selling Trading Up Two Common Selling Techniques Two Common Selling Techniques 6

44 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Customer Service for On-Line Retailers Easy-to-use Web site Product availability Simple returns 6

45 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 Learning Objective Describe new developments in retailing 7 7 7

46 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 12 New Developments in Retailing 7 Interactivity m-Commerce