1. Chapter 13 Retailing

2. Introduction Employs 15 million people in the U.S.
Retailer
An intermediary involved in selling goods and services to ultimate consumers (examples?)
Wholesaler
An intermediary that takes title to the goods it handles and redistributes them to retailers, other distributors, and sometimes end consumers
Employs 15 million people in the U.S.
Accounts for $4.5 trillion to the U.S. economy

3. STRATEGIC IMPLICATIONS: RETAIL MARKETING STRATEGY
A retailer develops a marketing strategy based on the firm’s goals and strategic plans
Two fundamental steps:
Picking a target market: size and profit potential. POSITION.
Developing a retailing mix to satisfy the chosen target market
4Ps + Personnel & Presentation used to create a retail image

4. The Retailing Mix Target Market Product Price Place Promotion
Personnel
Presentation

5. Choosing the Merchandising Mix
The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix.

6. Merchandising (Product) Strategy
Category management: Retailing strategy which views each product category as an individual profit center.
Slotting Allowances: lump-sum payments by manufacturers for stocking new products.
Scrambled Merchandising: Combining dissimilar product lines to boost sales volume.
Growth of Store brands – Battle for shelf space

7. Presentation of the Retail Store - Atmosphere
The overall impression conveyed by a store’s physical layout, décor, and surroundings.
Five Senses.

8. Personnel and Customer Service
Suggestion Selling
Trading Up
Two Common
Selling Techniques

9. Price and payment options : how important?
The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted.
Price and payment options : how important?

10. Classification of Retail by
Ownership (independent, franchise chain)
Service level (Nordstrom vs. Wal-mart)
Assortment (CVS vs. Smith’s)
Price (Tiffany vs. jewelry kiosk)

11. Department Stores (1) General Merchandise retailer:
Variety of product lines with considerable depth.
Dept stores:
mid 1800s
Wide lines -- at least 25 people.
Product lines organized into separate departments.
Service-oriented
Service
Level
Assort-
ment
Price
Gross Margin
High
Broad
High
High

12. Specialty Stores (2) Specialty Stores Assort- ment Price Gross Margin
Narrow
High
Type of Retailer
Specialty Store
Service
Level

13. Specialty Discount Stores (3) OR Category Killers
Assort-
ment
Price
Gross Margin
Narrow
Low
Type of Retailer
Specialty Discount Store
Service
Level
Deep
Assortment

14. Discount Stores (4) Shallow Assortment Discount stores: Self-service.
Brands and store brands at low prices.
Discount
Low Service
Broad
Assortment
Low price
Low margin
Shallow
Assortment

15. Off-Price Retailer (5) Low margins Off-price Retailer Low service
Less wide; but deep.
Low margins
Off-price Retailer
Low service
Narrow Line Prices
Low prices

16. Supercenters (6) Supermarket Low service Broad Moderate prices
Low margins

17. Supermarkets Large, self-service retailer with grocery specialty
Self-scanning trend: what is your take?
Competition: fierce, 1% profit on many items

18. Warehouse Clubs Warehouse club / wholesale club (Sam’s, Costco)
No frills, members only (why?)
Bulk purchases: price competition, homogeneous shopping goods

19. Convenience Stores Convenience products Often with gas stations
Convenience stores: fill-in your “regular” shopping
Competition (fast food also)
24/7 is more important
We pay for the convenience

20. Non-Store Retailing Vending: hi costs; hi prices (flat sales)
Vending is a $40 billion U.S. market
Cashless vending=wave of future
Direct Marketing (Mail, Catalog, Telemarketing)
E-tailing (TV shopping, online)
M-commerce: buy from mobile devices
(e.g., cell phones)

21. Comparison between Discount, Specialty and Specialty Discount
Attribute
Specialty
Specialty Discount
Discount
Example
TCBY Yogurt
Toys R us
Wal-Mart
Service
High
Low
Price
Assortment
Narrow
Broad

22. Comparison between Discount, Specialty and Specialty Discount
Attribute
Specialty
Specialty Discount
Discount
Margin
High
Low

23. Wheel of Retailing
Newer, low-price types of retailing arise to challenge older established “bigger” retailers.

24. Wheel of Retailing 3 4 2 1 Motel Motel New Entrant Motel
+ Free Breakfast + HBO
Motel
+ Free Breakfast + HBO
+ Happy Hour 4 2
New Entrant
Motel
+ Free Breakfast 1
No Frills Motel
a theory to explain the institutional changes

25. eTailing and DTC eTail= electronic retail DTC= Direct to consumer
Shrinking use of wholesalers? (bypassing wholesalers more and more)
eBay: hybrid etailer/online auction site
Even sells services online
(examples of services
on ebay?)

26. eTail More innovative e-tail sites
Printing online
Nike ID
Zappos

27. Future of re[E]tailing