1. © 2002 Pearson Education Canada Inc. 12-1 principles of MARKETING Chapter 12 Retailing

2. © 2002 Pearson Education Canada Inc. 12-2 Lecture Overview Roles in the distribution channel Major types of retailers Marketing decisions facing retailers

3. © 2002 Pearson Education Canada Inc. 12-3 Opening Case: Roots Canada Successful Retailer –Anticipating consumers’ wants –Creating value –Creating lifestyle Success hinged on powerful brand –Roots was able to successfully (?) extend its brand Additional requirements –Resources –Commitment –Entrepreneurialism (risk taking)

4. © 2002 Pearson Education Canada Inc. 12-4 Retailing All activities involved in selling goods or services directly to final consumers for their personal, non- business use –Most via retail stores –Non-store growing fast

5. © 2002 Pearson Education Canada Inc. 12-5 Store Retailing Classifications Amount of ServiceProduct LineRelative PricesRetail Organizations

6. © 2002 Pearson Education Canada Inc. 12-6 Store Retailing Classifications: Amount of Service Self-service retailers –Basis of all discount operations Limited-service retailers –Assist with information –Shopping goods Full-service retailers –Customers waited on –More specialty goods

7. © 2002 Pearson Education Canada Inc. 12-7 Store Retailing Classifications: Product Line Specialty stores Department stores Supermarkets –Scrambled merchandising Convenience stores Superstores –Category killers (e.g., Home Depot) –Hypermarkets (e.g., Superstore) Service retailers

8. © 2002 Pearson Education Canada Inc. 12-8 Store Retailing Classifications: Relative Prices Discount stores Off-price retailers –Factory outlets –Independents –Warehouse clubs Wholesale clubs Membership warehouses

9. © 2002 Pearson Education Canada Inc. 12-9 Fig. 12-1: Major Types of Retailers TypeExample Specialty StoreBody Shop, The Gap Department StoreSears, The Bay SupermarketsSafeway, IGA Convenience StoresMac’s 7-Eleven Super StoresWal-Mart, SuperStore Discount StoresWal-Mart, Zellers, Future Shop Off-Price Retailers Independent Off-Price Winners Factory Outlets Dansk, Liz Claiborne, Roots Warehouse Sam’s Club, Price Club, CostCo.

10. © 2002 Pearson Education Canada Inc. 12-10 Store Retailing Classifications: Retail Organizations TypeDescriptionExamples Corporate Chain Stores Voluntary Chains Retailer Co-ops Commonly owned and controlled Central buying and merchandising Similar lines of merchandise Wholesaler sponsored Independently owned, common buying and merchandising Independent retailers Central buying Joint promotion efforts La Senza Sports Experts Loblaws IGA Western Auto True Value Calgary Group Co-op MEC

11. © 2002 Pearson Education Canada Inc. 12-11 Store Retailing Classifications: Retail Organizations TypeDescriptionExamples Franchise Organizations Merchandising conglomerates Contract between a franchiser and franchisee Right to own or operate one or more units Combines several diversified retailing lines Central ownership Some integrated distribution and management McDonald’s Subway, Pizza Hut Jiffy Lube, 7-Eleven Yogen Früz Venator Group (owns Foot Locker, Northern Reflections, Lady Foot Locker, Northern Traditions)

12. © 2002 Pearson Education Canada Inc. 12-12 Retailer Marketing Decisions Retailer strategy Target market Retail store positioning Retailer Marketing mix Product and service assortment Prices Promotion Place (location)

13. © 2002 Pearson Education Canada Inc. 12-13 Retailer Marketing Decisions: Target Market and Positioning Define target markets Select positioning Upscale - midscale - or downscale? Variety? Depth of assortment? Convenience? Low prices?

14. © 2002 Pearson Education Canada Inc. 12-14 Retailer Marketing Decisions: Product Assortment and Services Product assortment –Width and Depth –Quality of goods –Must differentiate Unique product Blockbuster merchandising events Highly targeted

15. © 2002 Pearson Education Canada Inc. 12-15 Retailer Marketing Decisions: Product Assortment and Services Services mix –Key to non-price competition Store atmosphere –Physical layout –Suits target market –Moves customer to buy –“Theatres”

16. © 2002 Pearson Education Canada Inc. 12-16 Retailer Marketing Decisions: Price Decision High markups on lower volume? Lower markups on higher volume? Decide in relation to target market, product and service assortment, and competition

17. © 2002 Pearson Education Canada Inc. 12-17 Retailer Marketing Decisions: Promotion Decision Advertising –Newspaper, magazine radio, TV, ‘Net, circulars, direct-mail –Cooperative advertising Personal selling –Training salespeople to greet, meet, and handle

18. © 2002 Pearson Education Canada Inc. 12-18 Retailer Marketing Decisions: Promotion Decision Sales promotion –In-store demos, displays, contests, celebrities Public relations –Press conferences, speeches, store openings, special events, newsletters, magazines, public service activities

19. © 2002 Pearson Education Canada Inc. 12-19 Retailer Marketing Decisions: Place Decision Location, location, location! = ability to attract customers Facilities a major cost Central business district Shopping centre –Regional –Community –Neighbourhood Power centre

20. © 2002 Pearson Education Canada Inc. 12-20 The Future of Retailing New retail forms and shortening retail life cycles –Wheel of retailing Growth of non-store retailing –Canadian retailers slow to e-tail Not a threat Lack of senior commitment Order fulfillment challenge Lack of resources Measuring performance

21. © 2002 Pearson Education Canada Inc. 12-21 The Future of Retailing Increasing intertype competition Rise of mega-retailers Growing importance of retail technology Retail stores as “communities” or “hangouts”