1. McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

2. LO1 Identify retailers in terms of the utilities they provide. Explain the alternative ways to classify retail outlets. LO2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 17, YOU SHOULD BE ABLE TO: Describe the many methods of nonstore retailing. LO3 17-2

3. LO4 Classify retailers in terms of the retail positioning matrix, and specify retailing mix actions. Explain changes in retailing with the wheel of retailing and the retail life cycle concepts. LO5 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 17, YOU SHOULD BE ABLE TO: 17-3

4. RETAILERS ARE REINVENTING THEIR STORES TO MATCH THE WAY YOU WANT TO SHOP! 17-4

5. THE VALUE OF RETAILING LO1  Retailing Retailing  Consumer Utilities Offered by Retailing Place Possession  The Global Economic Impact of Retailing Form Time 17-5

6. FIGURE 17-1 FIGURE 17-1 Which retailer best provides which utilities? 17-6

7. FIGURE 17-2 FIGURE 17-2 The relative size of different types of retailers 17-7

8. CLASSIFYING RETAIL OUTLETS FORM OF OWNERSHIP LO2  Independent Retailer  Form of Ownership Form of Ownership  Corporate Chain Wholesaler-Sponsored Voluntary Chains  Contractual Systems Retailer-Sponsored Cooperatives 17-8

9. CLASSIFYING RETAIL OUTLETS FORM OF OWNERSHIP LO2 Franchising  Contractual Systems  Business-Format Franchises  Product-Distribution Franchises 17-9

10. FIGURE 17-3 FIGURE 17-3 The top five franchises in the United States 17-10

11.  Self-Service CLASSIFYING RETAIL OUTLETS LEVEL OF SERVICE LO2  Limited Service  Full-Service 17-11

12.  Depth of Product Line Depth of Product Line CLASSIFYING RETAIL OUTLETS TYPE OF MERCHANDISE LINE LO2 Specialty Outlets Category Killers 17-12

13. FIGURE 17-4 FIGURE 17-4 Stores vary in terms of the breadth and depth of their merchandise lines 17-13

14.  Breadth of Product Line Breadth of Product Line CLASSIFYING RETAIL OUTLETS TYPE OF MERCHANDISE LINE LO2 General Merchandise Stores Scrambled Merchandising  Hypermarket Hypermarket  Intertype Competition Intertype Competition  Supercenter 17-14

15. FIGURE 17-5 FIGURE 17-5 Hypermarkets are popular in Europe while supercenters are popular in the U.S. 17-15

16. FIGURE 17-6 FIGURE 17-6 Many types of retailers do not have stores 17-16

17. NONSTORE RETAILING LO3  Automatic Vending  Direct Mail and Catalogs 17-17

18. NONSTORE RETAILING LO3  Television Home Shopping  Online Retailing 17-18

19. GOING ONLINE Get Ready for Smack Shopping! 17-19

20. NONSTORE RETAILING LO3  Telemarketing Telemarketing  Direct Selling Do-Not-Call Registry 17-20

21. FIGURE 17-7 FIGURE 17-7 Elements of a retailing strategy 17-21

22. RETAILING STRATEGY POSITIONING A RETAIL STORE LO4  Retail Positioning Matrix Retail Positioning Matrix Breadth of Product Line Value Added 17-22

23. FIGURE 17-8 FIGURE 17-8 The four positioning strategies for retailers 17-23

24. RETAILING STRATEGY RETAILING MIX LO4  Retailing Mix Retailing Mix Original Markup Maintained Markup  Retail Pricing  Markdown Gross Margin 17-24

25. RETAILING STRATEGY RETAILING MIX LO4  Everyday Low Pricing (EDLP)  Everyday Fair Pricing  Benchmark or Signpost Items 17-25

26. RETAILING STRATEGY RETAILING MIX LO4  Off-Price Retailing Off-Price Retailing Warehouse Club Outlet Store Single/One-Price Policy Store 17-26

27. RETAILING STRATEGY RETAILING MIX LO4  Store Location Regional Shopping Centers Central Business District  Anchor Stores Strip Location Community Shopping Center Power Center 17-27

28. RETAILING STRATEGY RETAILING MIX LO4  Retail Communication Atmosphere or Ambiance Image  Merchandise Category Management Metrics  Consumer Marketing at Retail (CMAR) 17-28

29. USING MARKETING DASHBOARDS Why Apple Stores May Be the Best in the United States! Sales per Square Foot ($) and Same Store Growth (%) 17-29

30. THE CHANGING NATURE OF RETAILING THE WHEEL OF RETAILING AND RETAIL LIFE CYCLE LO5  Wheel of Retailing Wheel of Retailing  Retail Life Cycle Retail Life Cycle 17-30

31. FIGURE 17-9 FIGURE 17-9 The wheel of retailing: How outlets change over time 17-31

32. FIGURE 17-10 FIGURE 17-10 The retail life cycle describes the stage of growth and decline for retail outlets 17-32

33. FUTURE CHANGES IN RETAILING LO5  Multichannel Retailers Multichannel Retailers  Managing the Customer Experience 17-33

34. MARKETING MATTERS The Multichannel Marketing Multiplier 17-34

35. MALL OF AMERICA: SHOPPING AND A WHOLE LOT MORE VIDEO CASE 17 17-35

36. VIDEO CASE 17 MALL OF AMERICA 1. Why has Mall of America been such a marketing success so far? 17-36

37. 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? 17-37

38. 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? 17-38

39. 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? 17-39

40. ARE THERE TOO MANY RETAIL STORES? SUPPLEMENTAL LECTURE NOTE 17-1 17-40

41. FRANCHISING OFFERS OPPORTUNITIES AND FINANCIAL, LEGAL, AND CULTURAL CHALLENGES SUPPLEMENTAL LECTURE NOTE 17-2 17-41

42. RETAIL SHOPPING ONLINE: COMPARING PRICES FOR A KODAK DIGITAL PICTURE FRAME IN-CLASS ACTIVITY 17-1 17-42

43. Kodak EasyShare EX1011 Digital Picture Frame 17-43

44. Retailing Retailing consists of all activities involved in selling, renting, and providing goods and services to ultimate consumers for personal, family, or household use. 17-44

45. Form of Ownership Form of ownership distinguishes retail outlets based on whether individuals, corporate chains, or contractual systems own the outlet. 17-45

46. Level of Service Level of service is the degree of service provided to the customer from three types of retailers: self-, limited-, and full-service. 17-46

47. Merchandise Line A merchandise line describes how many different types of products a store carries and in what assortment. 17-47

48. Depth of Product Line Depth of product line means that the store carries a large assortment of each item. 17-48

49. Breadth of Product Line Breadth of product line describes the variety of different items a store carries. 17-49

50. Scrambled Merchandising Scrambled merchandising consists of offering several unrelated product lines in a single store. 17-50

51. Hypermarket A hypermarket is a form of scrambled merchandising, which consists of 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. 17-51

52. Intertype Competition Intertype competition consists of competition between very dissimilar types of retail outlets. 17-52

53. Telemarketing Telemarketing consists of using the telephone to interact with and sell directly to consumers. 17-53

54. Retail Positioning Matrix The retail positioning matrix is a matrix that positions retail outlets on two dimensions: breadth of product line and value added. 17-54

55. Retailing Mix The retailing mix consists of the activities related to managing the store and the merchandise in the store, which includes retail pricing, store location, retail communication, and merchandise. 17-55

56. Off-Price Retailing Off-price retailing consists of selling brand-name merchandise at lower than regular prices. 17-56

57. Central Business District A central business district is the oldest retail setting, usually located in the community’s downtown area. 17-57

58. Regional Shopping Centers Regional shopping centers consist 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. 17-58

59. 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. 17-59

60. Strip Location A strip location consists of a cluster of neighborhood stores to serve people who are within a 5- to 10-minute drive. 17-60

61. Power Center A power center is a huge shopping strip with multiple anchor (or national) stores. 17-61

62. 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. 17-62

63. Wheel of Retailing The wheel of retailing is a concept that describes how new forms of retail outlets enter the market. 17-63

64. Retail Life Cycle The retail life cycle is the process of growth and decline that retail outlets, like products, experience. It consists of the early growth, accelerated development, maturity, and decline stages. 17-64

65. Multichannel Retailers Multichannel retailers are retailers that utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs, television, and online retailing. 17-65