1. 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved Designed by Eric Brengle B-books, Ltd. CHAPTER 15 Retailing Prepared by Amit Shah Frostburg State University Marketing Lamb, Hair, McDaniel 10

2. Copyright ©2009 by Cengage Learning Inc. All rights reserved The Role of Retailing 2 LO I All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use. Retailing

3. Copyright ©2009 by Cengage Learning Inc. All rights reserved The Role of Retailing 3 LO I  Over 1.6 million U.S. retailers employ more than 24 million people  Retailers account for 11.6 percent of U.S. employment  Retailing accounts for 13 percent of U.S. businesses  Retailers ring up almost $4 trillion in sales--nearly 40 percent of the U.S. GDP  Industry is dominated by a few giant organizations, such as Wal-Mart

4. Copyright ©2009 by Cengage Learning Inc. All rights reserved Classification of Retail Operations 4 LO 2 Ownership Level of Service Product Assortment Price

5. Copyright ©2009 by Cengage Learning Inc. All rights reserved Classification of Ownership 5 LO 2 Independent Retailers Independent Retailers Chain Stores Franchises Owned by a single person or partnership and not part of a larger retail institution Owned and operated as a group by a single organization The right to operate a business or sell a product

6. Copyright ©2009 by Cengage Learning Inc. All rights reserved Level of Service 6 LO 2 Full Service Self Service Discount storesExclusive storesFactory outlets Warehouse clubs

7. Copyright ©2009 by Cengage Learning Inc. All rights reserved Product Assortment 7 LO 2 Assort-mentPrice Gross Margin Broad Narrow Broad Med-Narrow Medium Med-Broad Broad Med-Narrow Narrow Mod-High Moderate Mod High Moderate Mod Low Mod Lo-low Low-very low Low Low-High Mod High High Low Mod High Low Mod Low Low Low-High Type of Retailer Specialty Store Supermarket Convenience Store Drugstore Full-line Discounter Specialty Discounter Warehouse Clubs Off-price Retailer Restaurant ServiceLevel Mod Hi-High High Low Low-Mod Mod-Low Low Low-High Department Store

8. Copyright ©2009 by Cengage Learning Inc. All rights reserved Price 8 LO 2 Gross Margin Gross Margin The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted.

9. Copyright ©2009 by Cengage Learning Inc. All rights reserved Major Types of Retail Operations 9 LO 3 Online http://www.walgreens.com Department Stores Specialty Stores Supermarkets Drugstores Convenience Stores Discount Stores Restaurants

10. Copyright ©2009 by Cengage Learning Inc. All rights reserved Discount Stores 10 LO 3 Mass Merchandising Retailing strategy using moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products.

11. Copyright ©2009 by Cengage Learning Inc. All rights reserved Discount Stores 11 LO 3 Supercenter Retail store combining groceries and general merchandise goods with a wide range of services. Extreme-value Retailing Extreme-value Retailing Smaller stores emphasizing daily necessities at rock-bottom prices.

12. Copyright ©2009 by Cengage Learning Inc. All rights reserved Specialty Discount Stores 12 LO 3 Category Killers Specialty discount stores that heavily dominate their narrow merchandise segment.

13. Copyright ©2009 by Cengage Learning Inc. All rights reserved Nonstore Retailing 13 LO 4 Automatic Vending Direct Retailing Direct Marketing Electronic Retailing

14. Copyright ©2009 by Cengage Learning Inc. All rights reserved Direct Retailing 14 LO 4 Online http://www.avon.com Door-to-Door Office-to-Office Home Sales Parties Home Sales Parties

15. Copyright ©2009 by Cengage Learning Inc. All rights reserved Types of Direct Marketing 15 LO 4 Telemarketing Catalogs & Mail Order Direct Mail Electronic Retailing Shop-at-home networks On-line retailing

16. Copyright ©2009 by Cengage Learning Inc. All rights reserved Retail Marketing Strategy 16 LO 6 Develop the “Six Ps” Define & Select a Target Market

17. Copyright ©2009 by Cengage Learning Inc. All rights reserved Defining a Target Market 17 LO 6 STEP 1: Segment the Market STEP 1: Segment the Market Demographics Geographics Psychographics

18. Copyright ©2009 by Cengage Learning Inc. All rights reserved Choosing the Retailing Mix 18 LO 6 STEP 2: Choose the Retailing Mix STEP 2: Choose the Retailing Mix Product Price Promotion Place Personnel Presentation Online http://www.publix.com

19. Copyright ©2009 by Cengage Learning Inc. All rights reserved Important Factors for Site Choice 19 LO 6  Neighborhood socioeconomics  Traffic flows  Land costs  Zoning regulations  Public transportation  Site’s visibility, parking, entrances and exits, accessibility, and safety  Fit with other stores

20. Copyright ©2009 by Cengage Learning Inc. All rights reserved Presentation of the Retail Store 20 LO 6 Employee type and density Merchandise type and density Fixture type and density Sound Odors Visual factors Online http://www.apple.com