1. Insert Chapter Picture Here Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 1 Designed by Eric Brengle B-books, Ltd. CHAPTER 13 Retailing Prepared by Deborah Baker Texas Christian University Marketing Lamb, Hair, McDaniel 9

2. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 2 Learning Outcomes Discuss the importance of retailing in the U.S. economy Explain the dimensions by which retailers can be classified Describe the major types of retail operations LO I LO 2 LO 3

3. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 3 Learning Outcomes Discuss nonstore retailing techniques Define franchising and describe its two basic forms List the major tasks involved in developing a retail marketing strategy Describe new developments in retailing LO 5 LO 6 LO 7 LO 4

4. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 4 Discuss the importance of retailing in the U.S. economy The Role of Retailing LO I

5. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 5 The Role of Retailing LO I All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use. Retailing

6. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 6 LO I The Role of Retailing  Over 1 million U.S. retailers employ more than 15 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

7. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 7 REVIEW LEARNING OUTCOME The Importance of Retailing LO I 11.6% 13% 40% Retailing as a % of U.S. employment Retailing as a % of U.S. businesses Retailing as a % of GDP

8. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 8 Explain the dimensions by which retailers can be classified Classifying Retailers LO 2

9. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 9 LO 2 Ownership Level of Service Product Assortment Price Classification of Retail Operations

10. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 10 LO 2 Classification of Ownership 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

11. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 11 LO 2 Full Service Self Service Discount storesExclusive storesFactory outlets Warehouse clubs Level of Service

12. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 12 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 Types of Stores and Their Characteristics

13. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 13 LO 2 Gross Margin Gross Margin Price The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted.

14. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 14 Describe the major types of retail operations Major Types of Retail Operations LO 3

15. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 15 LO 3 Major Types of Retail Operations Online http://www.walgreens.com Department Stores Specialty Stores Supermarkets Drugstores Convenience Stores Discount Stores Restaurants

16. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 16 LO 3 Full-Line Discounters Specialty Discount Stores Warehouse Clubs Off-Price Discount Retailers Categories of Discount Stores

17. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 17 LO 3 Mass Merchandising Discount Stores Retailing strategy using moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products.

18. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 18 LO 3 Discount Stores 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.

19. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 19 LO 3 Category Killers Specialty Discount Stores Specialty discount stores that heavily dominate their narrow merchandise segment.

20. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 20 REVIEW LEARNING OUTCOME Types of Retail Operations LO 3 Department Stores Specialty Stores Supermarket Drugstores Convenience Stores Discount Stores Restaurants Scrambled Merchandising Full-line Specialty Warehouse Off-price supercenter extreme- value category killer factory outlet

21. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 21 Discuss nonstore retailing techniques Nonstore Retailing LO 4

22. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 22 LO 4 Automatic Vending Direct Retailing Direct Marketing Electronic Retailing Nonstore Retailing

23. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 23 LO 4 Online http://www.avon.com Door-to-Door Office-to-Office Home Sales Parties Home Sales Parties Direct Retailing

24. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 24 LO 4 Telemarketing Catalogs & Mail Order Direct Mail Electronic Retailing Types of Direct Marketing Shop-at-home networks On-line retailing

25. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 25 REVIEW LEARNING OUTCOME Nonstore Retailing Techniques LO 4 Vending Direct retailing Direct marketing Electronic retailing direct mail catalogs telemarketing online shop at home Nonstore Retailing

26. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 26 Define franchising and describe its two basic forms Franchising LO 5

27. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 27 LO 5 Business Format Franchising Product and Trade Name Franchising Product and Trade Name Franchising Basic Forms of Franchising

28. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 28 LO 5 Product and Trade Name Franchising Dealer agrees to sell in products provided by a manufacturer or wholesaler. Business Format Franchising Business Format Franchising An ongoing business relationship between a franchiser and a franchisee. Franchising

29. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 29 Largest U.S. Franchisors LO 5 SOURCE: http://www.franchise.org, January 2006.http://www.franchise.org McDonald’s Southland Subway Burger King KFC Pizza Hut RadioShack Taco Bell Dairy Queen Hooter’s Jason’s Deli Marble Slab Quiznos Sub

30. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 30 List the major tasks involved in developing a retail marketing strategy Retail Marketing Strategy LO 6

31. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 31 LO 6 Retail Marketing Strategy Develop the “Six Ps” Define & Select a Target Market

32. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 32 LO 6 STEP 1: Segment the Market STEP 1: Segment the Market Demographics Geographics Psychographics Defining a Target Market

33. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 Biz Flix Man’s Favorite Sport 33 LO 6

34. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 34 LO 6 STEP 2: Choose the Retailing Mix STEP 2: Choose the Retailing Mix Product Price Promotion Place Personnel Presentation Choosing the Retailing Mix Online http://www.publix.com

35. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 35 LO 6 Target Market Product Price Place Promotion Personnel Presentation The Retailing Mix

36. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 36 LO 6 Product Offering Product Offering Choosing the Retailing Mix The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix.

37. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 37 LO 6 Advertising Public Relations Publicity Sales Promotion Retail Promotion Strategy

38. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 38 LO 6 The Proper Location Economic growth potential Competition Geography Choosing a Community Choosing a Site Freestanding Store Shopping Center Mall

39. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 39 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 Important Factors for Site Choice

40. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 40 LO 6 Shopping Center and Mall Locations  Design attracts shoppers  Activities and anchor stores draw customers  Ample parking  Unified image  Sharing of common area expenses  Expensive leases  Failure of common promotion efforts  Lease restrictions  Hours of operation  Anchor store domination  Direct competitors  Consumer time limits AdvantagesDisadvantages

41. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 41 LO 6 Retail Prices Quality Image High Price Low Price Good Value Single Price Point EDLP

42. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 42 Atmosphere LO 6 Presentation of the Retail Store The overall impression conveyed by a store’s physical layout, décor, and surroundings

43. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 43 LO 6 Presentation of the Retail Store Employee type and density Merchandise type and density Fixture type and density Sound Odors Visual factors Online http://www.apple.com

44. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 44 LO 6 Increase market share among existing customers Create new products for present markets Suggestion Selling Trading Up Two Common Selling Techniques Personnel and Customer Service

45. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 45 LO 6 Easy-to-use Web site Product availability Simple returns Customer Service for On-Line Retailers

46. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 46 REVIEW LEARNING OUTCOME Developing a Retail Marketing Strategy LO 6

47. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 47 Describe new developments in retailing New Developments in Retailing LO 7

48. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 13 48 LO 7 Interactivity Consumers are involved in the retail experience. M-commerce Purchasing goods through mobile devices. New Developments in Retailing