1. Chapter 12 Copyright ©2013 by Cengage Learning Inc. All rights reserved 1 Lamb, Hair, McDaniel CHAPTER 15 Retailing 2012-2013 © Karin Smeds/Gorilla Creative Images/Getty Images

2. 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 Discuss nonstore retailing techniques Learning Outcomes 1 2 3 4 © 2013 by Cengage Learning Inc. All rights reserved 2

3. Define franchising and describe its two basic forms List the major tasks involved in developing a retail marketing strategy Describe new developments in retailing Learning Outcomes 5 6 7 © 2013 by Cengage Learning Inc. All rights reserved 3

4. Discuss the importance of retailing in the U.S. economy The Role of Retailing © 2013 by Cengage Learning Inc. All rights reserved 4 1

5. Retailing All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use. Retailing © 2013 by Cengage Learning Inc. All rights reserved 5 1

6. The Role of Retailing   U.S. retailers employ nearly 25 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 © 2013 by Cengage Learning Inc. All rights reserved 6 1

7. Explain the dimensions by which retailers can be classified Classification of Retail Operations © 2013 by Cengage Learning Inc. All rights reserved 7 2

8. Classification of Retail Operations Ownership Level of Service Product Assortment Price © 2013 by Cengage Learning Inc. All rights reserved 8 2

9. Exhibit 15.1 Types of Stores and Their Characteristics © 2013 by Cengage Learning Inc. All rights reserved Assort- ment Price 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 Service Level Mod Hi-High High Low Low-Mod Mod-Low Low Low-High Department Store Broad Medium Mod-High Moderate Mod High Low Supermarket Drugstore Mod Hi-High Low Low-Mod Department Store

10. 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 to sell a product The right to operate a business or to sell a product Classification of Ownership © 2013 by Cengage Learning Inc. All rights reserved 10 2

11. Level of Service Full Service Self Service © 2013 by Cengage Learning Inc. All rights reserved 11 2

12. Product Assortment BREADTH DEPTH Classification based on BREADTH and DEPTH of product lines. © 2013 by Cengage Learning Inc. All rights reserved 12 2

13. Price The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted. Gross Margin Gross Margin © 2013 by Cengage Learning Inc. All rights reserved 13 2

14. Describe the major types of retail operations Major Types of Retail Operations © 2013 by Cengage Learning Inc. All rights reserved 14 3

15. Major Types of Retail Operations Department Stores Specialty Stores Supermarkets Drugstores Convenience Stores Discount Stores Restaurants © 2013 by Cengage Learning Inc. All rights reserved 15 3

16. Types of Retail Operations Department Store A store housing several departments under one roof. Each department is headed by a buyer, or department head who selects merchandise. A store housing several departments under one roof. Each department is headed by a buyer, or department head who selects merchandise. Specialty Store A retail store specializing in a given type of merchandise. © 2013 by Cengage Learning Inc. All rights reserved 16 3

17. Types of Retail Operations Supermarket Large, departmentalized, self- service retailer. Specializes in food. Some use scrambled merchandising. Drugstore A retail store that stocks pharmacy-related products and services as its main draw. Convenience Store A miniature supermarket, carrying only a limited line of high-turnover convenience goods. © 2013 by Cengage Learning Inc. All rights reserved 17 3

18. Categories of Discount Stores Full-Line Discounters Specialty Discount Stores Warehouse Clubs Off-Price Retailers © 2013 by Cengage Learning Inc. All rights reserved 18 3

19. Discount Stores Full-line discount store A retailer that offers consumers very limited service and carries a broad assortment of well-known, nationally branded “hard goods”. © 2013 by Cengage Learning Inc. All rights reserved 19 3

20. Discount Stores Mass Merchandising A retailing strategy using moderate to low prices on large quantities of merchandise and lower levels of service to stimulate high turnover of products. Supercenter Retail store that combines groceries and general merchandise goods with a wide range of services. © 2013 by Cengage Learning Inc. All rights reserved 20 3

21. Discount Stores a retail store that offers a nearly complete selection of single-line merchandise and uses self-service, discount prices, high volume, and high turnover. a specialty discount store that heavily dominate their merchandise segment. © 2013 by Cengage Learning Inc. All rights reserved 21 3 A Specialty Discount Store is… A Category Killer is…

22. Discount Stores Warehouse membership clubs Limited-service merchant wholesalers that sell a limited selection of brand name appliances, household items, and groceries on a cash-and- carry basis to members. Off-price retailer A retailer that sells at prices 25 percent or more below traditional department store prices because it pays cash for its store and usually doesn’t ask for return privileges. © 2013 by Cengage Learning Inc. All rights reserved 22 3

23. Restaurants Straddle the line between retail and service establishments Sell tangible products (food, drink) but also services (food prep, food service) Many could be considered specialty retailers © 2013 by Cengage Learning Inc. All rights reserved 23 3

24. Discuss nonstore retailing techniques Nonstore Retailing © 2013 by Cengage Learning Inc. All rights reserved 24 4

25. Nonstore Retailing Automatic Vending Direct Retailing Direct Marketing Electronic Retailing © 2013 by Cengage Learning Inc. All rights reserved 25 4

26. the use of machines to offer goods for sale. Vending is the most pervasive retail business in the United States, with 11.5 MILLION vending machines selling billions or dollars worth of goods annually. © 2013 by Cengage Learning Inc. All rights reserved 26 4 Automatic Vending is…

27. Direct Retailing Door-to-Door Office-to-Office Home Sales Parties © 2013 by Cengage Learning Inc. All rights reserved 27 4

28. Types of Direct Marketing Catalogs and Mail Order Direct Mail Telemarketing Electronic Retailing © 2013 by Cengage Learning Inc. All rights reserved 28 4 Shop-at-Home Networks

29. Top E-Tailers by Sales Volume America's Top Ten Retail Businesses RankCompanyWeb Sales Volume (in billions) 1Amazon.com Inc.$34.2 2Staples Inc.$10.2 3Apple Inc.$5.2 4Dell Inc.$4.8 5Office Depot Inc.$4.1 6Walmart.com$4.0 7Sears$3.1 8Liberty Media (owns QVC)$3.0 9Office Max$2.8 10CDW$2.7 29

30. Define franchising and describe its two basic forms Franchising © 2013 by Cengage Learning Inc. All rights reserved 30 5

31. The Basic Forms of Franchising 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. © 2013 by Cengage Learning Inc. All rights reserved 31 5

32. Top 10 Franchisors 1.Subway 2.McDonald’s 3.7-Eleven Inc. 4.Hampton Inn/Hampton Inn & Suites 5.Supercuts 6.H & R Block 7.Dunkin’ Donuts 8.Jani-King 9.Servpro 10. ampm © 2013 by Cengage Learning Inc. All rights reserved 32 5

33. List the major tasks involved in developing a retail marketing strategy Retail Marketing Strategy © 2013 by Cengage Learning Inc. All rights reserved 33 6

34. Retail Marketing Strategy Develop a Retailing Mix Define & Select a Target Market © 2013 by Cengage Learning Inc. All rights reserved 34 6

35. Defining a Target Market STEP 1: Segment the Market STEP 1: Segment the Market Demographics Geographics Psychographics © 2013 by Cengage Learning Inc. All rights reserved 35 6

36. Choosing the Retailing Mix STEP 2: Choose the Retailing Mix STEP 2: Choose the Retailing Mix Product Promotion Personnel Place Price Presentation © 2013 by Cengage Learning Inc. All rights reserved 36 6

37. Exhibit 15.3 The Retailing Mix © 2013 by Cengage Learning Inc. All rights reserved 37

38. Choosing the Retailing Mix Product Offering Product Offering The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix. © 2013 by Cengage Learning Inc. All rights reserved 38 6

39. Retail Promotion Strategy Public Relations Publicity Sales Promotion Advertising © 2013 by Cengage Learning Inc. All rights reserved 39 6

40. The Proper Location Economic growth potential Competition Geography Choosing a Community © 2013 by Cengage Learning Inc. All rights reserved 40 6

41. The Proper Location Socioeconomic characteristics Traffic flows Land costs Choosing a Specific Site Zoning Regulations Public Transportation Choosing the Type of Site Freestanding Store Shopping Center Mall © 2013 by Cengage Learning Inc. All rights reserved 41 6

42. Mall Stores Try to Shrink Traditional mall retailers like Gap and AnnTaylor are trying to restructure the size of their mall stores. Sales per square foot have sunk in recent years. By shrinking the store size, retailers hope to provide a more intimate shopping experience while maximizing store efficiency. Source: Elizabeth Holmes, "Sizing Up Property, Mall Stores Try to Shrink," March 19, 2010, B1. © 2013 by Cengage Learning Inc. All rights reserved 42

43. Retail Prices Quality Image High Price Low Price Good Value Single Price Point © 2013 by Cengage Learning Inc. All rights reserved 43 6

44. Presentation of the Retail Store Atmosphere The overall impression conveyed by a store’s physical layout, décor, and surroundings © 2013 by Cengage Learning Inc. All rights reserved 44 6

45. Presentation of the Retail Store Employee type and density Fixture type and density Sound Odors Visual factors Merchandise type and density © 2013 by Cengage Learning Inc. All rights reserved 45 6

46. Personnel and Customer Service Suggestion Selling Trading Up Two Common Selling Techniques © 2013 by Cengage Learning Inc. All rights reserved 46 6

47. Customer Service for On-Line Retailers Easy-to-use Web site Product availability Simple returns © 2013 by Cengage Learning Inc. All rights reserved 47 6

48. Describe new developments in retailing New Developments in Retailing © 2013 by Cengage Learning Inc. All rights reserved 48 7

49. New Developments in Retailing Interactivity Consumers are involved in the retail experience. Consumers are involved in the retail experience. M-commerce Purchasing goods through mobile devices. © 2013 by Cengage Learning Inc. All rights reserved 49 7

50. Chapter 15 Video Sephora - Retailing As you watch the video, notice what other retailing methods Sephora uses to promote sales. http://www.cengage.com/marketing/book_co ntent/9781133190110_lamb/videos/ch15.html © 2013 by Cengage Learning Inc. All rights reserved 50

51. Part 4 Video Distribution Decisions Watch the video on White Rock. What are some of the key distribution decisions the company has to make to maintain their marketing channels? http://www.cengage.com/marketing/book_cont ent/1439039429_lamb/part_videos/part04.html © 2013 by Cengage Learning Inc. All rights reserved 51