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Copyright Cengage Learning 2013
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1
Chapter 15: Retailing
Designed & Prepared by Laura RushB-books, Ltd.
Introduction to
Copyright Cengage Learning 2013
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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
Discuss nonstore retailing techniques
LO1
LO2
LO3
LO4
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3
Learning Outcomes
Define franchising and describe its two basic forms
List the major tasks involved in developing a retail marketing strategy
Describe new developments in retailing
LO5
LO6
LO7
4
The Role of Retailing
All the activities directly related to the sale of goods and services
to the ultimate consumer for personal, non-business use.
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Classification of Retail Operations
OwnershipOwnership
Level of ServiceLevel of Service
Product AssortmentProduct Assortment
PricePrice
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Classification of Ownership
IndependentRetailers
IndependentRetailers
Chain StoresChain Stores
FranchisesFranchises
Owned by a single person or partnership and not part of a larger retail institution
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
Owned and operated as a group by a single organization
The right to operate a business or sell a productThe right to operate a business or sell a product
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Price
Gross Margin - The amount of money the
retailer makes as a percentage of sales
after the cost of goods sold is subtracted.
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Major Types of Retail Operations
Online
http://www.walgreens.com
Department StoresDepartment Stores
Specialty StoresSpecialty Stores
SupermarketsSupermarkets
DrugstoresDrugstores
Convenience StoresConvenience Stores
Discount StoresDiscount Stores
RestaurantsRestaurants
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Nonstore Retailing
Automatic VendingAutomatic Vending
Direct RetailingDirect Retailing
Direct MarketingDirect Marketing
M-commerceM-commerce
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Direct Retailing
Online
http://www.avon.com
Door-to-DoorDoor-to-Door
Office-to-OfficeOffice-to-Office
Home SalesParties
Home SalesParties
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Types of Direct Marketing
TelemarketingTelemarketing
Catalogs & Mail OrderCatalogs & Mail Order
Direct MailDirect Mail
M-CommerceM-Commerce Shop-at-home networksHandheld devices
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Basic Forms of Franchising
Business FormatFranchising
Business FormatFranchising
Product and Trade Name Franchising
Product and Trade Name Franchising
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Franchising
Product and Trade Name Franchising-dealer agrees to sell in products
provided by a manufacturer orwholesaler.
Business Format Franchising- Anongoing business relationship between
a franchiser and a franchise.
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14
Retail Marketing Strategy
Develop the “Six Ps”
Define & Select a Target Market
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Defining a Target Market
STEP 1:Define the
Target Market
STEP 1:Define the
Target Market
DemographicsDemographics
GeographicsGeographics
PsychographicsPsychographics
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Choosing the Retailing Mix
STEP 2:Choose the Retailing Mix
STEP 2:Choose the Retailing Mix
ProductProduct
PricePrice
PromotionPromotion
PlacePlace
PersonnelPersonnel
PresentationPresentation
Onlinehttp://www.publix.com
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Retail Promotion Strategy
AdvertisingAdvertising
Public RelationsPublic Relations
PublicityPublicity
Sales PromotionSales Promotion
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18
The Proper Location
Economic growth potential
Economic growth potential
CompetitionCompetition
GeographyGeography
Choosing a Community Choosing a Site
Freestanding StoreFreestanding Store
Shopping CenterShopping Center
MallMall
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Important Factors for Site Choice
Neighborhood socioeconomics
Traffic flows
Land costs
Zoning regulations
Public transportation
Site’s visibility, parking, entrances and exits, accessibility, and safety
Fit with other stores
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Shopping Center and Mall Locations
• Design attracts shoppers
• Activities and anchor stores draw customers
• Ample parking
• Can target different demographic groups
• Sharing of common area expenses
Expensive leases
Failure of common promotion efforts
Lease restrictions
Hours of operation
Anchor store domination
Direct competitors
Advantages Disadvantages
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21
Retail Prices
QualityImage
High PriceHigh Price Low Price Low Price
Good ValueSingle Price Point
EDLP
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Presentation of the Retail Store
Atmosphere - The overall
impression conveyed by a
store’s physical layout, décor,
and surroundings.
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Personnel and Customer Service
Suggestion SellingSuggestion Selling
Trading UpTrading UpTwo Common Two Common
SellingSellingTechniquesTechniques
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