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RETAILING AND WHOLESALING
THE VALUE OF RETAILING
Retailing
Retailing includes all activities involved in
Selling and providing goods and
services to ultimate consumers for personal,
or household use.
ClassificationClassificationof of
Retail Retail EstablishmentsEstablishments
ClassificationClassificationof of
Retail Retail EstablishmentsEstablishments
Ownership-placeOwnership-place
Level of Service-promotionLevel of Service-promotion
Product Assortment-productProduct Assortment-product
PricePrice
Retailers manipulate their 4 P’s to get the best position in the marketplace– in other words, to create a competitive advantage
CLASSIFYING RETAIL OUTLETS
IndependentRetailers-one store
ownership
IndependentRetailers-one store
ownership
Chain Stores-many stores but only one
owner
Chain Stores-many stores but only one
owner
Franchises-many owners of many
stores
Franchises-many owners of many
stores
CLASSIFICATION BY OWNERSHIP
Product and Trade Name Franchising
Product and Trade Name Franchising
BusinessFormat
Franchising
BusinessFormat
Franchising
Dealer agrees to sell certain products provided by a
manufacturer, but can use any sales tactics he chooses.
Ex-Michelin Tires, Avon
Dealer agrees to sell certain products provided by a
manufacturer, but can use any sales tactics he chooses.
Ex-Michelin Tires, Avon
Dealer must sell the franchiser’s product in the exact way the
franchiser prescribes.Ex – McDonalds, Wendy's
Dealer must sell the franchiser’s product in the exact way the
franchiser prescribes.Ex – McDonalds, Wendy's
BASIC FORMS OF FRANCHISING
Full ServiceFull Service Self Service Self Service
Discount storesDiscount stores
Exclusive storesExclusive storesFactory outlets
Warehouse clubsFactory outlets
Warehouse clubs
CLASSIFICATION BY LEVEL OF SERVICE
The mix of products offered to the consumer by the
retailer; also called the product assortment
Deep & narrow-like Starbucks
Or
Shallow & broad like Walmart
CLASSIFICATION BY PRODUCT OFFERING
CLASSIFICATION BY PRODUCT OFFERING
Depth of Product Line
• Specialty Outlets
• Category Killers
Breadth of Product Line
• General Merchandise Stores
• Scrambled Merchandising
Why do this?
Breadth versus depth of merchandise lines
Department StoresDepartment Stores
Specialty StoresSpecialty Stores
SupermarketsSupermarkets
DrugstoresDrugstores
Convenience StoresConvenience Stores
Discount StoresDiscount Stores
RestaurantsRestaurants
MAJOR TYPES OF RETAILERS BY PRODUCT OFFERING
Major FormsMajor Formsofof
NonstoreNonstoreRetailingRetailing
Major FormsMajor Formsofof
NonstoreNonstoreRetailingRetailing
Automatic VendingAutomatic Vending
Direct MarketingDirect Marketing
Electronic RetailingElectronic Retailing
NON-STORE RETAILING
TelemarketingTelemarketing
Catalogs & Mail OrderCatalogs & Mail Order
Direct MailDirect Mail
DirectDirect Marketing needs Marketing needs
no personal no personal interactioninteraction
DirectDirect Marketing needs Marketing needs
no personal no personal interactioninteraction
DIRECT MARKETING
Choosing the Retailing Mix
Choosing the Retailing Mix
ProductProduct
PricePrice
PromotionPromotion
PlacePlace
PersonnelPersonnel
PresentationPresentation
CHOOSING THE RETAIL MIX
TargetTargetMarketMarket
ProductProduct
PricePrice
PromotionPromotion
PlacePlace
PersonnelPersonnel
PresentationPresentation
CHOOSING THE RETAIL MIX
Employee Type & DensityEmployee Type & Density
Merchandise Type & DensityMerchandise Type & Density
Fixture Type & DensityFixture Type & Density
SoundSound
OdorsOdors
Visual FactorsVisual Factors
Factors Factors inin
CreatingCreatingStore’sStore’s
Atmosphere Atmosphere
Factors Factors inin
CreatingCreatingStore’sStore’s
Atmosphere Atmosphere
PRESENTATION (COMMUNICATION) OF THE RETAIL STORE
How manyHow many
How knowledgeableHow knowledgeable
How helpful / invasiveHow helpful / invasive
Fit the image of the productFit the image of the product
Good personal sellersGood personal sellers
Factors Factors inin
Personnel Personnel decisionsdecisions
Factors Factors inin
Personnel Personnel decisionsdecisions
PERSONNEL OF THE RETAIL STORE
RETAILING STRATEGY-PRICING
Use Everyday Low Pricing
Benchmark or Signpost Items – items used by consumers as an index of overall price level of the store I.e. – “How much do they sell T shirts for?”
Allow for Shrinkage and discounting OR
How much mark-up?
RETAILING STRATEGY - LOCATION
Central Business District
Regional Shopping Centers
Strip Location
Multichannel Retailers
• Anchor Stores
Freestanding Store
Freestanding Store
Shopping Center Tenant
Shopping Center Tenant
Mall TenantMall Tenant
• Parasites
• Destination stores
• Power centers
FIGURE 14-5 FIGURE 14-5 The retail life cycle
Scrambled Merchandising
Scrambled merchandising involves offering several unrelated product lines in a single store.
Scrambled merchandising involves offering several unrelated product lines in a single store.
Retailing Mix
The retailing mix includes the activities related to managing the store and the merchandise in the store, which includes retail pricing, store location, retail communication, and merchandise.
The retailing mix includes the activities related to managing the store and the merchandise in the store, which includes retail pricing, store location, retail communication, and merchandise.
Shrinkage
Shrinkage is the breakage and theft of merchandise by customers and employees.
Shrinkage is the breakage and theft of merchandise by customers and employees.
Multichannel Retailers
Multichannel retailers utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs, television, and online retailing.
Multichannel retailers utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs, television, and online retailing.
Retail Life Cycle
The retail life cycle is the process of growth and decline that retail outlets, like products, experience, which consists of the early growth, accelerated development, maturity, and decline stages.
The retail life cycle is the process of growth and decline that retail outlets, like products, experience, which consists of the early growth, accelerated development, maturity, and decline stages.
Parasites
Parasite stores do not create their own traffic. They make money based ontheir proximity to things that will draw foot traffic. (bigger stores, train stations, airports, office buildings, etc.)
Parasite stores do not create their own traffic. They make money based ontheir proximity to things that will draw foot traffic. (bigger stores, train stations, airports, office buildings, etc.)
Destination Stores
Stores that generate customers from larger trading areas than their neighbors or competitors.
i.e.-Dunkin’ Donuts: “It’s worth the trip!”
Stores that generate customers from larger trading areas than their neighbors or competitors.
i.e.-Dunkin’ Donuts: “It’s worth the trip!”
Power Centers
Huge shopping strips with multiple anchors and often a supermarketHuge shopping strips with multiple anchors and often a supermarket
Anchor Stores
A large store, such as a department store or supermarket, that is prominently located in a shopping mall to attract customers who are then expected to patronize the other shops in the mall.
A large store, such as a department store or supermarket, that is prominently located in a shopping mall to attract customers who are then expected to patronize the other shops in the mall.