To Linda; Glenna, Paul, Danielle, Sophie, and Joshua; and Lisa, Ben, Philip, Emily, and Levi
To Linda, Jennifer and Phil, and Stacey and Adam
To Amit; Amal, Bharati, and Parnali; and Trisha and Raaka
Thank you for support and encouragement.
Vice President, Business Publishing: Donna BattistaDirector of Portfolio Management: Stephanie WallPortfolio Manager: Daniel TylmanEditorial Assistant: Linda AlbelliProject Manager, Global Edition: Nitin ShankarAcquisitions Editor, Global Edition: Tahnee WagerSenior Project Editor, Global Edition: Daniel LuizManaging Editor, Global Edition: Steven JacksonManager, Media Production, Global Edition: M. Vikram KumarSenior Manufacturing Controller, Production, Global Edition: Trudy KimberVice President, Product Marketing: Roxanne McCarleyDirector of Strategic Marketing: Brad ParkinsStrategic Marketing Manager: Deborah StricklandProduct Marketer: Becky BrownExecutive Field Marketing Manager: Adam GoldsteinField Marketing Manager: Lenny Ann KucenskiField Marketing Assistant: Kristen ComptonProduct Marketing Assistant: Jessica Quazza
Vice President, Production and Digital Studio, Arts and Business: Etain O’Dea
Director of Production, Business: Jef HolcombManaging Producer, Business: Ashley SantoraContent Producer: Linda AlbelliOperations Specialist: Carol MelvilleCreative Director: Blair BrownManager, Learning Tools: Brian SuretteContent Developer, Learning Tools: Sarah PetersonManaging Producer, Digital Studio, Arts and Business:
Diane LombardoDigital Studio Producer: Darren CormierDigital Studio Producer: Alana ColesFull-Service Project Management and Composition: Nathaniel Jones,
SPi GlobalInterior Design: SPi GlobalCover Design: Lumina Datamatics, Inc.Cover Art: Shutterstock/Creative Lab
Acknowledgments of third-party content appear on page[s] 560–576, which constitute an extension of this copyright page.
Pearson Education LimitedKAO TwoKAO ParkHarlowCM17 9NAUnited Kingdom
and Associated Companies throughout the world
Visit us on the World Wide Web at: www.pearsonglobaleditions.com
© Pearson Education Limited 2018
The rights of Barry Berman, Joel R. Evans and Patrali Chatterjee to be identiied as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
Authorized adaptation from the United States edition, entitled Retail Management: A Strategic Approach, 13th edition, ISBN 978-0-13-379684-1,
by Barry Berman, Joel R. Evans, and Patrali Chatterjee, published by Pearson Education © 2018.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a license permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Safron House, 6–10 Kirby Street, London EC1N 8TS.
All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any ailiation with or endorsement of this book by such owners.
ISBN 10: 1-292-21467-8ISBN 13: 978-1-292-21467-2
British Library Cataloguing-in-Publication DataA catalogue record for this book is available from the British Library.
10 9 8 7 6 5 4 3 2 114 13 12 11 10
Typeset in Palatino LT Pro Roman by SPi Global.
Printed and bound by Vivar, Malaysia.
Retail Management, eBook, Global Edition
Table of Contents
Cover
Title Page
Copyright Page
Brief Contents
Contents
Preface
PART 1 An Overview of Strategic Retail ManagementChapter 1 An Introduction to Retailing
Chapter Objectives
Overview
The Framework of Retailing
Reasons for Studying Retailing
The Special Characteristics of Retailing
The Importance of Developing and Applying a Retail Strategy
The Home Depot Corporation: Successfully Navigating the Omnichannel Landscape
The Retailing Concept
The Focus and Format of the Text
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: blog (www.bermanevansretail.com)
Appendix Understanding the Recent Economic Environment in the United States and
Around the Globe
The Current Economic Situation in the United States
The Impact of the Downturn on Economies Around the World
The Effect of the Current Economic Climate on Retailing
Strategic Options for Retailers
Chapter 2 Building and Sustaining Relationships in RetailingChapter Objectives
Overview
Value and the Value Chain
Retailer Relationships
Customer Relationships
Channel Relationships
The Differences in Relationship Building Between Goods and Service Retailers
Technology and Relationships in Retailing
Electronic Banking
Customer and Supplier Interactions
Ethical Performance and Relationships in Retailing
Table of Contents
Ethics
Social Responsibility
Consumerism
Chapter Summary
Key Terms
Question for Discussion
Web-Based Exercise: Sephora (www.sephora.com)
Appendix Planning for the Unique Aspects of Service Retailing
Abilities Required to be a Successful Service Retailer
Improving the Performance of Service Retailers
The Strategy of Pal’s Sudden Service: Baldrige Award Winner
Chapter 3 Strategic Planning in RetailingChapter Objectives
Overview
Situation Analysis
Organizational Mission
Ownership and Management Alternatives
Goods/Service Category
Personal Abilities
Financial Resources
Time Demands
Objectives
Sales
Profit
Satisfaction of Publics
Image (Positioning)
Selection of Objectives
Identification of Consumer Characteristics and Needs
Overall Strategy
Controllable Variables
Uncontrollable Variables
Integrating Overall Strategy
Specific Activities
Control
Feedback
A Strategic Planning Template For Retail Management
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: Angie’s List (www.angieslist.com)
Appendix The Special Dimensions of Strategic Planning in a Global Retailing
Environment
Opportunities and Threats in Global Retailing
U.S. Retailers in Foreign Markets
Foreign Retailers in the U.S. Market
Table of Contents
Part 1 Short Cases
Case 1: Retailers MUST Be Future-Oriented
Case 2: Stores That Accommodate Those with Physical Limitations
Case 3: Is the Proliferation of Job Titles Helping or Hurting?
Case 4: Competition and Quick Foodservice
Part 1 Comprehensive Case
Ideas Worth Stealing
PART 2 Situation AnalysisChapter 4 Retail Institutions by Ownership
Chapter Objectives
Overview
Retail Institutions Characterized by Ownership
Independent
Chain
Franchising
Leased Department
Vertical Marketing System
Consumer Cooperative
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: 7-Eleven (www.franchise.7-eleven.com)
Appendix The Dynamics of Franchising
Managerial Issues in Franchising
Franchisor–Franchisee Relationships
Chapter 5 Retail Institutions by Store-Based Strategy MixChapter Objectives
Overview
Considerations in Planning a Retail Strategy Mix
The Wheel of Retailing
Scrambled Merchandising
The Retail Life Cycle
How Retail Institutions are Evolving
Mergers, Diversification, and Downsizing
Cost Containment and Value-Driven Retailing
Retail Institutions Categorized By Store-Based Strategy Mix
Food-Oriented Retailers
General Merchandise Retailers
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: Dillard’s (www.dillards.com)
Chapter 6 Web, Nonstore-Based, and Other Forms of Nontraditional Retailing
Table of Contents
Chapter Objectives
Overview
Direct Marketing
The Domain of Direct Marketing
The Customer Database: Key to Successful Direct Marketing
Emerging Trends
The Steps in a Direct-Marketing Strategy
Key Issues Facing Direct Marketers
Direct Selling
Vending Machines
Electronic Retailing: The Emergence of the World Wide Web
The Role of the Web
The Scope of Web Retailing
Characteristics of Web Users
Factors to Consider in Planning Whether to Have a Web Site
Mobile Apps Enabling Online Retailing
Examples of Web Retailing in Action
Other Nontraditional Forms of Retailing
Video Kiosks
Airport Retailing
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: “Charts & Data” section of Internet Retailer’s Web
site (www.internetretailer.com)
Appendix Omnichannel Retailing
Advantages of Omnichannel Retail Strategies
Developing a Well-Integrated Omnichannel Strategy
Special Challenges
Part 2 Short Cases
Case 1: Do Power Players Rule?
Case 2: Will the Favorites of Today Remain Popular?
Case 3: Omnichannel Strategies of Top Retailers
Case 4: Omnichannel Food Retailing Still Needs Work
Part 2 Comprehensive Case
What Consumers Find Expendable versus Untouchable
What Are Consumers Finding Expendable?
Ongoing Recovery
Mash-Up
Older and Wiser?
Tracking Trends
Gender Trends
PART 3 Targeting Customers and Gathering InformationChapter 7 Identifying and Understanding Consumers
Chapter Objectives
Table of Contents
Overview
Consumer Demographics and Lifestyles
Consumer Demographics
Consumer Lifestyles
Retailing Implications of Consumer Demographics and Lifestyles
Consumer Profiles
Consumer Needs and Desires
Shopping Attitudes and Behavior
Attitudes toward Shopping
Where People Shop
The Consumer Decision Process
Types of Consumer Decision Making
Impulse Purchases and Customer Loyalty
Retailer Actions
Retailers with Mass Marketing Strategies
Retailers with Concentrated Marketing Strategies
Retailers with Differentiated Marketing Strategies
Environmental Factors Affecting Consumers
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: Claire’s (www.claires.com) and Icing (www.icing.com)
Chapter 8 Information Gathering and Processing in Retailing Chapter Objectives
Overview
Information Flows in a Retail Distribution Channel
Avoiding Retail Strategies Based on Inadequate Information
The Retail Information System
Building and Using a Retail Information System
Database Management
Gathering Information through the UPC and EDI
The Marketing Research Process
Secondary Data
Primary Data
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: Coca-Cola Retailing Research Council (www.ccrrc.org)
Part 3 Short Cases
Case 1: Eating Patterns in America
Case 2: The Convenience Economy Comes of Age
Case 3: Are Hot Retailers of 2015 Still Hot?
Case 4: Navigating the Shopper Universe through Big Data
Part 3 Comprehensive Case
Table of Contents
How Do You Attract and Satisfy Millennials?
PART 4 Choosing a Store LocationChapter 9 Trading-Area Analysis
Chapter Objectives
Overview
The Importance of Location to a Retailer
Trading-Area Analysis
The Use of Geographic Information Systems in Trading-Area Delineation and
Analysis
The Size and Shape of Trading Areas
Delineating the Trading Area of an Existing Store
Delineating the Trading Area of a New Store
Characteristics of Trading Areas
Characteristics of the Population
The Nature of Competition and the Level of Saturation
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: Web site of Site Selection Online (www.siteselection.com)
Chapter 10 Site SelectionChapter Objectives
Overview
Types of Locations
The Isolated Store
The Unplanned Business District
The Planned Shopping Center
The Choice of a General Location
Location and Site Evaluation
Pedestrian Traffic
Vehicular Traffic
Parking Facilities
Transportation
Store Composition
Specific Site
Terms of Occupancy
Overall Rating
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: Main Street America (www.preservationnation.org/main-street)
Part 4 Short Cases
Case 1: Are Smaller and Faster Better?
Case 2: Organize, Optimize, Synchronize
Case 3: Removing Barriers to Cross-Border Commerce
Table of Contents
Case 4: Warehouse Management: Right Time, Right Place
Part 4 Comprehensive Case
PART 5 Managing a Retail BusinessChapter 11 Retail Organization and Human Resource Management
Chapter Objectives
Overview
Setting Up a Retail Organization
Specifying Tasks to Be Performed
Dividing Tasks among Channel Members and Customers
Grouping Tasks into Jobs
Classifying Jobs
Developing an Organization Chart
Organizational Patterns in Retailing
Organizational Arrangements Used by Small Independent Retailers
Organizational Arrangements Used by Department Stores
Organizational Arrangements Used by Chain Retailers
Organizational Arrangements Used by Diversified Retailers
Human Resource Management in Retailing
The Special Human Resource Environment of Retailing
The Human Resource Management Process in Retailing
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: Macy’s, Inc. has dedicated to “Careers After College”
(www.macyscollege.com)
Chapter 12 Operations Management: Financial DimensionsChapter Objectives
Overview
Profit Planning
Asset Management
The Strategic Profit Model
Other Key Business Ratios
Financial Trends in Retailing
Budgeting
Preliminary Budgeting Decisions
Ongoing Budgeting Process
Resource Allocation
The Magnitude of Various Costs
Productivity
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: QuickBooks (http://quickbooks.intuit.com/tutorials)
Chapter 13 Operations Management: Operational Dimensions
Table of Contents
Chapter Objectives
Overview
Operating a Retail Business
Operations Blueprint
Store Format, Size, and Space Allocation
Personnel Utilization
Store Maintenance, Energy Management, and Renovations
Inventory Management
Store Security
Insurance
Credit Management
Technology and Computerization
Outsourcing
Crisis Management
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: Pricer (www.pricer.com/en/Solutions)
Part 5 Short Cases
Case 1: Assistant Store Manager
Case 2: Manager, Training and Development
Case 3: Senior Manager of Digital Operations
Case 4: Retail Shrinkage: A Significant Problem
Part 5 Comprehensive Case
Predicting Retail Trends
Predictions of 2016 Retailing Trends
PART 6 Merchandise Management and PricingChapter 14 Developing Merchandise Plans
Chapter Objectives
Overview
Merchandising Philosophy
Buying Organization Formats and Processes
Level of Formality
Degree of Centralization
Organizational Breadth
Personnel Resources
Functions Performed
Staffing
Devising Merchandise Plans
Forecasts
Innovativeness
Assortment
Brands
Timing
Allocation
Table of Contents
Category Management
What Manufacturers Think about Retailers
What Retailers Think about Manufacturers
Merchandising Software
General Merchandise Planning Software
Forecasting Software
Innovativeness Software
Assortment and Allocation Software
Category Management Software
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: TXT Retail Web site
(http://-txtretail.txtgroup.com/solutions/assortment-planning-buying/)
Chapter 15 Implementing Merchandise PlansChapter Objectives
Overview
Implementing Merchandise Plans
Gathering Information
Selecting and Interacting with Merchandise Sources
Evaluating Merchandise
Negotiating the Purchase
Concluding Purchases
Receiving and Stocking Merchandise
Reordering Merchandise
Re-evaluating on a Regular Basis
Logistics
Performance Goals
Supply Chain Management
Order Processing and Fulfillment
Transportation and Warehousing
Customer Transactions and Customer Service
Inventory Management
Retailer Tasks
Inventory Levels
Merchandise Security
Reverse Logistics
Inventory Analysis
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: “Business” section of the U.S. Postal Service’s Web
site (www.usps.com/business)
Chapter 16 Financial Merchandise ManagementChapter Objectives
Table of Contents
Overview
Inventory Valuation: The Cost and Retail Methods of Accounting
The Cost Method
The Retail Method
Merchandise Forecasting and Budgeting: Dollar Control
Designating Control Units
Sales Forecasting
Inventory-Level Planning
Reduction Planning
Planning Purchases
Planning Profit Margins
Unit Control Systems
Physical Inventory Systems
Perpetual Inventory Systems
Unit Control Systems in Practice
Financial Inventory Control: Integrating Dollar and Unit Concepts
Stock Turnover and Gross Margin Return on Investment
When to Reorder
How Much to Reorder
Chapter Summary
• Key Terms
Questions for Discussion
Web-Based Exercise: benchmarking section of the Retail Owners Institute Web site
(http://retailowner.com/Benchmarks)
Chapter 17 Pricing in RetailingChapter Objectives
Overview
External Factors Affecting a Retail Price Strategy
The Consumer and Retail Pricing
The Government and Retail Pricing
Manufacturers, Wholesalers, and Other Suppliers—and Retail Pricing
Competition and Retail Pricing
Developing a Retail Price Strategy
Retail Objectives and Pricing
Broad Price Policy
Price Strategy
Implementation of Price Strategy
Price Adjustments
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: Neiman Marcus (www.neimanmarcus.com)
Part 6 Short Cases
Case 1: Buyer of Sports Equipment
Case 2: Adapting to the Internet of Things (IoT)
Table of Contents
Case 3: High Marks by Suppliers and Wholesalers for Convenience Stores
Case 4: Data-Driven Pricing
Part 6 Comprehensive Case
Knocking Off the Knockoffs?
PART 7 Communicating with the CustomerChapter 18 Establishing and Maintaining a Retail Image
Chapter Objectives
Overview
The Significance of Retail Image
Components of a Retail Image
The Dynamics of Creating and Maintaining a Retail Image
Atmosphere
A Store-Based Retailing Perspective
A Nonstore-Based Retailing Perspective
Encouraging Customers to Spend More Time Shopping
Community Relations
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: Johnny Rockets (www.johnnyrockets.com)
Chapter 19 Promotional StrategyChapter Objectives
Overview
Elements of the Retail Promotional Mix
Advertising
Public Relations
Personal Selling
Sales Promotion
Planning a Retail Promotional Strategy
Determining Promotional Objectives
Establishing an Overall Promotional Budget
Selecting the Promotional Mix
Implementing the Promotional Mix
Reviewing and Revising the Promotional Plan
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: Web site (www.entrepreneur.com/article/241607)
Part 7 Short Cases
Case 1: Keep It Simple
Case 2: More than Price
Case 3: Enhancing the In-Store Experience through Facial Recognition Software
Case 4: Revitalizing Customer Loyalty
Part 7 Comprehensive Case
Table of Contents
Inside the Mind of Shake Shack’s Founder
PART 8 Putting It all TogetherChapter 20 Integrating and Controlling the Retail Strategy
Chapter Objectives
Overview
Integrating the Retail Strategy
Planning Procedures and Opportunity Analysis
Defining Productivity in a Manner Consistent with the Strategy
Performance Measures
Scenario Analysis
Control: Using the Retail Audit
Undertaking an Audit
Responding to an Audit
Possible Difficulties in Conducting a Retail Audit
Illustrations of Retail Audit Forms
Chapter Summary
Key Terms
Questions for Discussion
Web-Based Exercise: American Customer Satisfaction Index (www.theacsi.org)
Part 8 Short Cases
Case 1: Envision the Future: Part 1
Case 2: Envision the Future: Part 2
Part 8 Comprehensive Case
Achieving Excellence in Retailing
Research Methodology
Appendix: Careers in Retailing
Glossary
Endnotes
Name Index
Subject Index