Lamb, Hair, McDaniel
MKTG2007-2008
13
CHAPTER
Designed by
Amy McGuire, B-books, Ltd.
Chapter 13
Retailing
Prepared by
Deborah Baker, Texas Christian University
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
1
Retailing
Retailing
All the activities directly
related to the sale of goods
and services to the ultimate
consumer for personal,
non-business use.
LO1
Chapter 13
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2
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
LO1
Chapter 13
Industry is dominated by a few giant
organizations, such as Wal-Mart
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3
LO1 REVIEW LEARNING OUTCOME
The Importance of Retailing
Retailing as a %
of U.S. employment
11.6%
Retailing as a %
of U.S. businesses
Retailing as a %
of GDP
13%
40%
Chapter 13
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4
Classification of Retail Operations
Ownership
Level of Service
Product Assortment
LO2
Chapter 13
Price
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5
Classification of Ownership
Independent
Retailers
Owned by a single person or
partnership and not part of a
larger retail institution
Chain Stores
Owned and operated as a group
by a single organization
Franchises
The right to operate a business
or sell a product
LO2
Chapter 13
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6
Level of Service
Self Service
Factory outlets
Warehouse clubs
Full Service
Discount stores
Exclusive stores
LO2
Chapter 13
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7
Types of Stores and Their
Characteristics
Type of Retailer
Service
Level
Assortment
Price
Gross
Margin
Department Store
Mod Hi-High
Broad
Mod-High
Mod High
Specialty Store
High
Narrow
Mod-High
High
Supermarket
Low
Broad
Moderate
Low
Convenience Store
Low
Med-Narrow Mod High
Mod High
Drugstore
Low-Mod
Medium
Moderate
Low
Full-line Discounter
Mod-Low
Med-Broad
Mod Low
Mod Low
Specialty Discounter
Mod-Low
Med-Broad
Mod Lo-low
Mod Low
Warehouse Clubs
Low
Broad
Low-very low Low
Off-price Retailer
2
Low
Med-Narrow Low
Low
Restaurant
Low-High
Narrow
Low-High
LO
Chapter 13
Low-High
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8
Price
Gross
Margin
The amount of money
the retailer makes as a
percentage of sales after
the cost of goods sold is
subtracted.
LO2
Chapter 13
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9
LO3 Major Types of Retail Operations
Department Stores
Specialty Stores
Supermarkets
Drugstores
Convenience Stores
Discount Stores
http://www.walgreens.com
Restaurants
Chapter 13
Online
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10
LO3 Categories of Discount Stores
Full-Line
Discounters
Specialty Discount
Stores
Warehouse
Clubs
Off-Price
Discount Retailers
Chapter 13
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11
LO3 Discount Stores
Mass
Merchandising
Chapter 13
Retailing strategy using
moderate to low prices on
large quantities of
merchandise and lower
service to stimulate high
turnover of products.
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12
LO3 Discount Stores
Supercenter
Full-line discounter
Chapter 13
Retail store combining
groceries and general
merchandise goods with a
wide range of services.
Retailer offering consumers
very limited service and
carrying a broad assortment of
well-known, nationally branded
“hard goods”.
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13
LO3 Specialty Discount Stores
Category
Killers
Chapter 13
Specialty discount stores
that heavily dominate
their narrow merchandise
segment.
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14
LO3 REVIEW LEARNING OUTCOME
Types of Retail Operations
Department
Stores
Specialty
Stores
Supermarket
Drugstores
Convenience
Stores
Discount
Stores
Restaurants
supercenter
Full-line
extremevalue
Scrambled
Merchandising
Specialty
category
killer
Warehouse
Off-price
Chapter 13
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factory
outlet
15
Nonstore Retailing
Automatic Vending
Direct Retailing
Direct Marketing
Electronic Retailing
LO4
Chapter 13
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16
Direct Retailing
Door-to-Door
Office-to-Office
Home Sales Parties
LO4
http://www.avon.com
Online
Chapter 13
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17
Types of Direct Marketing
Direct Mail
Catalogs & Mail Order
Shop-at-home networks
On-line retailing
LO4
Chapter 13
Telemarketing
Electronic Retailing
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18
LO4 REVIEW LEARNING OUTCOME
Nonstore Retailing Techniques
Nonstore Retailing
Vending
Direct retailing
Chapter 13
Direct marketing
direct mail
catalogs
telemarketing
Electronic retailing
online
shop at home
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19
LO5 Basic Forms of Franchising
Product and Trade Name
Franchising
Business Format
Franchising
Chapter 13
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20
LO5 Franchising
Chapter 13
Product and
Trade Name
Franchising
Dealer agrees to sell in
products provided by a
manufacturer or wholesaler.
Business
Format
Franchising
An ongoing business
relationship between a
franchiser and a franchisee.
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21
LO5 Largest U.S. Franchisors
McDonald’s
Southland
Subway
Burger King
KFC
Pizza Hut
RadioShack
Taco Bell
Dairy Queen
Hooter’s
Jason’s Deli
Marble Slab
Quiznos Sub
SOURCE: http://www.franchise.org, January 2006.
Chapter 13
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22
Retail Marketing Strategy
Define & Select
a Target Market
Develop the
“Six Ps”
LO6
Chapter 13
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23
Defining a Target Market
Demographics
STEP 1:
Segment the Market
Geographics
Psychographics
LO6
Chapter 13
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24
Biz Flix
LO6
Chapter 13
Man’s Favorite
Sport
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25
Choosing the Retailing Mix
STEP 2:
Choose the
Retailing Mix
LO6
Chapter 13
Product
Place
Price
Personnel
Promotion
Presentation
http://www.publix.com
Online
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26
The Retailing Mix
Product
Personnel
Place
Target
Market
Presentation
LO6
Chapter 13
Promotion
Price
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27
Choosing the Retailing Mix
Product
Offering
The mix of products offered to
the consumer by the retailer;
also called the product
assortment or merchandise
mix.
LO6
Chapter 13
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28
Retail Promotion Strategy
Advertising
Public Relations
Publicity
Sales Promotion
LO6
Chapter 13
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29
The Proper Location
Choosing a Community
Choosing a Site
Economic growth
potential
Freestanding Store
Competition
Shopping Center
Geography
Mall
LO6
Chapter 13
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30
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
LO6
Chapter 13
Fit with other stores
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31
Shopping Center and
Mall Locations
Advantages
Design attracts
shoppers
Activities and anchor
stores draw customers
Ample parking
Unified image
Sharing of common
area expenses
LO6
Chapter 13
Disadvantages
Expensive leases
Failure of common
promotion efforts
Lease restrictions
Hours of operation
Anchor store
domination
Direct competitors
Consumer time limits
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32
Retail Prices
Low Price
Good Value
Single Price Point
EDLP
High Price
Quality
Image
LO6
Chapter 13
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33
Presentation of the
Retail Store
Atmosphere
The overall impression
conveyed by a store’s
physical layout, décor, and
surroundings
LO6
Chapter 13
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34
Presentation of the
Retail Store
Employee type and density
Merchandise type and density
Fixture type and density
Sound
Odors
LO6
Chapter 13
Visual factors
http://www.apple.com
Online
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35
Personnel and Customer
Service
Trading Up
Two Common
Selling
Techniques
Suggestion Selling
LO6
Chapter 13
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36
Customer Service for
On-Line Retailers
Easy-to-use Web site
Product availability
Simple returns
LO6
Chapter 13
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37
LO6 REVIEW LEARNING OUTCOME
Developing a
Retail Marketing
Strategy
Chapter 13
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38
New Developments in Retailing
Interactivity
Consumers are
involved in the
retail experience.
M-commerce
Purchasing goods
through mobile
devices.
LO7
Chapter 13
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39
