Retailing Exam 1 (Chapters 1-5) Study Guide Chapter 1: Introduction to Retailing • What is retailing? Retailing - adds value to products and services sold to consumers Not always in stores May include lodging in a motel, home-delivered pizza Selling to the end of consumers like Walmart, grocery stores. Retailing: Entity that adds value and consumers. Individual consumer, families, pizzerias, are in retailing because they sell to the end consumer. A retailer is part of the supply chain firm that supplies products to the end consumer. Retailers Create Value 1. Providing an assortment 2. Breaking bulk 3. Holding inventory 4. Providing services Costs of Channel Activities • Increase the costs of products and services • The costs in the supply chain can be almost as much as the cost to make the product • Difference between vertical, backward, and forward integration Vertical Integration: when the retailer performs several steps in the supply chain Forward integration: Tesla has its own dealership. Apple does it forward, they sell their products. Backward: Walmart has distribution centers and manufactures Great Value products. • What are some difficulties in retailing to consumers at the base of the pyramid? It's challenging to target the base of the pyramid because people with lower incomes have limited access to mass media for advertising. Completing transactions is difficult due to the lack of money or credit cards. Obtaining products from rural areas increases costs. • 40% of the world's population lives on less than $2.50 a day. • Base of the pyramid • Difficult to communicate and complete transactions • Lack access to mass media, the Internet, mobile phones, or credit cards • Rural, remote • What is corporate social responsibility? Voluntary Meets or exceeds the ethical and legal expectations of stakeholders Conscious marketing • Recognition of the retailing firm’s greater purpose • Consideration of stakeholders and their interdependence • The presence of conscious leadership, creating a corporate culture • The understanding that decisions are ethically based o TOMS provides free shoes to residents of poor nations. o Walmart issues standards for farms that supply it with livestock products. The company should take responsibility for people, such as when there is a beef stench in Kansas affecting the town, it's meeting a moral obligation because it should be done, but it's also going above and beyond morality. It may be cheaper to pollute, but it's not ethical. Chapter 2: Types of Retailers • Difference between variety and assortment Variety (breadth) Number of different merchandise categories. Many merchandise categories, food, clothes, medicine. Assortment (depth) How many colors, sizes, variety are available in clothing. Variety and assortment also apply to a specific merchandise category rather than the entire store. Stock-keeping unit (SKU) individual unique product, in the general merchandise category, you have a lot of clothing, Levi's jeans, specifically in jeans, you check how many you need and the suppliers bring them to you. • What are the different types of food retailers? Conventional supermarkets account for less than 65% of food sales • Offer services: pharmacies, health care, banks, coffee • Want customers to think of it as a place to “hang out” Supermarkets • Conventional supermarkets • Perishables (meat, dairy, produce) are almost 54% of sales • Limited assortment supermarkets • Extreme-value food retailers • 1500 SKU • Offer one or two brands and sizes • Maximize efficiency to reduce costs • Merchandise up to 40% lower than conventional supermarkets Supercenters Walmart, Target, where they combine supermarkets and a general discount store • Combine supermarket with full-line discount store • One-stop shopping experience • Hypermarkets emphasize perishables • Big-box stores Warehouse Clubs like Sam's, Costco, are self-service and are cheaper to join. • Offer limited and irregular assortment of food and general merchandise • Little service and low prices • Located in low-rent districts • Simple interiors • Low inventory holding costs Convenience Stores like 7-Eleven are global, but costs are higher since you get what you want instantly. • Limited assortment of merchandise • Convenience shopping • Prices generally higher than supermarkets • Tailoring assortment to local markets • Offering more fresh options • Adding services: banking, movie tickets, gift cards Online Grocery Retailers grew significantly after the pandemic, with a 22% increase. • Customers willing to pay more to save time • Online retailers continue to expand • About 30% of orders are for nonfood items Paper products, cleaning items • Slim profit margins continue to be a problem • What is fair trade? Going above and beyond what is legal, ensuring that workers are treated well and receive more than just the basics. Decreasing CEO salaries. Fair Trade is not just about the ultimate bottom line; it's about making a positive impact. • What are the different types of general merchandise retailers? Department Stores sell everything except food, such as clothing. Sears is an example. • Broad variety, deep assortment • Customer services and distinct merchandise departments • Soft goods, hard goods, durable goods • Three tiers • Upscale, high-fashion chains • Moderate pricing with less customer service • Value-oriented • Must minimize eroding market share • Aggressively seeking exclusive brands • More emphasis on developing private-label/store brands • Expanding omnichannel and social media presence Full-Line Discount Stores like Walmart and Target, but they are not supercenters. Walmart focuses more on cheap private brands with a stylish look. • Broad variety, limited service, low prices • Walmart converted many discount stores into supercenters • Online order with store pick-up • Expanding product range • Target • Fashionable merchandise “cheap chic” appeal Category Specialists specialize in specific categories like IKEA (furniture), Dick's Sporting Goods, and Godiva (chocolates). • Deep, narrow assortment • Self-service approach • Category killers – consumers are drawn to deep assortment and competitive prices • Intense competition • Trying to differentiate with customer service Specialty Stores concentrate on a limited number of complementary merchandise categories • Deep but narrow variety • Sales associate expertise • Among the most profitable and fastest-growing firms • Growing specialty store sector • Resale stores help the environment as people can reuse and buy second-hand items. People can buy minimalistic products. • Thrift stores donate and sell donations • Consignment shops sell your products and pay you when they sell Drugstores are growing due to lifestyle changes like Walgreens. • Concentrate on health and beauty care • Facing competition from pharmacies and some food retailers, pressure to reduce costs • Offer a wider assortment of merchandise • Offer more services with drive-through windows, curbside pick-up, in-store clinics Extreme-Value Retailers offer limited service and allow you to buy everything you want at a low cost. • Dollar stores • Broad variety, but shallow assortment • Target low-income consumers Off-Price Retailers offer significant price discounts of 20% to 60% lower than the suggested retail price. Examples include closeouts, irregulars, outlet stores, factory outlets, and flash sale sites. • What are the differences between service and merchandise retailers? Chapter 3: Multichannel and Omnichannel Retailing What is a retail channel, and what are the different types of retail channels? The opportunity to complete a transaction Stores, Internet, mobile, social media, catalogs What are the relative strengths and weaknesses of the different types of retail channels? In-Store Retailing offers personal service, the opportunity to touch and smell products, and immediate gratification. However, it lacks the breadth of information that online retailing offers. • Touch and smell of products • Personal service • Risk reduction • Immediate gratification • Entertainment and social experience • Cash payment is more painful, making people less likely to spend Internet Retailing offers a deeper and broader selection, more information for evaluating merchandise, personalization, live chats, expanded market presence, and the ability to improve the shopping experience across channels. However, it has perceived risks, such as the potential for fraud. • Mobile retailing, mobile commerce, m-commerce • Deeper and broader selection • More information for evaluating merchandise • Personalization send what you are looking for • Live chats • Expanded market presence, not limited to a specific location • Information to improve the shopping experience across channels • Perceived risks in Internet shopping due to potential fraud Mobile Retailing allows customers to access retail sites from anywhere and is location-sensitive. The biggest disadvantage is the smaller viewing screen, but some retailers design distinct websites and apps for different devices. • Customers access retail sites from anywhere • Location-sensitive • Biggest disadvantage is smaller viewing screen • Some retailers design distinct websites and apps for different devices Social Retailing involves conducting purchase transactions through social media sites. Platforms like Twitter, Pinterest, and Instagram have "buy buttons." Catalog and Other Nonstore Channels Catalog channel, as seen with Sears, allows customers to place an order from anywhere and access the catalog at any time. It can be easier to browse than a website. Direct Selling involves face-to-face interaction with customers at home or work. Automated Retailing uses vending machines for sales. What is showrooming, and what are ways that it can be limited? Showrooming is when customers visit a physical store to check out a product but then make the purchase online or from another retailer. It can be limited by providing better customer service, offering unique and relevant information based on customer data, and promoting private-label merchandise. Chapter 4: Customer Buying Behavior What are the stages in the buying process? Know each carefully. Need Recognition • Desire state differs from present level, the ideal state may increase. The actual state may be your desire, but if it differs and the actual state decreases, you have a need. • An unsatisfied need is the trigger for the buying process. • The desired level of satisfaction differs from the present level. • Stimulating Need Recognition • Advertising, email, direct mail, publicity, special events stimulate outside the store. • Visual merchandising and salespeople stimulate inside the store. • What is the difference between hedonic and utilitarian needs? Types of Needs • Utilitarian involves buying something because you need it. • Hedonic involves buying something because you want it. • How do retailers satisfy hedonic needs? • Stimulation, creating an enriching experience that engages customers. • Providing status and power, offering customized service that makes customers feel powerful. • Offering adventure and thrill, such as finding deals like at TJ Maxx where you don't know what you'll find in the store. • Know the difference between internal and external sources of information. • Internal sources: Past shopping experience, information from previous purchases, like where you bought it and what it was like. • External sources: Word-of-mouth, social media, information from others who have purchased the product. • What is the conversion rate, and why is it important? Conversion rate is the percentage of customers who enter a store and buy products from that same store. It's important because it measures the effectiveness of a store's ability to turn visitors into paying customers. • How does the multiattribute model work in retail evaluations? The multiattribute model allows customers to evaluate a retailer, product, or service based on a collection of attributes or characteristics. Customers consider attributes, their importance, and the retailer's performance on those attributes to make an evaluation. • What does the consideration set mean? Consideration set refers to the set of alternatives that a customer evaluates when deciding which retailer to patronize. Retailers must strive to get their products into the consideration set to increase the likelihood of future purchases. • What are the different types of buying decisions? • Financial risks: concerns about spending too much on a product. • Physical risks: concerns about the impact of a product on one's health and well-being. • Social risks: concerns about how others perceive a purchase. • What are the criteria for evaluating potential market segments? Actionable: Retailers should know how to satisfy the needs of customers in a segment. Identifiable: Retailers can determine which customers belong to the segment. Substantial: The market segment must be large enough or have sufficient buying power to generate profits. Reachable: Retailers can target promotions and other elements of the retail mix to customers in the segment. • How does buying situation and benefit segmentation work? Buying Situation Segmentation • Segments customers based on buying situations, such as fill-in versus weekly shopping. • Benefit Segmentation • Groups customers seeking similar benefits, focusing on what customers want from a product or service. Chapter 5: Retail Market Strategy • What does the retail format entail? The retail format encompasses the nature of the retailer's operations, including its retail mix. • What is a sustainable competitive advantage? A sustainable competitive advantage is an advantage over the competition that is not easily duplicated and can be maintained over a long time. • What are examples of more versus less sustainable competitive advantages? Examples of more sustainable competitive advantages include unique store locations that cannot be easily replicated, exclusive supplier relationships, and strong brand loyalty. Examples of less sustainable competitive advantages include temporary price reductions and easily replicable store designs. • What is the most important factor that determines which store a customer will patronize? A sustainable competitive advantage that is not easily duplicated is a key factor that determines which store a customer will choose. • What do the different growth opportunities mean? Market Penetration: Expanding by getting current customers to visit the store more often or buy more on each visit. Market Expansion: Using an existing retail format in new market segments. Retail Format Development: Developing a new retail format with a different retail mix for the same target market. Diversification: Introducing a new retail format directed toward a market segment not currently served by the retailer. It can be related or unrelated to the retailer's current format. • What are the different entry strategies for retailers entering global markets? Direct investment: Establishing and operating stores or subsidiaries in foreign countries. For example, Chipotle owns its international locations. Joint venture: Partnering with another company in a foreign market to operate stores. The two companies form a new business entity together. Strategic alliance: Forming cooperative agreements with other firms to enter new markets or distribute products. It doesn't involve creating a new company. Franchising: Licensing the right to operate its stores, sell its products, or use its business format to individuals or firms in foreign markets. For example, Chick-fil-A franchises its stores. The franchisor may receive a percentage of the sales or royalties as compensation . Espero que esta traducción sea útil. Si tienes alguna pregunta adicional o necesitas más traducciones, no dudes en preguntar.
