Marketing
Chapter 16
Retailing
Dhruv Grewal
Michael Levy
McGraw-Hill/Irwin
Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved.
16-2
Urban Outfitters
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Uses its three brands: Urban
Outfitters, Anthropologie, and
Free People
All three have been successful
serving very different
audiences
Multichannel: stores, internet
and catalog
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16-3
Retailing
Wholesalers
Virtually every penny you
spend, except for taxes,
goes to retailers
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16-4
The Changing Retail Landscape
The Big Middle: Part of the market where
most firms compete
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16-5
Test Your Knowledge
After a retail firm makes it to the Big Middle, they should
_______________.
A)
relax – they have made it
B)
lower their prices
C)
evaluate their marketing plan
D)
audit, fine tune, or change their innovative or
operational skills
16-6
How Do Retailers Create Value?
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Consumers have changed their
preference for price and quality
Lifestyles have become more casual
Retailers must
go beyond low
price to create
value
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16-7
Using the Four P’s to Create Value in
Retailing
Product, price, promotion, place
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16-8
Product
Providing the right mix of
merchandise and services
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Price
Price defines the value of both the
merchandise and the service
provided
16-10
Promotion
Retailers use a wide variety of promotions,
both within their retail environment and
through mass media
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16-11
Place
Convenience is a key ingredient to
success
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16-12
Internet and Electronic Retailing
Bricks and mortar
Trade area
Multichannel retailers
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16-13
Internet Helpers
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16-14
Internet Hinderers
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16-15
Test Your Knowledge
Consumers who shop at _______________ typically buy more
than those who shop at other retailers.
A)
brick and mortar retailers
B)
multichannel retailers
C)
Internet retailers
D)
specialty stores
16-16
Entrepreneurial Marketing 16.1: Bezos
Building Amazon.com


Plan for an extensive, onstop Internet catalog for
books
Wanted to create the “world’s
most customer centric
company. The place where
people come to find and
discover anything they might
want to buy online.”
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16-17
Types of Retailers
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16-18
Test Your Knowledge
What type of retailer concentrates on a limited number of
complementary merchandise categories in relatively small
stores?
A)
discount stores
B)
department stores
C)
specialty stores
D)
category specialists
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Food Retailers
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16-20
Food Retailers
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16-21
Food Retailers
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16-22
Breaking the Mold in Food Retailing
How do you generate excitement for
grocery shopping in consumers?
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16-23
Case in Point: H.E.B.’s Central Market
Challenge
To excite consumers about
grocery shopping.
Answer
New high end concept, focusing on
creating a “theater of food” with
demonstrations throughout the
store. Providing variety, quality and
depth of products not found in
other grocery stores.
Results
H.E.B is a private company that does
not divulge sales figures for Central
Market but keeps expanding the
chain and claims they “meet
expectations”.
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General Merchandise Retailers
Discount
Stores
Off-Price
Retailers
Specialty
Stores
General
Merchandise
Retailers
Category
Specialists
Drugstores
Department
Stores
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16-25
Test Your Knowledge
What type of retailer offers an inconsistent assortment of
merchandise at relatively low prices?
A)
off-price retailer
B)
specialty store
C)
discount store
D)
department store
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Finding the Right Niche
Specialty stores need to serve the segment of
consumer beyond what bigger retailers provide.
How do you fill that niche?
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16-27
Case in Point: One Hot Mama
Challenge
To offer upscale Mom’s, and Mom’s
to be, a place to shop with their kids.
Answer
Hot Mama offers limited edition
designer, regular and maternity tshirts and casual wear. The store
also is child friendly and allows
women to shop with their children.
Results
Opening in 2004, Hot Mama predicts
sales of $4M in 2006.
16-28
Chapter 16 Glossary
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Bricks-and-mortar retailer: A traditional, physical store.
Multichannel retailers: Retailers that sell merchandise in more than
one retail channel (e.g., store, catalog, and Internet).
Retailing: The set of business activities that add value to products and
services sold to consumers for their personal or family use; includes
products bought at stores, through catalogs, and over the Internet, as
well as services like fast-food restaurants, airlines, and hotels.
Trade area: The geographical area that contains the potential
customers of a particular retailer or shopping center.
Wholesalers: Those firms engaged in buying, taking title to, often
storing, and physically handling goods in large quantities, then
reselling the goods (usually in smaller quantities) to retailers or
industrial or business users.
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