5th Edition
PPT 1-1
Consumer Behavior
Ignacio J. Vázquez E. © 2007
Chapter 1
Introduction to the
World of Retailing
McGraw-Hill/Irwin
Levy/Weitz:
Retailing Management,
5/e
Behavior
PPT
1-2 Consumer
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Ignacio J. Vázquez E. © 2007
What is Retailing?
• Retailing – a set of business activities that
adds value to the products and services sold to
consumers for their personal or family use.
• A retailer is a business that sells products
and/or services to consumers for personal or
family use.
PPT 1-3
Consumer Behavior
Ignacio J. Vázquez E. © 2007
Examples of Retailers
• Retailers:
-Sears, Holiday Inn, McDonalds, Amazon.com, Jiffy
Lube, AMC Theaters, American Eagle Outfitter, FAO
Schwartz, Kroger
• Firms that are retailers and wholesalers that
sell to other business as well as consumers:
-Office Depot, The Home Depot, United Airlines, Bank
of America, Sams Clubs
PPT 1-4
Consumer Behavior
Ignacio J. Vázquez E. © 2007
How Retailers Add Value
• Breaking Bulk
-Buy it in quantities customers want
• Holding Inventory
-Buy it at a convenient place when you want it
• Providing Assortment
-Buy other products at the same time
• Offering Services
-See it before you buy, get credit, layaway
PPT 1-5
Consumer Behavior
Ignacio J. Vázquez E. © 2007
How Retailers Add Value
The value of the product and service increases
as the retailer performs functions.
Doll can be bought
on credit or put on
layaway
Doll is featured on
floor display
Doll is offered in
convenient
locations in
Doll is developed in quantities of one
several styles
Doll is developed at
manufacturer
PPT 1-6
Consumer Behavior
Ignacio J. Vázquez E. © 2007
Manufacturer’s Perspective
The Four P’s of Marketing
Retailers
Retailersare
are part
part of
of the
the
distribution channel
channel
distribution
Product
Price
Distribution
Promotion
PPT 1-7
Consumer Behavior
Ignacio J. Vázquez E. © 2007
Distribution Channel
PPT 1-4
PPT 1-8
Distribution Channel
Consumer Behavior
Ignacio J. Vázquez E. © 2007
Retailers are a Business Like Manufacturers
Accounting
Operations
PPT 1-9
Consumer Behavior
Finance
MIS
Marketing
Human Resources
Ignacio J. Vázquez E. © 2007
Decision Variables for Retailers
Customer Service
Store Design
and Display
Retail
Merchandise
Assortment
Strategy
Pricing
Location
Communication
Mix
PPT 1-10 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Economic Significance of Retailing
• Over $2.5 trillion in annual U.S. sales
-greater than medical care, housing, recreation combine
• Employs 17% of population
-about the same as manufacturing and growing
• Management training opportunities
• Entrepreneurial opportunities
PPT 1-11 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Nature of Retail Industry is Changing
To Today’s Retailer
Mom and Pop Store
PPT 1-12 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Retailing is a High Tech Industry
- Selling Merchandise over the Internet
- Using Internet to manage supply chains
- Analyze POS data to tailor assortments to stores
- Computer systems for merchandise planning
PPT 1-13 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Globalization of Retailing
Source Merchandise From Around the World
Wal-Mart Operates in U.S., China, Mexico, UK, Germany
Carrefour has Stores in 25 Countries
PPT 1-14 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Retail Environment Differs Across the Globe
US
Japan
Concentration
High
Medium
Store Size
Big
Small
Role of
Low
High
High
Low
Wholesaling
Efficiency
PPT 1-15 Consumer Behavior
Ignacio J. Vázquez E. © 2007
JC Penney’s Strategic Evolution
• Main Street private label soft goods retailer
• Changes in environment -- increased disposable
income, growth of suburbs, interstate highway
program
• Emulate Sears in enclosed suburban malls
• Focus on soft goods -- drop automotive, sporting
goods, hardware
• Develop catalog, develop electronic retailing
• Future (?)
PPT 1-16 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Sears’ Strategic Evolution
• Large number of merchandise categories -appliances, hardware, apparel
• Malls evolved into places for buying soft goods,
hard goods sold at category killers
• The Softer Side of Sears
• Refocused on value -- Testing carts in stores
• Acquired Lands’ End
• Reviewed training program for new managers
PPT 1-17 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Whole Foods Implementation
Strategy - organic and natural
foods supermarket chain
Assortment beyond
organic/natural foods
Private labels - Whole
Food™, 360 Day Value™
Love, trust, and employee
empowerment
Equality in compensation
PPT 1-18 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Hot Topic’s Retail Mix
Customer Service
Location
Merchandise
Store Design
And Display
Retail Strategy
Communication
Assortment
Pricing
Mix
PPT 1-19 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Hot Topic’s Retail Mix
Location Strategy
Enclosed malls
Customer
Service
Store Display
And Design
Communication
Mix
PPT 1-20 Consumer Behavior
Merchandise
Assortment
Pricing
Ignacio J. Vázquez E. © 2007
Hot Topic’s Retail Mix
Assortment Strategy
Customer
Service
Location
Store Design
and Display
Communication
Pricing
Mix
PPT 1-21 Consumer Behavior
Many Different
Hot Band
T-shirts and
Accessories
Ignacio J. Vázquez E. © 2007
Hot Topic’s Retail Mix
Location
Customer
Service
Pricing Strategy
Merchandise
Assortment
Store Design
and Display
Communication
Mix
PPT 1-22 Consumer Behavior
Modest with Sales
Ignacio J. Vázquez E. © 2007
Hot Topic’s Retail Mix
Customer
Service
Communication Mix
Store Design
And Display
Location
Merchandise
Assortment
Pricing
TV and
Magazine Ads
PPT 1-23 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Hot Topic’s Retail Mix
Store Design and Display
Customer
Service
Heavy Metal,
Gothic Look
Merchandise
Assortments
Communication
Mix
PPT 1-24 Consumer Behavior
Location
Pricing
Ignacio J. Vázquez E. © 2007
Hot Topic’s Retail Mix
Customer Service
Modest
Location
Merchandise
Assortment
Store Design
and Display
Pricing
Communication
Mix
PPT 1-25 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Macy’s Retail Mix
Customer
Service
Store Design
And Display
Retail Strategy
Communication
Mix
PPT 1-26 Consumer Behavior
Location
Merchandise
Assortment
Pricing
Ignacio J. Vázquez E. © 2007
Macy’s Retail Mix
Location Strategy
Enclosed Malls
Customer
Service
Store Display
And Design
Communication
Mix
PPT 1-27 Consumer Behavior
Merchandise
Assortment
Pricing
Ignacio J. Vázquez E. © 2007
Macy’s Retail Mix
Assortment Strategy
Customer
Service
Location
Many Items in
Apparel and
Soft Home
Store Design
and Display
Communication
Mix
Pricing
PPT 1-28 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Macy’s Retail Mix
Location
Customer
Service
Pricing Strategy
Merchandise
Assortment
Store Design
and Display
Communication
Mix
PPT 1-29 Consumer Behavior
Moderate with
Frequent Sales
Ignacio J. Vázquez E. © 2007
Macy’s Retail Mix
Customer
Service
Communication Mix
Store Design
And Display
Location
Merchandise
Assortment
Pricing
TV, Newspaper Ads
and Special Events
PPT 1-30 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Macy’s Retail Mix
Store Design and Display
Customer
Service
Ring with Displays
Merchandise
Assortments
Communication
Mix
PPT 1-31 Consumer Behavior
Location
Pricing
Ignacio J. Vázquez E. © 2007
Macy’s Retail Mix
Customer Service
Modest
Location
Merchandise
Assortment
Store Design
and Display
Pricing
Communication
Mix
PPT 1-32 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Wal-Mart’s Retail Mix
Customer
Service
Store Design
And Display
Retail Strategy
Communication
Mix
PPT 1-33 Consumer Behavior
Location
Merchandise
Assortment
Pricing
Ignacio J. Vázquez E. © 2007
Wal-Mart’s Retail Mix
Location Strategy
Free-standing Stores
Customer
Service
Store Display
And Design
Communication
Mix
PPT 1-34 Consumer Behavior
Merchandise
Assortment
Pricing
Ignacio J. Vázquez E. © 2007
Wal-Mart’s Retail Mix
Assortment Strategy
Customer
Service
Location
Large Number
of Categories
Store Design
and Display
Communication
Mix
Pricing
PPT 1-35 Consumer Behavior
Few Items
in Each Category
Ignacio J. Vázquez E. © 2007
Wal-Mart’s Retail Mix
Location
Customer
Service
Pricing Strategy
Merchandise
Assortment
Store Design
and Display
Communication
Mix
PPT 1-36 Consumer Behavior
Low, EDLP
Ignacio J. Vázquez E. © 2007
Wal-Mart’s Retail Mix
Customer
Service
Location
Communication Mix
Store Design
and Display
Merchandise
Assortment
Pricing
TV and Newspaper
Insert Ads
PPT 1-37 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Wal-Mart’s Retail Mix
Store Design and Display
Customer
Service
Basic, Special
Displays
for Products
Merchandise
Assortments
Communication
Mix
PPT 1-38 Consumer Behavior
Location
Pricing
Ignacio J. Vázquez E. © 2007
Wal-Mart’s Retail Mix
Customer Service
Limited
Location
Merchandise
Assortment
Store Design
and Display
Pricing
Communication
Mix
PPT 1-39 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Career Opportunities in Retailing
Start Your Own Business
List of Retail Entrepreneurs on
Forbes 400 Richest Americans
• Walton Family (Wal-Mart)
• Fisher (The Gap)
• Wexner (Limited)
• Menard (Menard’s)
• Marcus, Blank (The Home Depot)
• Kellogg (Kohl’s)
• Schulze (Best Buy)
• Levine (Family Dollar)
• Gold (99Cent Only)
PPT 1-40 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Misconceptions About Careers in Retailing
• Don’t need college
• Low pay
• Long hours
• Boring
• Dead-end job
• No benefits
• Everyone is part-time
• Unstable environment
PPT 1-41 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Why You Should Consider Retailing
• Entry level management positions
-Department manager or assistant buyer/planner
-Manage and have P&L responsibility on your first job
• Starting pay average with great benefits
- Some retailers pay graduate school
• No two days are alike
• Buying for financially oriented people
• Management for people people
PPT 1-42 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Types of Jobs in Retailing
Most entry level jobs are in
store management or buying, but…
retailers also have staff specialists:
--accounting and finance
--real estate
--human resource management
--supply chain management
--advertising
--public affairs
PPT 1-43 Consumer Behavior
Ignacio J. Vázquez E. © 2007
Centro de Comercio Detallsita
•
www.gda.itesm.mx/ccd
•
ADMINISTRACIÓN DE MERCANCÍAS / PRECIOS: Aprenderás el manejo de compras,
resurtidos e inventarios que realizan las empresas de comercio al detalle.
Analizarás la tecnología que está revolucionando el retail y estudiarás la
administración y el establecimiento de precios, así como el desarrollo y
presentación de líneas de producto, dando especial atención a las relaciones
comprador-proveedor.
•
INTERNSHIP I Y II: Aplicarás tus conocimientos dentro de una empresa detallista.
en el verano trabajarás 7hrs. diarias por 5 semanas en una empresa de comercio al
detalle, en donde conocerás las diferentes áreas de la empresa y tendrás la
oportunidad de resolver algún problema o realizar un proyecto específico.
•
ADMINISTRACIÓN DE LA TIENDA Y SERVICIO AL CLIENTE: Analizarás los procesos
en el manejo y administración de una tienda. Aprenderás temas relacionados con
sistemas de información, recursos humanos, imagen y diseño de la tienda (visual
merchandising), servicio al cliente y CRM (Customer Relationship Management),
entre otros.
•
ESTRATEGIA DE COMERCIO DETALLISTA MULTICANAL: Conocerás las estrategias
que siguen los principales detallistas y su implicación en las ventas. Comprenderás
la metodología para la ubicación de puntos de venta. Aplicarás las estrategias de
publicidad y promoción que se utilizan en el comercio detallista. Además,
aprenderás la nueva tendencia en el retail de administración por categorías.
PPT 1-44 Consumer Behavior
Ignacio J. Vázquez E. © 2007