Insert Chapter Picture Here
Retailing
CHAPTER
13
Marketing
9
Lamb, Hair, McDaniel
Designed by
Eric Brengle
B-books, Ltd.
Prepared by
Deborah Baker
Texas Christian University
Chapter 13
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1
Learning Outcomes
LOI
Discuss the importance of retailing in the
U.S. economy
LO2
Explain the dimensions by which retailers
can be classified
LO3
Describe the major types of retail operations
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Learning Outcomes
LO4
Discuss nonstore retailing techniques
LO5
Define franchising and describe its
two basic forms
LO6
List the major tasks involved in developing
a retail marketing strategy
LO7
Describe new developments in retailing
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LOI
The Role of Retailing
Discuss the importance
of retailing in the U.S. economy
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LOI
The Role of Retailing
Retailing
All the activities directly
related to the sale of goods
and services to the ultimate
consumer for personal,
non-business use.
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LOI
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
 Industry is dominated by a few giant
organizations, such as Wal-Mart
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LOI
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%
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7
LO2
Classifying Retailers
Explain the dimensions by
which retailers can
be classified
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Classification of Retail Operations
Ownership
Level of Service
Product Assortment
Price
LO2
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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
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LO2
10
LO2
Level of Service
Self Service
Factory outlets
Warehouse clubs
Full Service
Discount stores
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Exclusive stores
11
Types of Stores and Their Characteristics
LO2
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
Low
Med-Narrow Low
Low
Restaurant
Low-High
Narrow
Low-High
Low-High
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Price
LO2
Gross
Margin
The amount of money the
retailer makes as a
percentage of sales after
the cost of goods sold is
subtracted.
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LO3
Major Types of Retail Operations
Describe the major types
of retail operations
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LO3
Major Types of Retail Operations
Department Stores
Specialty Stores
Supermarkets
Drugstores
Convenience Stores
Discount Stores
http://www.walgreens.com
Restaurants
Online
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Categories of
Discount Stores
Full-Line
Discounters
Specialty Discount
Stores
Warehouse
Clubs
Off-Price
Discount Retailers
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LO3
16
LO3
Discount Stores
Mass
Merchandising
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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LO3
Discount Stores
Supercenter
Extreme-value
Retailing
Retail store combining
groceries and general
merchandise goods
with a wide range of services.
Smaller stores emphasizing
daily necessities at
rock-bottom prices.
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LO3
Specialty Discount Stores
Category
Killers
Specialty discount stores
that heavily dominate
their narrow merchandise
segment.
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LO3
Department
Stores
REVIEW LEARNING OUTCOME
Types of Retail Operations
Specialty
Stores
Supermarket
Drugstores
Convenience
Stores
Discount
Stores
Restaurants
supercenter
Full-line
extremevalue
Scrambled
Merchandising
Specialty
category
killer
Warehouse
Off-price
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factory
outlet
20
LO4
Nonstore Retailing
Discuss nonstore
retailing techniques
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Nonstore Retailing
Automatic Vending
Direct Retailing
Direct Marketing
Electronic Retailing
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LO4
LO4
Direct Retailing
Door-to-Door
Office-to-Office
Home Sales
Parties
http://www.avon.com
Online
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LO4
Types of Direct Marketing
Direct Mail
Catalogs & Mail Order
Telemarketing
Electronic Retailing
Shop-at-home networks
On-line retailing
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LO4
REVIEW LEARNING OUTCOME
Nonstore Retailing Techniques
Nonstore Retailing
Vending
Direct retailing
Direct marketing
direct mail
catalogs
telemarketing
Electronic retailing
online
shop at home
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LO5
Franchising
Define franchising and
describe its
two basic forms
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LO5
Basic Forms of Franchising
Product and Trade Name
Franchising
Business Format
Franchising
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Franchising
LO5
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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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
LO5
SOURCE: http://www.franchise.org, January 2006.
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LO6
Retail Marketing Strategy
List the major tasks involved
in developing
a retail marketing strategy
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LO6
Retail Marketing Strategy
Define & Select
a Target Market
Develop the
“Six Ps”
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LO6
Defining a Target Market
Demographics
STEP 1:
Segment the Market
Geographics
Psychographics
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LO6
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Choosing the Retailing Mix
LO6
STEP 2:
Choose the
Retailing Mix
Product
Place
Price
Personnel
Promotion
Presentation
http://www.publix.com
Online
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The Retailing Mix
Product
Personnel
Place
Target
Market
Presentation
LO6
Promotion
Price
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LO6
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.
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LO6
Retail Promotion Strategy
Advertising
Public Relations
Publicity
Sales Promotion
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LO6
The Proper Location
Choosing a Community
Choosing a Site
Economic growth
potential
Freestanding Store
Competition
Shopping Center
Geography
Mall
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Important Factors for Site Choice
LO6

Neighborhood
socioeconomics

Traffic flows

Land costs

Zoning regulations

Public transportation

Site’s visibility, parking,
entrances and exits,
accessibility, and safety

Fit with other stores
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LO6 Shopping Center and Mall Locations
Advantages
 Design attracts
shoppers
 Activities and anchor
stores draw customers
 Ample parking
 Unified image
 Sharing of common
area expenses
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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LO6
Retail Prices
Low Price
Good Value
Single Price Point
EDLP
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High Price
Quality
Image
41
LO6
Presentation of the Retail Store
Atmosphere
The overall impression
conveyed by a store’s
physical layout, décor, and
surroundings
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Presentation of the Retail Store
Employee type and density
Merchandise type and density
Fixture type and density
Sound
Odors
http://www.apple.com
Visual factors
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Online
LO6
43
LO6
Personnel and Customer Service
Increase market share among
existing customers
Trading Up
Two Common
Selling
Techniques
Create new products for
Suggestion Selling
present markets
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Customer Service for On-Line Retailers
Easy-to-use Web site
Product availability
Simple returns
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LO6
LO6
REVIEW LEARNING OUTCOME
Developing a Retail Marketing Strategy
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LO7
New Developments in Retailing
Describe new developments
in retailing
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LO7
New Developments in Retailing
Interactivity
Consumers are
involved in the retail
experience.
M-commerce
Purchasing goods
through mobile
devices.
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