Retailing
Chapter 13
Prepared by
Deborah Baker
Texas Christian University
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
1
Learning Objectives
1. Discuss the importance of retailing in the
U.S. economy.
2. Explain the dimensions by which retailers
can be classified.
3. Describe the major types of retail
operations.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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Learning Objectives (continued)
4. Discuss nonstore retailing techniques.
5. Define franchising and describe its two
basic forms.
6. List the major tasks involved in developing
a retail marketing strategy.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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Learning Objectives (continued)
7. Discuss the challenges of expanding
retailing operations into global markets.
8. Describe future trends in retailing.
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©2004 South-Western College Publishing
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1
Learning Objective
On Line
http://www.target.com
http://www.walmart.com
http://www.sears.com
Discuss the
importance of
retailing in the
U.S. economy.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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1
Retailing
All the activities directly
related to the sale of goods
and services to the ultimate
consumer for personal,
non-business use.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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1
The Role of Retailing
 Retailing is one of the largest
employers
 Retailers ring up almost a third of
the U.S. GDP
 Industry is dominated by a
few giant organizations,
such as Wal-Mart
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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Ten Largest
U.S. Retailers
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2
Learning Objective
Explain the
dimensions by
which retailers
can be classified.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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2
Classification of Retail Operations
Ownership
Level of Service
Classification
of
Retail
Establishments
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
Product Assortment
Price
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2
Classification of Ownership
Independent
Retailers
Chain Stores
Franchises
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2
Level of Service
Self Service
Factory outlets
Discount stores
Warehouse clubs
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©2004 South-Western College Publishing
Full Service
Exclusive stores
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Types of Stores and
Their Characteristics
2
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-lower
Off-price Retailer
Low
Med-Narrow Low
Low
Restaurant
Low-High
Med-Narrow Low-High
Low-High
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
Low
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Gross Margin
The amount of money the
retailer makes as a
percentage of sales after
the cost of goods sold is
subtracted.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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3
Learning Objective
Describe the major
types of retail
operations.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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3
Major Types of Retail Operations
On Line
http://www.walgreens.com
Department Stores
Specialty Stores
Supermarkets
Drugstores
Convenience Stores
Discount Stores
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
Restaurants
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3
Categories of Discount Stores
Full-Line
Discounters
Categories
of Discount
Stores
Discount Specialty
Stores
Warehouse
Clubs
Off-Price
Discount Retailers
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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Mass Merchandising
Retailing strategy using
moderate to low prices on
large quantities of
merchandise and lower
service to stimulate high
turnover of products.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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3
Hypermarket and Supercenter
Hypermarket
A large retail store combining
a supermarket and
a full-line discount store.
Supercenter
Retail store combining groceries
and general merchandise goods
with a wide range of services.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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4
Learning Objective
Discuss nonstore
retailing techniques.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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4
Nonstore Retailing
Automatic Vending
Direct Retailing
Major Forms
of
Nonstore
Retailing
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
Direct Marketing
Electronic Retailing
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4
Direct Retailing
Direct Retailers
sell products:
Home Sales
Parties
Door-to-Door
Office-toOffice
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©2004 South-Western College Publishing
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Direct Marketing
On Line
http://www.avon.com
Direct Mail
Types
of
Direct
Marketing
Catalogs & Mail Order
Telemarketing
Electronic Retailing
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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4
Electronic Retailing
On Line
http://www.gap.com
http://www.jcrew.com
Types
of
Electronic
Retailing
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
Shop-at-Home Networks
On-Line Retailing
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5
Learning Objective
Define franchising
and describe its two
basic forms.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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5
Basic Forms of Franchising
On Line
http://www.sylvanlearning.com
Basic Forms
of
Franchising
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©2004 South-Western College Publishing
Product and Trade Name
Franchising
Business Format
Franchising
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5
Largest U.S. Franchisers
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©2004 South-Western College Publishing
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Basic Forms of Franchising
Product and
Trade Name
Franchising
Dealer agrees to sell certain
products provided by a
manufacturer or wholesaler.
Business
Format
Franchising
An ongoing business relationship
between a franchiser
and a franchisee.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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6
Learning Objective
List the major tasks
involved in
developing a retail
marketing strategy.
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©2004 South-Western College Publishing
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Retail Marketing Strategy
Key Tasks
in
Strategic
Retailing
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
Define & Select
a Target Market
Develop the “Six Ps”
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Defining a Target Market
Demographics
STEP 1:
Segment the Market
Geographics
Psychographics
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Choosing the Retailing Mix
STEP 2:
Choose the
Retailing Mix
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
Product
Place
Price
Personnel
Promotion
Presentation
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The Retailing Mix
Product
Personnel
Promotion
Target
Market
Presentation
Place
Price
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©2004 South-Western College Publishing
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Product Offering
On Line
http://www.kroger.com
The mix of products offered
to the consumer by the
retailer; also called the
product assortment or
merchandise mix.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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Retail Promotion Strategy
Advertising
Public Relations
Publicity
Retail
Promotion
Strategy
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
Sales Promotion
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Factors to Consider in Site Selection
Economic growth
potential
Area competition
Geography
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©2004 South-Western College Publishing
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Location Decisions
On Line
http://www.mallofamerica.com
Freestanding Store
Shopping Center
Tenant
Mall Tenant
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©2004 South-Western College Publishing
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Shopping Center and
Mall Locations
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Advantages
Disadvantages
 Design attracts
shoppers
 Activities and anchor
stores draw
customers
 Ample parking
 Unified image


Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing



Expensive leases
Failure of common
promotion efforts
Lease restrictions
Anchor store
domination
Direct competitors
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6
Price
Low Price
Good Value
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
High Price
Quality
Image
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6
Presentation of the Retail Store
Employee Type & Density
Merchandise Type & Density
Fixture Type & Density
Factors
in
Creating
Store’s
Atmosphere
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
Sound
Odors
Visual Factors
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6
Personnel and Customer Service
Trading Up
Two Common
Selling
Techniques
Suggestive Selling
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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Customer Service for
On-Line Retailers
6
Easy-to-use Web Site
Product Availability
Simple Returns
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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7
Learning Objective
Discuss the
challenges of
expanding retailing
operations into
global markets.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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The Top Ten
Global Retailers
7
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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Global Retailing
Reasons for
Global Expansion
Spread of
communication
and mass media
Growth potential
in underserved
markets
Lowering of trade
barriers and
tariffs
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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Factors Used to Analyze
Global Retail Markets
7
Market Size & Economics
Infrastructure & Distribution
Competition
Operations
Financial & Tax Reporting
Merchandise Acceptability
Partnering Capability
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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Global Retailing
On Line
http://www.walmartstores.com
Secure
Domestic
Position
Long-Term
Perspective
Prerequisites for
Going Global
Consistent
Global and
Corporate
Strategies
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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8
Learning Objective
Describe future
trends in retailing.
Chap. 13 Marketing 7e Lamb Hair McDaniel
©2004 South-Western College Publishing
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Trends in Retailing
Entertainment
Trends in
Retailing
Convenience
and Efficiency
Customer Management
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©2004 South-Western College Publishing
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Customer Management Strategies
Customer Relationship
Marketing
Loyalty
Programs
Clienteling
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©2004 South-Western College Publishing
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