Chapter 9 retailing
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Chapter 9 Retailing. Learning objectives. 1 Discuss the importance of retailing to the economy 2 Explain the dimensions by which retailers can be classified 3 Describe the main types of retail operations 4 Discuss non-store retailing techniques. Learning objectives (cont.).

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Chapter 9 Retailing

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Chapter 9Retailing


Learning objectives

1Discuss the importance of retailing to the economy

2Explain the dimensions by which retailers can be classified

3Describe the main types of retail operations

4Discuss non-store retailing techniques


Learning objectives (cont.)

5Define franchising and describe its two basic forms

6List the main tasks involved in developing a retail marketing strategy

7Discuss the challenges of expanding retailing operations into global markets

8Describe future trends in retailing


Learning objective 1

Define the term marketing

Discuss the importance of retailing to the economy


1

Retailing

All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use.


1

The role of retailing

  • Retailing is one of the largest employers

  • Supermarkets and grocery stores account for 23% of total retail income

  • Small business made up 95% of retail business, but only 38% of total retail income


Learning objective 2

Describe four marketing management philosophies.

Explain the dimensions by which retailers can be classified


2

Classification of retail operations

  • Level of service

  • Product assortment

  • Price

  • Gross margin


2

Ownership

Classification of ownership:

  • independent retailers

  • chain stores

  • franchises.


2

Level of service

Self service

Full service

Factory outlets, warehouse clubs

Discount stores

Exclusive stores


2

Classification summary

Type of retailer

Service level

Assortment

Price

Grossmargin

Mod-High

Mod high-High

Broad

Mod-High

Department store

Specialty store

High

Narrow

Mod-High

High

Supermarket

Low

Broad

Moderate

Low

Convenience store

Low

Med-Narrow

Mod-High

Mod-High

Chemist

Low-Mod

Medium

Moderate

Low

Full-line discounter

Mod-Low

Med-Broad

Mod-Low

Mod-Low

Specialty discounter

Mod-Low

Med-Broad

Mod low-Low

Mod-Low

Off-price retailer

Low

Med-Narrow

Low

Low

Restaurant

Low-High

Med-Narrow

Low-High

Low-High


Learning objective 3

Describe four marketing management philosophies.

Describe the main types of retail operations


3

Gross margin

The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted.


3

Major types of retail operations

  • Department stores

  • Specialty stores

  • Supermarkets

  • Chemists

  • Convenience stores

  • Discount stores

  • Hypermarket


3

Categories of discount stores

  • Full-line discounters

  • Discount specialty stores

  • Hypermarket

  • Category killers


3

Mass merchandising

Retailing strategy using moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products.


3

Restaurants

Restaurants can also be classified as specialty retailers, given the concentration of their product offering


Learning objective 4

Discuss non-store retailing techniques


4

Non-store retailing

  • Automatic vending

  • Direct retailing

  • Direct marketing

  • Electronic retailing


4

Direct retailing

Direct retailers sell products through:

  • door-to-door

  • office-to-office

  • home sales parties.


4

Direct marketing

  • Direct mail

  • Catalogues and mail order

  • Telemarketing

  • Electronic retailing


Learning objective 5

Define franchising and describe its two basic forms


4

Basic forms of franchising

  • Product and trade name franchising

  • Business format franchising


5

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.


Learning objective 6

List the main tasks involved in developing a retail marketing strategy


6

Retail marketing strategy

Key tasks in strategic retailing:

  • define and select a target market

  • develop the ‘six Ps’


6

Defining a target market

Step 1: Segment the market

  • Demographics

  • Geographics

  • Psychographics


6

Choosing the retailing mix

Step 2: Choose the retailing mix

  • Product

  • Place

  • Price

  • Personnel

  • Promotion

  • Presentation


6

The retailing mix

Product

Personnel

Promotion

Targetmarket

Presentation

Place

Price


6

Product offering

The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix.


6

Retail promotion strategy

  • Advertising

  • Public relations

  • Publicity

  • Sales promotion


6

The proper location

  • Large, long-term commitment of resources

  • Location will affect future growth

  • Local environment may change over time


6

Location

  • Freestanding store

  • Shopping centre


6

Price

Low price

High price

Good value

Quality image


6

Presentation of the retail store

Factors in creation of a store’s atmosphere:

  • employee type and density

  • merchandise type and density

  • fixture type and density

  • sound

  • odours

  • visual factors


6

Personnel and customer service

Two common selling techniques:

  • trading up

  • suggestive selling.


Learning objective 7

Discuss the challenges of expanding retailing operations into global markets


7

Global retailing

Reasons for global expansion

  • Spread of communication and mass media

  • Growth potential of undeserved markets

  • Lowering of trade barriers and tariffs


7

Global retailing (cont.)

Factors used to analyse global retail markets:

  • market size and economics

  • infrastructure and distribution

  • competition

  • operations

  • financial and tax reporting

  • merchandise acceptability

  • partnering capability.


7

Global retailing (cont.)

Prerequisites for going global:

  • secure domestic position

  • long-term perspective

  • consistent global and corporate strategies.


Learning objective 8

Describe future trends in retailing


8

Trends in retailing

  • Entertainment

  • Convenience and efficiency

  • Customer management


8

Customer management

Customer management strategies

  • Customer relationship marketing

  • Loyalty programs

  • Developing clientele


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