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 9 retailing

Chapter 9Retailing


Learning objectives

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

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

Learning objective 1

Define the term marketing

Discuss the importance of retailing to the economy


Retailing

1

Retailing

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


The role of retailing

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

Learning objective 2

Describe four marketing management philosophies.

Explain the dimensions by which retailers can be classified


Classification of retail operations

2

Classification of retail operations

  • Level of service

  • Product assortment

  • Price

  • Gross margin


Ownership

2

Ownership

Classification of ownership:

  • independent retailers

  • chain stores

  • franchises.


Level of service

2

Level of service

Self service

Full service

Factory outlets, warehouse clubs

Discount stores

Exclusive stores


Classification summary

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

Learning objective 3

Describe four marketing management philosophies.

Describe the main types of retail operations


Gross margin

3

Gross margin

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


Major types of retail operations

3

Major types of retail operations

  • Department stores

  • Specialty stores

  • Supermarkets

  • Chemists

  • Convenience stores

  • Discount stores

  • Hypermarket


Categories of discount stores

3

Categories of discount stores

  • Full-line discounters

  • Discount specialty stores

  • Hypermarket

  • Category killers


Mass merchandising

3

Mass merchandising

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


Restaurants

3

Restaurants

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


Learning objective 4

Learning objective 4

Discuss non-store retailing techniques


Non store retailing

4

Non-store retailing

  • Automatic vending

  • Direct retailing

  • Direct marketing

  • Electronic retailing


Direct retailing

4

Direct retailing

Direct retailers sell products through:

  • door-to-door

  • office-to-office

  • home sales parties.


Direct marketing

4

Direct marketing

  • Direct mail

  • Catalogues and mail order

  • Telemarketing

  • Electronic retailing


Learning objective 5

Learning objective 5

Define franchising and describe its two basic forms


Basic forms of franchising

4

Basic forms of franchising

  • Product and trade name franchising

  • Business format franchising


Basic forms of franchising1

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

Learning objective 6

List the main tasks involved in developing a retail marketing strategy


Retail marketing strategy

6

Retail marketing strategy

Key tasks in strategic retailing:

  • define and select a target market

  • develop the ‘six Ps’


Defining a target market

6

Defining a target market

Step 1: Segment the market

  • Demographics

  • Geographics

  • Psychographics


Choosing the retailing mix

6

Choosing the retailing mix

Step 2: Choose the retailing mix

  • Product

  • Place

  • Price

  • Personnel

  • Promotion

  • Presentation


The retailing mix

6

The retailing mix

Product

Personnel

Promotion

Targetmarket

Presentation

Place

Price


Product offering

6

Product offering

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


Retail promotion strategy

6

Retail promotion strategy

  • Advertising

  • Public relations

  • Publicity

  • Sales promotion


The proper location

6

The proper location

  • Large, long-term commitment of resources

  • Location will affect future growth

  • Local environment may change over time


Location

6

Location

  • Freestanding store

  • Shopping centre


Price

6

Price

Low price

High price

Good value

Quality image


Presentation of the retail store

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


Personnel and customer service

6

Personnel and customer service

Two common selling techniques:

  • trading up

  • suggestive selling.


Learning objective 7

Learning objective 7

Discuss the challenges of expanding retailing operations into global markets


Global retailing

7

Global retailing

Reasons for global expansion

  • Spread of communication and mass media

  • Growth potential of undeserved markets

  • Lowering of trade barriers and tariffs


Global retailing cont

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.


Global retailing cont1

7

Global retailing (cont.)

Prerequisites for going global:

  • secure domestic position

  • long-term perspective

  • consistent global and corporate strategies.


Learning objective 8

Learning objective 8

Describe future trends in retailing


Trends in retailing

8

Trends in retailing

  • Entertainment

  • Convenience and efficiency

  • Customer management


Customer management

8

Customer management

Customer management strategies

  • Customer relationship marketing

  • Loyalty programs

  • Developing clientele


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