2nd FACE-TO-FACE MEETINGPJJ

MGM 4254JULY 2010

Overview

Step 1: investigate alternative trading areas

Step 2: determine what type of location is desirable

Step 3: select the general locationStep 4: evaluate alternative specific

store sites

Chpt 9Trading-Area Analysis

To demonstrate the importance of store location for a retailer and outline the process for choosing a store location

To discuss the concept of a trading area and its related components

To show how trading areas may be delineated for existing and new stores

Criteria to consider include

population size and traitscompetitiontransportation accessparking availabilitynature of nearby storesproperty costslength of agreementlegal restrictions

Choosing a Store Location

Step 1: Evaluate alternate geographic (trading)areas in terms of residents and existing retailers

Step 3: Select the location type

Step 2: Determine whether to locate as anisolated store or in a planned shopping center

Step 4: Analyze alternate sites contained in the specific retail location type

Figure 9.5 The Segments of a Trading Area

Table 9.1 Chief Factors to Consider in Evaluating Retail Trading Areas

• Total size and density• Age distribution• Average educational

level• Percentage of residents

owning homes

• Total disposable income• Per capita disposable

income• Occupation distribution• Trends

Population Size and Characteristics

Figure 9.8 Analyzing

Retail Trading Areas

Chp 10Site Selection

To thoroughly examine the types of locations available to a retailer: isolated store, unplanned business district, and planned shopping center

To note the decisions necessary in choosing a general retail location

To describe the concept of one-hundred percent locationTo discuss several criteria for evaluating general retail

locations and the specific sites within them To contrast alternative terms of occupancy

3 Types of Locations

IsolatedStore

PlannedShopping

Center

UnplannedBusinessDistrict

Isolated Stores

Advantages* No competition* Low rental costs* Flexibility* Good for

convenience stores

* Better visibility* Adaptable

facilities* Easy parking

Disadvantages* Difficulty attracting

customers* Travel distance* Lack of variety for

customers* High advertising

expenses* No cost sharing* Restrictive zoning

laws

Unplanned Business Districts

Central BusinessDistrict

SecondaryBusinessDistrict

NeighborhoodBusinessDistrict

StringDistrict

Planned Shopping Centers

Advantages* Well-rounded assortments* Strong suburban

population* One-stop, family shopping* Cost sharing* Transportation access* Pedestrian traffic

Disadvantages* Limited flexibility* Higher rent* Restrictions on offerings* Competitive environment* Requirements for

association memberships* Too many malls* Domination by anchor stores

Figure 10.7 Location/ Site

Evaluation Checklist

Chp 11 Retail Organization and Human Resource Management

To study the procedures involved in setting up a retail organization

To examine the various organizational arrangements utilized in retailing

To consider the special human resource environment of retailing

To describe the principles and practices involved with the human resource management process in retailing

Figure 11.1 Planning and Assessing a Retail Organization: Factors to Consider

Figure 11.1 Planning and Assessing a Retail Organization: Factors to Consider

Figure 11.1 Planning and Assessing a Retail Organization: Factors to Consider

Figure 11.3 Division of Tasks in a Distribution Channel

Grouping Tasks into JobsTASKS JOBS

Displaying merchandise, customer contact, gift wrapping, customer follow-up

Sales personnel

Entering transaction data, handling cash and credit purchases, gift wrapping

Cashier

Receiving merchandise, checking incoming shipments, marking merchandise, inventory storage and control, returning merchandise to vendors

Inventory personnel

Window dressing, interior display setups, use of mobile displays Display personnel

Billing customers, credit operations, customer research Credit personnel

Merchandise repairs and alterations, complaint resolution, customer research

Customer service personnel

Cleaning store, replacing old fixtures Janitorial personnel

Personnel management, sales forecasting, budgeting, pricing, coordinating tasks

Management personnel

Figure 11.4 A Job Description for a Store Manager

Table 11.1 Principles for Organizing a Retail Firm

Show interest in employees Monitor employee turnover, lateness, and absenteeism Trace line of authority from top to bottom Limit span of control Empower employees Delegate authority while maintaining responsibility Acknowledge need for coordination and

communication Recognize the power of informal relationships

Figure 11.5 Different Forms of Retail Organization

Figure 11.5 Different Forms of Retail Organization

Figure 11.5 Different Forms of Retail Organization

Figure 11.5 Different Forms of Retail Organization

Figure 11.6 Organization Structures Used by Small Independents

Figure 11.7 The Basic

Mazur Organization

Plan for Department

Stores

Figure 11.8 The

Equal-Store Organizational

Format Used by Chain Stores

Human Resource Management in Retailing

RecruitingSelectingTrainingCompensatingSupervising

Chp 12Operations Management: Financial Dimensions

To define operations managementTo discuss profit planningTo describe asset management, including the

strategic profit model, other key business ratios, and financial trends in retailing

To look at retail budgetingTo examine resource allocation

Major Components of a Profit-and-Loss Statement

• Net Sales• Cost of Goods Sold• Gross Profit (Margin)• Operating Expenses• Taxes• Net Profit After Taxes

Net Sales $330,000CGS $180,000Gross Profit $150,000Operating Expenses

$ 95,250

Other Costs $ 20,000Total Costs $115,250Net Profit before Taxes

$ 34,750

Taxes $ 15,500Net Profit after Taxes

$ 19,250

Asset Management

The Balance Sheet– Assets– Liabilities– Net Worth– Net Profit Margin– Asset Turnover– Return on Assets– Financial Leverage

Financial Trends in Retailing

Slow growth in U.S. economyFunding sourcesMergers, consolidations, spinoffsBankruptcies and liquidationsQuestionable accounting and financial

reporting practices

Budgeting

Budgeting outlines a retailer’s planned expenditures for a given time based on expected performance

Costs are linked to satisfying target market, employee, and management goals

Budget Benefits

Expenditures are related to expected performance Costs can be adjusted as goals are revised Resources are allocated to the right areas Spending is coordinated Planning is structured and integrated Cost standards are set Expenditures are monitored during a budget cycle Planned budgets versus actual budgets can be compared Costs/performance can be compared with industry

averages

Cost Categories

Capital expendituresFixed costsDirect costsNatural account expenses

Resource Allocation

• Capital Expenditures– Long-term

investments in fixed assets

• Operating Expenditures– Short-term selling

and administrative costs in running a business

Chp 13Operations Management: Operational Dimensions

To describe the operational scope of operations management

To examine several specific aspects of operating a retail business: operations blue-print; store format, size, and space allocation; personnel utilization; store maintenance, energy management, and renovations; inventory management; store security; insurance; credit management; computerization; outsourcing; and crisis management

Operational Decisions

What operating guidelines are used?What is the optimal format and size of a

store? What is the relationship among shelf space, shelf location, and sales for each item in the store?

How can personnel be matched to customer traffic flows? Would increased staffing improve or reduce productivity? What impact does self-service have on sales?

Operational Decisions_2

What effect does the use of various building materials have on store maintenance? How can energy costs be better controlled? How often should facilities be renovated?

How can inventory best be managed?How can the personal safety of shoppers

and employees be ensured?

Operational Decisions_3What levels of insurance are required?How can credit transactions be managed most

effectively?How can computer systems improve operating

efficiency?Should any aspects of operations be

outsourced?What kind of crisis management plans should

be in place?

Operating A Retail Business

Operations Blueprint Store Format, Size, and Space Allocation Personnel Utilization Store Maintenance, Energy Management, and Renovations Inventory Management Store Security Insurance Credit Management Computerization Outsourcing Crisis Management

Inventory Management Decisions

How can handling of merchandise from different suppliers be coordinated?

How much inventory should be on the sales floor versus in a warehouse or storeroom?

How often should inventory be moved from nonselling to selling areas of a store?

What inventory functions can be done during nonstore hours? What are the trade-offs between faster supplier delivery and higher

shipping costs? What supplier support is expected in storing merchandise or setting up

displays? What level of in-store merchandise breakage is acceptable? Which items require customer delivery? When? By whom?

Credit Management Decisions

What form of payment is acceptable?Who administers the credit plan?What are customer eligibility requirements

for a check or credit purchase?What credit terms will be used?How are late payments or nonpayments to

be handled?

Crisis Management

There should be contingency plans for as many different types of crisis situations as possible

Essential information should be communicated to all affected parties as soon as the crisis occurs

Cooperation – not conflict – among the involved parties is essential

Responses should be as swift as feasible The chain of command should be clear and decision

makers given adequate authority

Chp 14Developing Merchandise Plans

• To demonstrate the importance of a sound merchandising philosophy

• To study various buying organization formats and the processes they use

• To outline the considerations in devising merchandise plans: forecasts, innovativeness, assortment, brands, timing, and allocation

• To discuss category management and merchandising software

Merchandising

Activities involved in acquiring particular goods and/or services and making them available at the places, times, and prices and in the quantity that enable a retailer to reach its goals.

Merchandising Philosophy

• Sets the guiding principles for all the merchandise decisions that a retailer makes

• Should reflect – Target market desires– Retailer’s institutional type– Market-place positioning– Defined value chain– Supplier capabilities– Costs– Competitors– Product trends

Scope of Responsibility

• Full array of merchandising functions– Buying and selling – Selection, pricing, display, customer transactions

• Focus on buying function only

Functions Performed

• Merchandising view– All buying and selling functions

• Assortments• Advertising pricing• Point-of-sale displays• Employee utilization• Personal selling approaches

Functions Performed• Buying view

– Buyers manage buying functions• Buying• Advertising• Pricing

– In-store personnel manage other functions• Assortments• Point-of-sale displays• Employee utilization• Personal selling approaches

Figure 14.4 Merchandising

Versus Store Management Career Tracks

Figure 14.5 Considerations in Devising Merchandise Plans

Types of Merchandise

• Staple merchandise• Assortment merchandise• Fashion merchandise• Seasonal merchandise• Fad merchandise

Table 14.1a Factors to Bear in Mind When Planning Merchandise Innovativeness

FACTOR RELEVANCE for PLANNING

Target market(s) Evaluate whether the target market is conservative or innovative

Goods/ service growth potential

Consider each new offering on the basis of rapidity of initial sales, maximum sales potential per time period, and length of sales life

Fashion trends Understand vertical and horizontal fashion trends, if appropriate

Retailer image Carry goods/ services that reinforce the firm’s image

Table 14.1b Factors to Bear in Mind When Planning Merchandise Innovativeness

FACTOR RELEVANCE for PLANNING

Competition Lead or follow competition in the selection of new goods/services

Customer segments Segment customers by dividing merchandise into established-product displays and new-product displays

Responsiveness to consumers

Carry new offerings when requested by the target market

Amount of investment

Consider all possible investment for each new good/service: product costs, new fixtures, and additional personnel

Table 14.1c Factors to Bear in Mind When Planning Merchandise Innovativeness

FACTOR RELEVANCE for PLANNING

Profitability Assess each new offering for potential profits

Risk Be aware of the possible tarnishing of the retailer’s image, investment costs, and opportunity costs

Constrained decision making

Restrict franchisees and chain branches from buying certain items

Declining goods/ services

Delete older goods/services if sales and/or profits are too low

Structured Guidelines for Pruning Products

• Select items for possible elimination on the basis of declining sales, prices, and profits, appearance of substitutes

• Gather and analyze detailed financial and other data about these items

• Consider nondeletion strategies such as cutting costs, revising promotion efforts, adjusting prices, and cooperating with other retailers

• After making a deletion decision, do not overlook timing, parts and servicing, inventory, and holdover demand

Table 14.2a Factors to Consider When Planning Merchandise Quality

FACTOR RELEVANCE for PLANNING

Target market(s) Match merchandise quality to the wishes of the desired target market(s)

Competition Sell similar quality or different quality

Retailer’s image Relate merchandise quality directly to the perception that customers have of retailer

Store location Consider the impact of location on the retailer’s image and the number of competitors, which, in turn, relate to quality

Table 14.2b Factors to Consider When Planning Merchandise Quality

FACTOR RELEVANCE for PLANNING

Profitability Recognize that high quality goods generally bring greater profit per unit than lesser-quality goods; turnover may cause total profits to be greater for the latter

Manufacturer versus private brands

Understand that, for many, manufacturer brands connote higher quality than private brands

Customer services offered

Know that high-quality goods require personal selling, alterations, delivery, and so on

Personnel Employ skilled, knowledgeable personnel for high-quality merchandise

Table 14.2c Factors to Consider When Planning Merchandise Quality

FACTOR RELEVANCE for PLANNING

Perceived goods/ service benefits

Analyze consumers. Lesser quality goods attract customers who desire functional product benefits; High-quality goods attract customers who desire extended product benefits

Constrained decision making

Face reality. Franchises or chain store managers have limited or no control over products; Independent retailers that buy from a few large wholesalers are limited to the range of quality offered by those wholesalers

Figure 14.9 Retail

Assortment Strategies

Brands

Private(dealer or store)

Manufacturer(national)

Generic

Chp 15Implementing Merchandise Plans

• To describe the steps in the implementation of merchandise plans: gathering information, selecting and interacting with merchandise sources, evaluation, negotiation, concluding purchases, receiving and stocking merchandise, reordering, and re-evaluation

• To examine the prominent roles of logistics and inventory management in the implementation of merchandise plans

Figure 15.1 The Process for Implementing Merchandise Plans

Selecting Merchandise Sources

• Company-owned• Outside, regularly used supplier• Outside, new supplier

Figure 15.4 A Checklist

of Points

to Review in

Choosing Vendors

Concluding Purchases• The retailer takes title immediately on purchase• The retailer assumes ownership after titles are loaded onto

the mode of transportation• The retailer takes title when a shipment is received• The retailer does not take title until the end of a billing cycle,

when the supplier is paid• The retailer accepts merchandise on consignment and does

not own the items. The supplier is paid after merchandise is sold

Reordering Merchandise

• Four critical factors:– Order and delivery time– Inventory turnover– Financial outlays– Inventory versus ordering costs

Performance Goals• Relate costs incurred to specific logistics activities• Place and receive orders as easily, accurately, and

satisfactorily as possible• Minimize the time between ordering and receiving

merchandise• Coordinate shipments from various suppliers• Have enough merchandise on hand to satisfy customer

demand, without having so much inventory that heavy markdowns will be necessary

Performance Goals_2• Place merchandise on the sales floor efficiently• Process customer orders efficiently and in a manner

satisfactory to customers• Work collaboratively and communicate regularly with other

supply chain members• Handle returns effectively and minimize damaged products• Monitor logistics’ performance• Have backup plans in case of breakdowns in the system

Problems Balancing Inventory Levels

• The retailer wants to be appealing and never lose a sale by being out of stock; it does not want to be “stuck” with excess merchandise

• What fad merchandise and how much should be carried?• Customer demand is never completely predictable• Shelf space allocation should be linked to current revenues

Chp 16Financial Merchandise Management

• To describe the major aspects of financial merchandise planning and management

• To explain the cost and retail methods of accounting• To study the merchandise forecasting and budgeting

process• To examine alternative methods of inventory unit

control• To integrate dollar and unit merchandising control

concepts

Financial Merchandise Management

• A retailer specifies which products are purchased, when products are purchased, and how many products are purchased– Dollar control involves planning and monitoring a

retailer’s financial investment in merchandise over a stated period

– Unit control relates to the quantities of merchandise a retailer handles during a stated period

Table 16.1 Handy Hardware Store Profit-and-Loss Statement

Sales $417,460

Less cost of goods sold: $ 44,620

Beginning inventory (at cost) 289,400

Purchases (at cost) 2,600

Transportation charges $336,620

Merchandise available for sale 90,500

Ending inventory (at cost) $246,120

Cost of goods sold $171,340

Gross profit

Less operating expenses:

Salaries $ 70,000

Advertising 25,000

Rental 16,000

Other 26,000

Total operating expenses 137,000

Net profit before taxes $ 34,340

Benefits of Financial Merchandise Plans

• A buyer’s performance is rated. Measures may be used to set standards

• Stock shortages are determined and bookkeeping errors and pilferage are uncovered

• Slow-moving items are classified – leading to increased sales efforts or markdowns

• A proper balance between inventory and out-of-stock conditions is maintained

Inventory Accounting Systems

• The cost accounting system values merchandise at cost plus inbound transportation charges

• The retail accounting system values merchandise at current retail prices

Cost Method of Accounting

• The cost to the retailer of each item is recorded on an accounting sheet and/or is coded on a price tag or merchandise container

• Can be used with physical or book inventories:– Physical inventory – actual merchandise count– Book inventory - recordkeeping

Physical Inventory System

• Ending inventory - recorded at cost – is measured by counting the merchandise in stock at the close of a selling period

• Gross profit is not computed until ending inventory is valued

• Gross profit derived during full merchandise count

Book Inventory System

• Keeps a running total of the value of all inventory on hand at cost at a given time

• End-of-month inventory values can be computed without a physical inventory

• Frequent financial statements can be prepared

Disadvantages of Cost-Based Inventory Systems

• Requires that a cost be assigned to each item in stock

• Do not adjust inventory values to reflect style changes, end-of-season markdowns, or sudden surges of demand

Figure 16.1 Applying FIFO

and LIFO Inventory Methods

Table 16.2 Handy Hardware Store Perpetual Inventory System

Date Beginning-of-Month Inventory

Net Monthly Purchases

Monthly Sales End-of-Month Inventory

7/1/03 $90,500 $40,000 $ 62,400 $68,100

8/1/03 68,100 28,000 38,400 57,700

9/1/03 57,700 27,600 28,800 56,500

10/1/03 56,500 44,000 28,800 71,700

11/1/03 71,700 50,400 40,800 81,300

12/1/03 81,300 15,900 61,200 36,000

TOTAL $205,900 $260,400 (as of 12/31/03)

The Retail Method

• Closing inventory is determined by calculating the average relationship between the cost and retail values of merchandise available for sale during a period

Determining Ending Inventory Value

• 1. Calculating the cost complement• 2. Calculating deductions from retail value• 3. Converting retail inventory value to cost

Table 16.3 Handy Hardware Store, Calculating Merchandise Available for Sale

at Cost and at Retail

At Cost At Retail

Beginning Inventory $ 90,500 $139,200

Net Purchases 205,900 340,526

Additional Markups __ 16,400

Transportation Charges 3,492 __

Total Merchandise Available $299,892 $496,126

Table 16.4 Handy Hardware Store, Computing Ending Retail Book Value

Merchandise available for sale (at retail) $496,126 Less deductions: Sales $422,540

Markdowns 11,634

Employee discounts 2,400

Total deductions 436,574

Ending retail book value of inventory $ 59,552

Table 16.5 Handy Hardware Store, Computing Stock Shortages and Adjusting Retail Book Value

Ending retail book value of inventory $ 59,552

Physical inventory (at retail) 56,470

Stock shortages (at retail) 3,082

Adjusted ending retail book value of inventory $ 56,470

Table 16.6 Handy Hardware Store, Profit-and-Loss Statement

Sales $422,540

Less cost of goods sold:

Total merchandise available for sale

$299,892

Adjusted ending inventory 34,136

Cost of goods sold $265,756

Gross profit $156,784

Less operating expenses:

Salaries $ 70,000

Advertising 25,000

Rental 16,000

Other 28,000

Total operating expenses 139,000

Net profit before taxes $ 17,784

Advantages of the Retail Method

• Valuation errors are reduced when conducting a physical inventory since merchandise value is recorded at retail and costs do not have to be decoded

• Because the process is simpler, a physical inventory can be completed more often

• Profit-and-loss statement can be based on book inventory• Method gives an estimate of inventory throughout the year

and is accepted in insurance claims

Limitations of the Retail Method

• Bookkeeping burden of recording data• Ending book inventory figures correctly computed only if the

following are accurate:– Value of beginning inventory– Purchases– Shipping charges– Markups– Markdowns– Employee discounts– Transfers– Returns– Sales

• Cost complement is an average based on the total cost of merchandise available for sale and total retail value

Figure 16.3 A Checklist to

Reduce Inventory Shortages Due to

Clerical and Handling Errors

Figure 16.6a How Stockouts May Occur

Figure 16.6b How Stockouts May Occur

Figure 16.7 Economic Order Quantity

Chp 17Pricing in Retailing

• To describe the role of pricing in a retail strategy and to show that pricing decisions must be made in an integrated and adaptive manner

• To examine the impact of consumers; government; manufacturers, wholesalers, and other suppliers; and current and potential competitors on pricing decisions

• To present a framework for developing a retail price strategy: objectives, broad policy, basic strategy, implementation, and adjustments

Pricing Options for Retailers

• Discount orientation• At-the-market orientation• Upscale orientation

Figure 17.2 Factors Affecting Retail Price Strategy

Figure 17.5 Specific

Pricing Objectives from

Which Retailers May

Choose

Price Strategy

• Demand-Oriented Pricing• Cost-Oriented Pricing• Competition-Oriented Pricing

Demand-Oriented Pricing

• Psychological pricing– Price-quality association– Prestige pricing

Integration of Approaches to Price Strategy

• If prices are reduced, will revenues increase greatly? (Demand orientation)

• Should different prices be charged for a product based on negotiations with customers, seasonality, and so on? (Demand orientation)

• Will a given price level allow a traditional markup to be attained? (Cost orientation)

• What price level is necessary for a product requiring special costs in purchasing, selling, or delivery? (Cost orientation)

• What price levels are competitors setting? (Competitive orientation)

• Can above-market prices be set due to a superior image? (Competitive orientation)

Figure 17.7 A Checklist of Selected Specific Pricing Decisions

Price Strategy Concepts

• Customary Pricing– Everyday Low Pricing

• Variable Pricing– Yield Management Pricing

• One-Price Policy

• Flexible Pricing– Contingency Pricing

• Odd Pricing• Leader Pricing• Multiple-Unit Pricing• Price Lining

Price Adjustments

• Adaptive mechanism– Markdown– Additional markup– Employee discount

Chp 18Establishing and Maintaining A

Retail Image

• To show the importance of communicating with customers and examine the concept of retail image

• To describe how a retail store image is related to the atmosphere it creates via its exterior, general interior, layout, and displays, and to look at the special case of non-store atmospherics

• To discuss ways of encouraging customers to spend more time shopping

• To consider the impact of community relations on a retailer’s image

Figure 18.2 The Elements of a Retail Image

Figure 18.4 The Elements of Atmosphere

Exterior Planning

• Storefront• Marquee• Store entrances• Display windows• Exterior building height• Surrounding stores and area• Parking facilities

General Interior

• Flooring• Colors• Lighting• Scents• Sounds• Store fixtures• Wall textures• Temperature• Aisle space

• Dressing facilities• In-store transportation

(elevator, escalator, stairs)• Dead areas• Personnel• Merchandise• Price levels• Displays• Technology• Store cleanliness

Allocation of Floor Space

• Selling space• Merchandise space• Personnel space• Customer space

Figure 18.8 How a Supermarket Uses a Straight (Gridiron) Traffic Pattern

Figure 18.9 How a

Department Store Uses a Curving (Free-Flowing) Traffic Pattern

Straight Traffic Pattern

Advantages• An efficient atmosphere is created• More floor space is devoted to product displays• People can shop quickly• Inventory control and security are simplified• Self-service is easy, thereby reducing labor costs

Disadvantages• Impersonal atmosphere• More limited browsing by customers• Rushed shopping behavior

Curving Traffic PatternAdvantages• A friendly atmosphere• Shoppers do not feel rushed• People are encouraged to walk through in any direction• Impulse or unplanned purchases are enhanced

Disadvantages• Possible customer confusion• Wasted floor space• Difficulties in inventory control• Higher labor intensity• Potential loitering• Displays may cost more

Approaches for Determining Space Needs

• Model Stock Approach– Determines floor space necessary to carry and

display a proper merchandise assortment

• Sales-Productivity Ratio– Assigns floor space on the basis of sales or profit

per foot

Interior (Point-of-Purchase) Displays

• Assortment display• Theme-setting display• Ensemble display• Rack display• Case display• Cut case• Dump bin

Online Store ConsiderationsAdvantages• Unlimited space to present product assortments, displays, and information• Can be customized to the individual customer• Can be modified frequently• Can promote cross-merchandising and impulse purchasing• Enables a shopper to enter and exit an online store in a matter of minutes

Disadvantages• Can be slow for dialup shoppers• Can be too complex• Cannot display three-dimensional aspects of products well• Requires constant updating• More likely to be exited without purchase

Chp 19Promotional Strategy

• To explore the scope of retail promotion• To study the elements of retail promotion:

advertising, public relations, personal selling, and sales promotion

• To discuss the strategic aspects of retail promotion: objectives, budgeting, the mix of forms, implementing the mix, and reviewing and revising the plan

Advertising Objectives for Retailers

• Lifting short-term sales• Increasing customer traffic• Developing and/or reinforcing a retail image• Informing customers about goods and services

and/or company attributes• Easing the job for sales personnel• Developing demand for private brands

Figure 19.4 Types of

Advertising

Public Relations Objectives for Retailers

• Increase awareness of the retailer and its strategy mix

• Maintain or improve the company image• Show the retailer as a contributor to the

public’s quality of life• Demonstrate innovativeness• Present a favorable message in a highly

believable manner• Minimize total promotion costs

Personal Selling Objectives for Retailers

• Persuade customers to buy• Stimulate sales of impulse items or products related to

customers’ basic purchases• Complete customer transactions• Feed back information to company decision makers• Provide proper levels of customer service• Improve and maintain customer satisfaction• Create awareness of items also marketed through the Web,

mail, and telemarketing

Figure 19.7 Typical Personal Selling Functions

Sales Promotions Objectives for Retailers

• Increasing short-term sales volume• Maintaining customer loyalty• Emphasizing novelty• Complementing other promotion tools

Figure 19.9 Types

of Sales

Promotions

Promotional Objectives

• Increase sales• Stimulate impulse and reminder buying• Raise customer traffic• Get leads for sales personnel• Present and reinforce the retailer image• Inform customers about goods and services• Popularize new stores and Web sites• Capitalize on manufacturer support• Enhance customer relations• Maintain customer loyalty• Have consumers pass along positive information to friends and

others

Figure 19.14 Promotion and the Hierarchy of Effects