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Chapter 16

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ZARA Places Retail Stores in

High-End, High Traffic Areas

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What is Retailing?

Retailing includes all the activities involved in selling

goods or services directly to final consumers forpersonal, nonbusiness use.

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Major Retailer Typesy Specialty store

y Department store

y Supermarkety Convenience store

y Discount store

y Off-price retailer

y Superstorey Catalog showroom

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Levels of

R

etail ServiceSelf-service

Self-selection

Limited service

Full service

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Retail Positioning Map

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NonstoreR

etailingDirect

selling

Buying

service

Automatic

vending

Direct

marketing

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Major Types of Corporate

Retail Organizations

y Corporate chain store

yVoluntary chainy Retailer cooperative

y Consumer cooperative

y Franchise organization

y Merchandising conglomerate

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CorporateR

etailing

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What is a Franchising System?

Afranchising system is a system of individual

franchisees, a tightly knit group of enterprises whosesystematic operations are planned, directed, andcontrolled by the operations franchisor.

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Characteristics of Franchises

y The franchisor owns a trade or service mark and

licenses it to franchisees in return for royaltypayments

y The franchisee pays for the right to be part of thesystem

y The franchisor provides its franchisees with a systemfor doing business

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Quiznos is a Franchising System

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Changes in the

R

etail Environment

y New retail forms and combinations

y

Growth of intertype competitiony Competition between store-based and non-store-

based retailing

y Growth of giant retailers

y

Decline of middle market retailersy Growing investment in technology

y Global profile of major retailers

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New Retail Forms and Combinations

y Combination retailers

y Pop-ups

y Showcase stores

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R

etailersM

arketing DecisionsTarget market

Product assortmentProcurement

Prices

Services

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RetailersMarketing Decisions

(cont.)

Store atmosphere

Store activities

Communications

Locations

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Retail CategoryManagement

Define the category

Figure out its role

Set goals

Choose the audience

Implement the plan

Figure out tactics

Assess performance

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Direct Product Profitability

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R

etailer ServicesM

ixPrepurchase services

Postpurchase services

Ancillary services

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Store AtmosphereyWalls

y Lighting

y Signage

y Product placement

y Floors

y Surface space

y Music

The Fornarina flagship store featuresaward-winning retail design.

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Tips for Increasing Sales

inR

etail Space

y Keep shoppers in the store

y

Honor the transition zoney Dont make them hunt

y Make merchandise available to the reach and touch

y Note that men do not ask questions

yRemember women need space

y Make checkout easy

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Location Decisiony Central business districts

y Regional shoppingcenters

y Community shoppingcenters

y Shopping strips

y Location within a largerstore

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Indicators of Sales Effectiveness

Number of people passing by

% who enter store

% of those who buy

verage amountspent per sale

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Private Labels

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Private Label Brands

y Private labels are ubiquitous

y Consumers accepts private labelsy Private-label buyers come from all socioeconomic

strata

y Private labels are not a recessionary phenomenon

y Consumer loyalty shifts from manufacturers toretailers

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Wholesaling Functionsy Selling and promoting

y Buying and assortment

buildingy Bulk breaking

y Warehousing

y Transportation

y Financing

y Risk bearingy Market information

y Management servicesand counseling

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MajorWholesaler Types

Merchant

Full-service

Limited-service

Brokers and agents

Manufacturers

Specialized

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Market Logistics Planning

y Deciding on the companys value proposition to its

customersy Deciding on the best channel design and network

strategy

y Developing operational excellence

y Implementing the solution

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What are

Integrated Logistics Systems?

An integrated logistics system (ILS)includes materials management, material

flow systems, and physical distribution, aidedby information technology.

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Market Logistics

y Sales forecasting

y Distribution scheduling

y Production plans

y Finished-goodsinventory decisions

y

Packaging

y In-plant warehousing

y Shipping-room

processing

y Outboundtransportation

y Field warehousing

y Customer delivery andservicing

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Market Logistics Decisions

y How should ordersbe handled?

y

Where should stockbe located?

y How much stockshould be held?

y How should goods beshipped?

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Transportation Factors

y Speed

y Frequency

y

Dependabilityy Capability

yAvailability

y Traceability

y Cost

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Containerization