chapter 8_ notes_ retailing

8/7/2019 CHAPTER 8_ notes_ RETAILING

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PREPARED BYPREPARED BY::MISS NORLINA M. ALIMISS NORLINA M. ALI

Faculty of Business Management (Marketing)Faculty of Business Management (Marketing)

UniversitiUniversiti TeknologiTeknologi MARA,MARA, SegamatSegamat

[email protected]@johor.uitm.edu.my

RETAILING

1


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(1) Definition of

Retailing

(2) Classification of

Retail Operations

(4) Non StoreRetailing

(5) Franchising

(3) Major Types ofRetail Operations RETAILING

(6) Retail MarketingStrategy

(7) Trends inRetailing


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LEARNING OUTCOME 1LEARNING OUTCOME 1

DEFINITION OFDEFINITION OF

RETAILINGRETAILING


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Definition of RetailingDefinition of Retailing

Lamb : All the activities directly related to the sale ofgoods and services to the ultimate consumer for

personal, non-business use.


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The Role of RetailingThe Role of Retailing

Retailers account for 11.7 percent of U.S. employment.

Retailing accounts for 13 percent of U.S. businesses.

Retailers ring nearly 40 percent of the U.S. GDP.

Industry is dominated by a few giant organizations, suchas Wal-Mart.


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10 LARGEST U.S. RETAILERS10 LARGEST U.S. RETAILERS

2004 rank Company Revenue # of stores

1 Wal-Mart $258.6 billion 4906

2 Home Depot $64.8 billion 1707

3 Kroger $53.7 billion 3774

4 Target $48.1 billion 1553

5 Costco $42.5 billion 420

6 Sears $41.4 billion 19707 Safeway $35.6 billion 1817

8 Albertsons $35.4 billion 2305

9 Walgreen $32.5 billion 4227

10 Lowes $30.8 billion 952


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CLASSIFICATIONCLASSIFICATIONOF RETAILOF RETAIL

OPERATIONSOPERATIONS


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Ownership

Level of Service

ProductAssortment

Price

IndependentRetailers

Chain Stores

Franchises

Classification ofRetail OperationsClassification ofRetail Operations


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1)1) OwnershipOwnershipa)a) IndependentIndependent retailerretailer

Retailers owned by a single person / partnership & notoperated as part of a larger retail institution.

Eg; Bakery Shop, Local Florists, Shoe Shop, etc.b)b) ChainChain StoresStores

Stores owned & operated as a group by single organization.

Eg; Kamdar, Globe Silk Store, Nagoya.

c)c) FranchisesFranchises

Owned & operated by individuals but are licensed by a largersupporting organization.

Eg; KFC, McD, Pizza, etc.


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2)2) LevelLevel ofof serviceservice

he level of service that retailers provide can be classifiedalong a continuu , fro full-service to self-service.

Discount storesDiscount stores Exclusive storesExclusive storesFactory outletsWarehouse clubsFactory outletsWarehouse clubs

Full ServiceFull ServiceSelf ServiceSelf Service


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3)3) ProductProductAssortmentAssortmentBy the breadth & depth of product line.

Eg; Toy R Us concentrated on product assortment by carryingsingle / narrow product lines.

4)4) PricePrice

Traditional department stores & specialty stores typically chargeFULL SUGGESTED RETAIL PRICE.

While many more discount stores may offer LOWER PRICE toattract volume purchases among customers.

Eg; Mydin practice discount store, offer lower price.

Eg; Watson practice full suggested retail price.


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MAJOR TYPES OFMAJOR TYPES OFRETAILRETAIL

OPERATIONSOPERATIONS


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Major Types ofRetail OperationsMajor Types ofRetail Operations

Department Stores

Specialty Stores

Supermarkets

Drugstores

Convenience Stores

Discount Stores

Restaurants


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1) Department Stores

A wide variety of product lines.

Carries a wide variety of shopping and specialty goodsincluding apparel, cosmetics, electronics, etc..

Purchases are made within each department.

Eg; Jaya Jusco, Sogo, Parkson.


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1)

2) Specialty stores

Narrow product line with a deep assortment within that

line.Merchandise is tailored to specific target markets.

Price is a secondary consideration to consumers.

These stores provide a low-risk testing ground for manynew products.

Eg; Toys R Us, The Body Shop, BATA.


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3) Supermarkets

Who operate large, low-cost, low-margin, high volume& self-service stores serving customers total needs forfood, laundry & household, etc.

U.S. Consumers spend about a tenth of income insupermarkets.

Trends: the growth of prepared foods and time-savingproducts, and the need for convenience.

Eg; Batu Road, Jaya supermarket, Jaya Juscosupermarket, Parkson Grand supermarket, etc.


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3) Supermarkets

4) Drugstores

To sell pharmacy related products & services to the

customers.Carry a wide selection of over the counter (OTC)medications.

Products offer included medicines, cosmetics, health

products, beauty items, etc.Stock pharmacy-related products and services.

Eg; Guardian, Watson, Georgetown Pharmacy, etc.


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5) Convenience Stores

Defined as a miniature (small) supermarket, carryingonly a limited line of convenience goods.

Set up near residential areas & remain open 24 hours,7 days a week, charge high price to make up higheroperating cost, lower sales volume.

Eg; 7 eleven store, many petrol stations (Shell,Petronas, Esso, Caltex)


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5) C

6) Discount stores

A retailer that competes on the basis of low prices, high

turnover, and high volume.4 major categories:-

a) Full-line discount store (mass merchandiser & supercenter).

b) Specialty discount store

c) Warehouse discount stored) Off-price discount store


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5) C

6) Di

7) Restaurants

Straddle the line between retailing establishments and

service establishments.Offer tangle products food & beverage

BUT they are also provide a valuable service forconsumers in the form of food preparation & food

service.


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NON STORENON STORERETAILINGRETAILING


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Non Store Retailing

Automatic Vending

Direct Retailing

Direct Marketing

Electronic Retailing

Door-to-Door

Office-to-Office

Home Sales

Parties

Telemarketing

Catalogs & Mail Order

Direct Mail

In-bound call

Out-bound call

On-Line Retailing

Shop-at-Home Networks


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FRANCHISINGFRANCHISING


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FR ANCHISING

Franchiser the originator of a trade name, product, methods of operation, & so on,that grants operating rights to another party to sell its product.

Franchisee an individual / business that is granted the right to sell another partysproduct by paying the franchiser for the right to use its name, product / methods.

Franchise a continuing relationship in which franchiser grants to a franchisee thebusiness rights to operate or sell a product.

Basic Form of Franchising

Business FormatFranchising

Product and Trade NameFranchising


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Advantages of FranchisingAdvantages of Franchising

Company expansion with limited capital requirements

Motivate store owners

Bulk purchasing of inventory

An opportunity to become an independent businessperson withreduced operating capital

A product / service with has already been established in themarketplace

Technical training & managerial assistance form the fromfranchiser.

Positive results achieved by quality control & product uniformity.


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RETAILRETAILMARKETINGMARKETING

STRATEGYSTRATEGY


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TargetTargetMarketMarket

Product

Price

Promotion

Place

Personnel

Presentation

Retai l Market ing StrategyRetai l Market ing Strategy


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Presentation of theRetail Store

Defining aTarget Market

Choosing theRetailing Mix

Retail Price

Promotion Strategy

Proper Location

Sound

Fixture type & density

Merchandise type &density

Visual Factors

Odors

Product offering

Shopping center

CommunityShopping center

Freestanding Stores

Personnel &Customer Service

Employee type & density


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TRENDS INTRENDS INRETAILINGRETAILING


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Trends in RetailingTrends in Retailing

Entertainment

Convenience& Efficiency

Customer Management

chapter 8_ notes_ retailing

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