DHD 2009 MKT243 Fundamental Of Marketing

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Fundamental Of Fundamental Of MarketingMarketingMKT243MKT243

Chapter 8Chapter 8

RetailingRetailing

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Slide OutlineSlide Outline• Classification of retails operations• Major types of retail operations• Non-store retailing• Franchising• Retail marketing strategy• Trends in retailing

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

Retailers are businesses whose sales come primarily from retailing

RetailingRetailing

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Classification of Retail Classification of Retail OperationsOperations

A retail establishment can be classified according to:1. Ownership• Independent retailers-Retailers owned by a single person

or partnership, not large retail institution.• Chain stores- Stores owned and operated as a group by a

single organization• Franchise-Stores owned and operated by individuals but

are licensed by a larger supporting organization

2. Level of servicei. Full service operation of an outletii. Self-service operation

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Classification of Retail Classification of Retail OperationsOperations

3. Product AssortmentNumber of product lines and product items offered by the retailer.

4. PriceDepends on the gross margin which is the amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted.

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Major Store Retailer TypesMajor Store Retailer Types

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Cont…Cont…• Drugstore

A retail store that stocks pharmacy-related products and services as its main draw

• RestaurantSell food and drink and also provide valuable service for consumers in the form of preparation of the food and service.

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Non-store RetailingNon-store Retailing• Def: Shopping without visiting a store

Type of Non-store Retailing

Characteristics Examples

1. Automatic Vending

•The use of machine to offer goods for sale e.g. soft drinks, candy, snack•Usually found in college cafeteria, office building•More convenience and coin-operated machine

•Top-up machine•Soft drink machine

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Non-store RetailingNon-store RetailingType of Non-

store RetailingCharacteristics Examples

2. Direct Retailing

•Sell product door to door, office to office, or at home sales parties•Selling product through representative

•Electrolux•Water filter•Avon

3. Direct Marketing

•a.k.a direct-response marketing•Techniques used to get consumers to make a purchase from their home, office, or other non-retail setting•E.g: direct mail, catalog and mail order, telemarketing.

•Nutrilife

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Non-store RetailingNon-store RetailingType of Non-

store RetailingCharacteristics Examples

4. Electronic Retailing

•It includes 24 hour, shop-at-home TV networks, on-line retailing•Shop-at-home TV network•Online Retailing-shopping available to consumers with access to the internet.

•Smart shop

•E-bay, yahoo.shop

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FranchisingFranchising• Franchise-is a continuing relationship

in which a franchiser grants to a franchisee the business rights to operate or to sell the product

• Franchiser-The originator of a trade mark, product, methods of operation and so on, that grants operating rights to another party to sell its product

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FranchisingFranchising• Franchisee-An individual or business

that is granted the right to sell another party’s product

Example:McD, Starbuck, Coffeebean,…

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Basic Forms of FranchisingBasic Forms of Franchising

Business FormatFranchising

Business FormatFranchising

Product and Trade Name Franchising

Product and Trade Name Franchising

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Retail Marketing StrategyRetail Marketing StrategyThe key task:1. Defining the target market

Who is the target market?

2. Choosing the Retailing Mix

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Retailing MixRetailing Mix

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Presentation of the Retail Presentation of the Retail StoreStore

Employee type and densityEmployee type and density

Merchandise type and densityMerchandise type and density

Fixture type and densityFixture type and density

SoundSound

OdorsOdors

Visual factorsVisual factors

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Trends in RetailingTrends in Retailing1. Entertainment2. Convenience and Efficiency3. Customer Management 4. M-commence

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RetailingRetailing

Retailers have to consider:– Non-store retailing– Retail convergence– Megaretailers– Retail technology– Global expansion– Retail stores as communities

The Future of Retailing

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WholesalingWholesalingWholesaling includes all activities involved in selling goods and services to those buying for resale or

business use