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Copyright Cengage Learning 2013All Rights Reserved

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Chapter 15: Retailing

Prepared & Designed by Laura Rush, B-books, Ltd.

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Learning Outcomes

Discuss the importance of retailing in theU.S. economy

Explain the dimensions by which retailers

can be classified

Describe the major types of retail operations

Discuss nonstore retailing techniques

LO1

LO2

LO3

LO4

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Learning Outcomes

Define franchising and describe its

two basic forms

List the major tasks involved in developing

a retail marketing strategy

Describe new developments in retailing

LO5

LO

6

LO7

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Copyright 2013 by CengageLearning Inc. All Rights Reserved 4

The Role of Retailing

Discuss the importanceof retailing in the U.S. economy.

LO1

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Copyright 2013 by CengageLearning Inc. All Rights Reserved

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All the activities directly relatedto the sale of goods and servicesto the ultimate consumer forpersonal, non-business use.

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Over 1.5 million U.S. retailers employ more than 15

million people

Retailers account for 10.8 percent of U.S.

employment

Retailing accounts for 12 percent of U.S. businesses

Retail sales account for nearly 2/3 of U.S. GDP

Industry is dominated by a few giant organizations,such as Wal-Mart

90% of retailers operate only one store

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Copyright 2013 by Cengage

Learning Inc. All Rights Reserved 7

Review Learning OutcomeThe Importance of Retailing

LO1

10.8%12%

66%

Retailing as a %

of U.S. employmentRetailing as a %

of U.S. businesses

Retailing as a %

of GDP

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Classifying Retailers

Explain the dimensions by

which retailers can

be classified.

LO2

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Classification of Retail

Operations

Ownership

Level of Service

Product Assortment

Price

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Classification of Ownership

IndependentRetailers

Chain Stores

Franchises

Owned by a single person orpartnership and not part of alarger retail institution

Owned and operated as agroup by a singleorganization

The right to operate abusiness or sell a product

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Level of Service

Full ServiceSelf Service

Discount stores Exclusive storesFactory outletsWarehouse clubs

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Types of Stores and Their Characteristics

Assort-ment

PriceGrossMargin

Broad

Narrow

Broad

Med-Narrow

Medium

Med-Broad

Med-Broad

Broad

Med-Narrow

Narrow

Mod-High

Mod-High

Moderate

Mod High

Moderate

Mod Low

Mod Lo-low

Low-very low

Low

Low-High

Mod High

High

Low

Mod High

Low

Mod Low

Mod Low

Low

Low

Low-High

Type of Retailer

Specialty Store

Supermarket

Convenience Store

Drugstore

Full-line Discounter

Specialty Discounter

Warehouse Clubs

Off-price Retailer

Restaurant

ServiceLevel

Mod Hi-High

High

Low

Low

Low-Mod

Mod-Low

Mod-Low

Low

Low

Low-High

Department Store

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Price

Gross Margin -

The amount of money the

retailer makes as apercentage of sales

after the cost of goods

sold is subtracted.

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Major Types of Retail Operations

Describe the major types

of retail operations.

LO

3

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Major Types of Retail

Operations

Online

http://www.walgreens.com

Department Stores

Specialty Stores

Supermarkets

Drugstores

Convenience Stores

Discount Stores

Restaurants
http://www.walgreens.com/http://www.walgreens.com/

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Categories of Discount Stores

Full-Line Discounters

Specialty Discount Stores

Warehouse Clubs

Off-Price Discount Retailers

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Discount Stores

Mass Merchandising- Retailing

strategy using moderate to

low prices on large quantities

of merchandise and lower

service to stimulate high

turnover of products.

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Discount Stores

Supercenter - Retail store

combining groceries and

general merchandise goods with

a wide range of services.

Extreme-value Retailing- Smaller

stores emphasizing daily

necessities at rock-bottomprices.

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Specialty Discount Stores

Category Killers- Specialty

discount stores that heavilydominate their narrow merchandise

segment.

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Review Learning OutcomeTypes of Retail Operations

LO3

DepartmentStores

SpecialtyStores

Supermarket Drugstores Convenience Stores

DiscountStores

Restaurants

ScrambledMerchandising

Full-line

Specialty

Warehouse

Off-price

supercenter

extreme-

value

category

killer

factory

outlet

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Nonstore Retailing

Discuss nonstore retailing

Techniques.

LO

4

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Nonstore Retailing

Automatic Vending

Direct Retailing

Direct Marketing

M-commerce

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Direct Retailing

Online

http://www.avon.com

Door-to-Door

Office-to-Office

Home SalesParties
http://www.avon.com/http://www.avon.com/

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Types of Direct Marketing

Telemarketing

Catalogs & Mail Order

Direct Mail

M-Commerce Shop-at-home networksHandheld devices

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Review Learning OutcomeNonstore Retailing Techniques

LO

4

Vending

Direct retailing

Direct marketing

M-Commerce

direct mail

catalogs

telemarketing

Handheld device

shop at home

Nonstore Retailing

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Franchising

Define franchising anddescribe its

two basic forms.

LO5

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Basic Forms of Franchising

Business FormatFranchising

Product and Trade NameFranchising

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Franchising

Product and Trade Name Franchising-dealer agrees to sell in products

provided by a manufacturer orwholesaler.

Business Format Franchising- Anongoing business relationship between

a franchiser and a franchise.

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Largest U.S. Franchisors

Source: 2010 Franchise 500 Rankings, http://www.entrepreneur.com/franchises/rankings/franchise500-115608/2010,-1.html, accessed August 2010.

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Review Learning OutcomeDefine Franchising and Describe its Two Basic Forms

LO

5

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Retail Marketing Strategy

List the major tasksinvolved in developing a retail

marketing strategy.

LO6

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Retail Marketing Strategy

Develop theSix Ps

Define & Selecta Target Market

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Defining a Target Market

STEP 1:Define the

Target Market

Demographics

Geographics

Psychographics

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Choosing the Retailing Mix

STEP 2:

Choose theRetailing Mix

Product

Price

Promotion

Place

Personnel

Presentation

Online

http://www.publix.com
http://www.publix.com/http://www.publix.com/

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TargetMarket

Product

Price

Place

Promotion

Personnel

Presentation

The Retailing Mix

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Choosing the Retailing Mix

The mix of products offered to

the consumer by the retailer;also called the produc t

assortmentor merchandise m ix.

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Retail Promotion Strategy

Advertising

Public Relations

Publicity

Sales Promotion

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The Proper Location

Economic growth

potential

Competition

Geography

Choos ing a Commun ity Choos ing a Site

Freestanding Store

Shopping Center

Mall

I t t F t f Sit

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Important Factors for Site

Choice

Neighborhoodsocioeconomics

Traffic flows

Land costs

Zoning regulations

Public transportation

Sites visibility, parking,

entrances and exits,accessibility, and safety

Fit with other stores

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Retail Prices

QualityImage

High PriceLow Price

Good ValueSingle Price Point

EDLP

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P l d C t

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Customer Service for On-Line

Retailers

Easy-to-use Web site

Product availability

Simple returns

R i L i O t

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Review Learning OutcomeDeveloping a Retail Marketing Strategy

LO6

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New Developments in Retailing

Interactivity - Consumers areinvolved in the retail experience.

Pop-up Shops - Temporary retailestablishments that provideflexible locations without a

long-term commitment.

Review Learning Outcome

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Review Learning OutcomeDescribe new development in retailing



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Chapter 15 Company Clip

Sephora carries quality skincare products,

but it is due to its excellent retailing

techniques that the store has been such a

success.

http://www.cengage.com/marketing/book_content/

9781111821647_lamb/videos/ch15.html


http://www.cengage.com/marketing/book_content/9781111821647_lamb/videos/ch15.htmlhttp://www.cengage.com/marketing/book_content/9781111821647_lamb/videos/ch15.htmlhttp://www.cengage.com/marketing/book_content/9781111821647_lamb/videos/ch15.htmlhttp://www.cengage.com/marketing/book_content/9781111821647_lamb/videos/ch15.html

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Part 4 Video: White Rock

White Rock has had to modify its distribution

strategy over the years to adapt to its

changing position and to the increased

competition from major bottlers.

http://www.cengage.com/marketing/book_content/

1439039429_lamb/part_videos/part04.html

Copyright 2013 by Cengage 51
http://www.cengage.com/marketing/book_content/1439039429_lamb/part_videos/part04.htmlhttp://www.cengage.com/marketing/book_content/1439039429_lamb/part_videos/part04.htmlhttp://www.cengage.com/marketing/book_content/1439039429_lamb/part_videos/part04.htmlhttp://www.cengage.com/marketing/book_content/1439039429_lamb/part_videos/part04.html

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