Chapter 15 Role of Retailing Retailing all activities directly related to sale of goods and services to ultimate consumer for personal nonbusiness US retailers employ 25 mil people 11 6 of employment 13 of all businesses 4 tril in sales 40 of GDP Industry dominated by few giant organizations Classification of Retail Operations Ownership independent part of chain franchise outlet o Independent owned by a single person or partnership and not part of larger retail institution Local florists ethnic food markets o Chain Store owned and operated as a group by a single Tasks are handled by home office GAP and o Franchises the right to operate a business or to sell a organization Starbucks product Subway and Quiznos Level of Service varies from full to no service o Full Service expensive clothing store o No Service Factory outlets and warehouse clubs Product Assortment classification from breadth and depth o Specialty Stores concentrated product assortments depth Toys R US GameStop o Full line Discounters Broad assortments limited depth Price position retail stores as traditional department stores Target or specialty stores o Gross Margin Amount of money retailer makes as a percentage of sales after the cost of goods sold is subtracted Major Types of Retail Operations Department Stores housing several departments under one roof each department is headed by a buyer who selects merchandise Specialty Store specializing in a given type of merchandise Supermarket Large departmentalized self service retailer Specializes in food some use Scrambled Merchandising Drugstore stocks pharmacy related products and services Convenience Store miniature supermarket carrying limited Discount Stores competes on basis of low prices high line of high turnover goods turnover high volume o Full line discount offers customers very limited service and carries broad assortment of well known national brand goods Mass Merchandising Moderate to low prices on large quantities of merchandise and lower levels of service Supercenter combines groceries and general merchandise goods with wide range of services o Specialty Discount offers nearly complete selection of single line merchandise self service discount price high volume and high turnover Category Killer heavily dominate their merchandise segment o Warehouse Membership Clubs limited service merchant wholesalers that sell limited selection of brand name wide variety o Off Price retailer sells at 25 or more below because it pays cash for its store Marshalls TJ Maxx Restaurants straddle line between retail and service Nonstore Retailing shopping without visiting a store Automatic Vending machines to offer goods for sale 11 5 million vending machines in US Direct Retailing Door to Door Office to Office Home Sale Parties Direct Marketing techniques to get consumers to make purchase from nonretail setting like home or office o Telemarketing Direct Mail Catalogs and Mail Order Electronic Retailing Shop at Home networks Franchising operation Franchisor originates trade name product method of Franchisee pays franchisor for right to use business methods Basic Forms o Product and Trade name dealer agrees to sell in products provided by a manufacturer or wholesaler o Business Format Franchising Ongoing business relationship between franchiser and franchisee Retail Marketing Strategy Define Target Market demographics geographics Choosing Retail Mix stores position is compatible with target psychographics market expectations o Product Offering mix of products offered to consumer by retailer also called merchandise mix o Promotion Strategy advertising PR publicity sales o Place Economic growth potential competition geography Freestanding Store isolated consumers seek out and purposely plan to visit Destination Store Shopping Center variety of type of stores Malls Store within a Store Pop up stores only stay a few months o Price sell at right price low price good value single price point high price quality image o Presentation helps determine stores image and position Atmosphere overall impression conveyed by stores physical layout d cor and surroundings Employee type and density Merchandise type and density Fixture type and density Sound Odor Visual Factors o Personnel Trading Up persuading customers to buy a high priced item than they originally intended to purchase Suggestion Selling seek customers purchases New Developments in Retailing with related items Interactivity Consumers are involved in retail experience M Commerce Purchasing goods through mobile devices
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