Chapter 15 – RetailingRole of Retailing-Retailing- all the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use-over 1.6 million retailers employ 24 million people-retailers account for 11.6% of all US employment-retailing accounts for 13% of US business-Retailers ring up almost $4 Trillion in sales – almost 40% of US GDP-industry is dominated by a few giant organizations; such as Wal-Mart-stress value to attract customers-offer unique value propositions: prices, customer services, loyalty programs-use innovative marketing concepts that will resonate with customers (“green emphasis”)-appeal to time-strapped customers with multi-channel shopping experienceClassifying Retailers-ownership:-Independent retailers- owned by a single person or partnership and not part of a larger retail institution-Chain stores- owned and operate as a group by a single organization[previously determined by having 11 stores]-Franchises- the right to operate a business or sell a product-level of service:-self service: factory outlets, warehouse clubs-btwn self & full service: discount stores-full service: exclusive stores-product assortment:Type of Retailer Service Level Assortment Price Gross MarginDepartment Store Mod Hi-High Broad Mod-High Mod HighSpecialty Store High Narrow Mod-High HighSupermarket Low Broad Moderate LowConvenience Store Low Med-Narrow Mod-High Mod HighDrugstore Low-Mod Medium Moderate LowFull-Line Discounter Mod-Low Med-Broad Mod-Low Mod LowSpecialty Discounter Mod-Low Med-Broad Mod-Low Low Mod LowWarehouse Club Low Broad Low- Very low LowOff-price Retailer Low Med-Narrow Low LowRestaurant Low-Mod Narrow Low-High Low-High-price:-gross margin: the amount of money the retailer makes as a percentage of sales after the Cost of Goods sold is subtractedMajor Types of Retail Operations-department stores-shopping & specialty goods-specialty stores-distinctive products & customer services-supermarkets-food products-drug stores-medications, health & beauty, cosmetics, specialty-convenience stores-high turnover goods-discount stores-full line discounters: retailer offering customers very limited service and carrying a broad assortment of well-known, nationally branded “hard goods”-specialty discount stores-category killers: specialty discount stores that heavily dominate their narrow merchandise segment-warehouse clubs-off-price discount retailers  Ex: Marden’s (in Maine)-supercenter: retail store combining groceries and general merchandise goods with a widerange of services-mass merchandising- retailing strategy using moderate to low priced on large quantities of merchandise and lower service to stimulate high turnover for products-restaurantsNonstore Retailing-automatic vending-direct retailing-door-to-door-office-to-office-home sales parties becoming new opportunities for trials-direct marketing-direct mail-catalogs & mail order-telemarketing-electronic retailing-electronic retailingFranchising-product & trade name franchising-dealer agrees to selling products provided by a manufacturer or wholesaler -business format franchising-an ongoing business relationship between franchiser & a franchiseRetail Marketing Strategy-define & select target market1. Segment market: demographics, geographics, psychographics2. Determine competitors-develop the 6 P’s3. Choose the retailing mix: - Product Product offering: the mix of products offered to the consumer by the retailer; aka product assortment or merchandise mix Width & depth of product assortment- Place Location & hours Choosing a community: economic growth potential, competition, geography Choosing a site: freestanding store, shopping center, mall1. Neighborhood socioeconomics, traffic flows, land costs, zoning regulations, public transportation, sites visibility, parking, entrances/exits, accessibility, &safety- Promotion: advertising, public relations, publicity, sales promotion- Price Low prices: good value, single price point, EDLP High prices: quality image- Presentation: Atmosphere: the overall impression conveyed by a store’s physical layout, décor, and surroundings Employee type & density, merchandise type & density, fixture type & density, sounds, odors, visual factors- Personnel: trading up & suggestion selling Customer service & personal sellingNew Developments in Retailing-interactivity: consumers are involved in the retail experience-M-commerce: purchasing goods through mobile