Marketing Chapter 16 Notes Retailing selling renting and providing products and services to ultimate consumers Consumer Utilities 1 Place where the product service is offered 2 Possession how the consumer possesses the product service 3 Form production or alteration of the product 4 Time when the product service is offered U S Economic Impact of Retailing Price Chopper 2009 3 3 billion sales Global Economic Impact of Retailing Walmart 2010 421 billion sales Tesco grocery store in Europe Different Type of Retailing Store Sporting good books and music stores Furniture and home furnishing stores Electronic Stores Clothing and accessory stores Pharmacies and drug stores Building material and hardware stores Nonstore Retailers Gasoline stations Food services and drinking places Food and beverage stores General merchandise stores Automotive dealers Figure 16 2 Sales of different types of retailers Sales billions 84 5 88 2 100 5 213 9 222 3 284 0 352 8 453 3 466 0 583 3 609 8 621 4 Form of Ownership distinguishes retail outlets based on whether independent retailers corporate chains or contractual system own the outlet Independent Retailer most common ex Hardware store Corporate Chains Macy s Contractual Systems wholesaler sponsored voluntary chains retailer sponsored cooperatives Franchising o Business format franchises ex Subway Dunkin Donuts McDonalds o Product Distribution Franchises ex Ford 1 Marketing Chapter 16 Notes Figure 16 3 Top 5 Franchises in the US Franchise Hampton Hotels Ampm McDonald s 7 eleven Supercuts Type of Business Hotels Convenience Stores Fast Food Restaurants Convenience Stores Hair Salons 3 745 500 13 114 000 1 786 929 7 596 888 1 068 850 1 892 400 30 800 604 500 119 350 196 550 1 826 3 177 26 398 37 039 979 Total Start up Cost of Franchises Level of Service used to describe by self limited and full service retailers Self service requires that customers perform many functions during the purchase process ex Redbox Limited service provide some services such as credit and merchandise return but not other such as clothing alterations ex Walmart customers are responsible for shopping but associates are available for questions and checkout Full service include most specialty store and department stores provide many services to their customers ex Bloomingdale s Type of Merchandise Line describes how many different types of products a store carries and in what assortment Depth of product line means the store carries a large assortment of each item such as a shoe store that offers running shoes dress shoes and children shoes Category Killers outlets that often dominate the market ex Best Buy electronics Staples Office Supplies Barnes and Noble Books Breadth of product line refers to the variety of different items a store carries such as appliances and books Scrambled Merchandising offering several unrelated product lines in a single store common Hypermarket SUCCESSFUL IN EUROPE large stores often more than 200 000 square feet based on a simple concept offer everything under one roof eliminating the need to stop at more than one location Provide variety quality and low prove for groceries and general merchandise Supercenter USA combines a typical merchandise store with a full size grocery store Figure 16 5 Differences between a hypermarket and supercenter Region of Popularity Average Size Number of Products Annual Revenue Hypermarket Europe 90 000 300 000 sq ft 20 000 80 000 100 000 000 per store Supercenter USA 100 000 215 000 sq ft 35 000 60 000 000 per store 2 Marketing Chapter 16 Notes Intertype Competition competition between retailers of very dissimilar of retail outlets ex Bakery competing with a department store discount outlet or even a gas station Figure 16 6 Retailing that does not involve a store o IKEA mailed 197 million catalogs 29 languages 35 countries Non Store Retailing Automatic Vending Direct Mail and Catalogs Online Retailing Telemarketing Interactive Advertising Bureau Annual sales exceeds 332 billion o Do Not Call Registry Direct Selling Mary Kay o Door to Door retailing 3 Marketing Chapter 16 Notes o Annual sales 28 billion Figure 16 7 Elements of a retailing strategy Retailing Strategy Retail Store Positioning Retailing Mix Retail Pricing Retail Communication Merchandise Merchandise Management Store Location Store Management Retail Positioning Matrix Breadth of Product line of product lines Value added Location Product reliability Prestige 4