Chapter 15 Ownership Retailing all the activities directly related to the sale of goods and services to the ultimate consumer for personal nonbusiness use A retail establishment can be classified according to its ownership level of service product assortment and price Independent retailer a retailer owned by a single person or partnership and not operated as part of a larger retail institution Chain store a store that is part of a group of the same stores owned and operated by a single organization Franchise the right to operate a business or sell a product Level of Service Goes from full service to self services Some offer high levels of service and offer many different types of things Some offer no service Product Assortment Depth of the product line Full line discounters typically carry broad assortments while specialty stores have narrow product lines with a lot of depth Stores modify their assortment to accommodate environmental factors Price Gross margin the amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted Major Types of Retail Operations Department Store a store housing several departments under one roof Buyer a department head that selects the merchandise for his or her department and may also be responsible for promotion and personnel Specialty Store a retail store specializing in a given type of merchandise Supermarkets a large departmentalized self service retailer that specializes in food and some nonfood items Scrambled merchandising the tendency to offer a wide variety of nontraditional goods and services under one roof Drugstore a retail store that stocks pharmacy related products and services as its main draw Convenience Store a miniature supermarket carrying online a limited line of high turnover convenience items Discount Store a retailer that competes on the basis of low prices high turnover and high volume Full line Discount Store a retailer that offers consumers very limited service and carries a broad assortment of well known naturally branded hard goods Mass Merchandising a retailing strategy using moderate to low prices on large quantities of merchandise and lower levels of service to stimulate high turnover of products Ex Wal Mart Supercenter a retail store that combines groceries and general merchandise goods with a wide range of services Ex Target Specialty Discount Store a retail store that offers a nearly complete selection of single line merchandise and uses self service discount prices high volume and high turnover Category Killer a specialty discount store that heavily dominates its narrow merchandise segment Ex Best Buy Staples Office Deport IKEA Warehouse Membership Club a limited service merchant wholesaler that sells a limited selection of brand name appliances household items and groceries on a cash and carry basis to members usually small businesses and groups ex Wal Mart s Sam s Club Costco Off price Retailer a retailer that sells at prices 25 ore more below traditional department store prices because it pays cash for its stock and usually doesn t ask for return privileges Ex TJ Maxx Marshalls Home Goods Factory Outlet an off price retailer that is owned and operated by a manufacturer Ex Saks Off 5th Nordstrom Rack Nonstore Retailing Nonstore Retailing shopping without visiting a store Automatic Vending the use of machines to offer goods for sale Direct Retailing the selling of products by representatives who work door to door office to office or at home sales parties Direct Marketing Direct Response Marketing techniques used to get consumers to make a purchase from their home office or other nonretail setting Telemarketing the use of the telephone to sell directly to consumers Online Retailing a type of shopping available to consumers with personal computers and access to the Internet Franchisor the originator of a trade name product methods of operation and the like that grants operating rights to another party to sell its product Franchisee an individual or business that is granted the rights to sell another party s product Retailing Mix a combination of the six P s product place promotion price presentation and personnel to sell goods and services to the ultimate consumer Product Offering the mix of products offered to the consumer by the retailer also called the product assortment or merchandise mix Destination Store a store that consumers purposely plan to visit Atmosphere the overall impression conveyed by a store s physical layout d cor and surroundings Employee Type and Density general characteristics of employees Seem knowledgeable etc density is number of employees per square feet of selling space Merchandise Type and Density best brand names and displays Fixture Type and Density fixtures can be elegant or trendy consistent Sound music entices customers to stay in store and look longer or eat quickly and leave etc Odors Smell can stimulate or detract Visual Factors colors can create a mood or focus attention Chapter 16 Promotion communication by marketers that informs persuades and reminds potential buyers of a product in order to influence an opinion or elicit a response Promotional Strategy a plan for the optimal use of the elements of promotion advertising public relations personal selling sales promotion and social media Competitive Advantage one or more unique aspects of an organization that cause target consumers to patronize that firm rather than competitors Communication the process by which we exchange or share meaning through a common set of symbols Interpersonal Communication direct face to face communication between two or more people Mass Communication the communication of a concept or message to large audiences Sender the originator of the message in the communication process Encoding the conversion of sender s ideas and thoughts into a message usually in the form of words or signs What matters is what the receiver hears Channel a medium of communication such as a voice radio or newspaper for transmitting a message Noise anything that interferes with distorts or slows down the transmission of information Receiver the person who decodes a message Decoding interpretation of the language and symbols sent by the source through a channel Feedback the receiver s response to a message The Promotional Mix Promotional Mix the combination of promotional tools including advertising public relations personal selling sales promotion and social media used to reach the target
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