Ch 1 World of Retailing 1 Retailer a business that sells products and or services to consumers for personal or family use 2 Wholesalers a business that sells to other businesses 3 Functions performed by Retailers 4 Intertype Competition Competition among retailers that sell similar merchandise using different types of retail outlets such as drug and department stores 5 Intratype Competition Competition between the same types of retailers Department stores competing against department stores 6 Scrambled Merchandise when retailers offer merchandise not typically associated with their type of store such as clothing in a drugstore 7 Retail Strategy a retail strategy should identify Target Market Retail Mix the products and service and the Sustainable Competitive Advantage Ch 2 Types of Retailers 8 A Retail Strategy should identify Target Market Retail Mix and Competitive Advantage 9 Classification of different retailers a Food Retailers Warehouse Clubs Convenience Stores Conventional Supermarkets b General Merchandise Department Stores Shoe Stores Furniture Store c Non store Retailers E commerce d Service Retailers firms that primarily sell services rather than merchandise such as the dry cleaners Geek Squad and Jiffy Lube Four elements used for classifying retailers Types of Merchandise Variety breadth and Assortment depth Services Offered and Pricing 10 Four Characteristics of Services touch them a Intangibility services are less tangible than products customers cannot see or b Simultaneous Production and Consumption Service providers create and deliver the service as the customer is consuming it c Perishability Services are perishable They cannot be saved stored or resold d Inconsistency Because services are performances produced by people employees and customers no two services will be identical 11 Service Marketing Triangle a etc 12 Variety the of merchandise categories a retailer offers Clothing jewelry electronics 13 Assortment the of different items offered in a merchandise category In clothing Polo RL TH etc Chapter 4 Customer Buying Behavior 14 Steps in the Buying Process a Need Recognition i Utilitarian satisfied when purchases accomplish a specific task ii Hedonic satisfied when purchase accomplish a need for entertainment emotional and recreational experience as in department stores or specialty stores b Information Search i Internal Sources are information in a customer s memory such as names images and past experiences with different stores The major source of internal information is the customer s past shopping experiences ii External Sources consist of information provided by a host of sources People search for products and information using search engines such as Google visit the websites maintained by manufacturers and retailers etc c Evaluation amount of info search depends on the value from searching vs the cost of searching i Multiattribute Attitude Model customers see a retailer product or service as a collection of attributes or characteristics Predict a customer s evaluation of a retailer product or service based on its performance on relevant attributes or the importance of those attributes ii Consideration Set The set of alternatives the customer evaluates when making a selection To be included in the Consideration Set retailers develop programs to increase the likelihood that customers will remember them when they re about to go shopping iii d Choice e Visit f Loyalty 15 Types of Buying Decisions a Extended Problem Solving a purchase decision process in which customers devote considerable time and effort to analyze their alternatives Customers typically engage in extended problem solving when the purchase decision involves a lot of risk and uncertainty b Limited Problem Solving a purchase decision process involving a moderate amount of effort and time Customers engage in this type of buying process when they have had some prior experience with the product or service and their risk is c Habitual Decision Making a purchase decision process involving little or no conscious effort Example I ll buy the same thing I bought last time from the moderate same store d Impulse Buying a buying decision made by customers on the spot after seeing the merchandise Putting smaller hedonic items such as gum mints etc at the front of the store in order to stimulate impulsive buying e Brand Loyalty meant that customers like and consistently buy a specific brand in a product category They are reluctant to switch to other brands if their favorite brand isn t available f Retailer Loyalty means that customers like and habitually visit the same retailer to purchase a type of merchandise 16 Reference Groups includes one or more people whom a person uses as a basis of comparison for beliefs feelings and behaviors A consumer might have a number of different reference groups such as family friends celebrities etc 17 Segmentation Methods a Retail Market Segment a group of customers who are attracted to the same retail mix because they have similar needs b Geographic Segmentation groups customers according to where they live c Demographic Segmentation groups consumers on the basis of easily measured objective characteristics such as age gender income and education This is the most common segmenting method because consumers in these segments can be easily identified d Geodemographic Segmentation uses both geographic and demographic characteristics to classify consumers This segmentation scheme is based on the principle that birds of a feather flock together Consumers in the same neighborhoods tend to buy the same types of cars appliances and apparel and shop at the same types of retailers e Lifestyle Segmentation of the various methods this is the one that delves the most into how consumers describe themselves Refers to how people live how they spend their time and money what activities they pursue and their attitudes and opinions about the world in which they live f Buying Situation Segmentation A mom under normal circumstances may view a wholesale grocery store higher than a regular grocery But if she runs out of milk during the week she will go to a convenience store because of the situation she is in 18 Adoption by Fashion Leaders a Trickle down Theory suggests that fashion leaders are consumers with the highest social status wealthy well educated consumers After they adopt a fashion the fashion trickles down to consumers in lower social classes When the fashion is accepted in the