Questions you should be able to answer:What is positioning?- The design and implementation of a retail mix to create an image in the customer’s mind of a retailer relative to its competitors (brand building)What information is used to analyze a firms profit path?- Income statementWhat is cumulative attraction?- the principle that states that a cluster of similar and complementary retailing activities will generally have a greater drawing power than isolated stores that engage in the same retailing activitiesWhat is cross-docking?- occurs when products are prepackaged for a specific store, given a UPC label, and then placed on a conveyor system that routes them from the unloading dock at which they were received to the loading dock for the truck going to their specific storeWhy would a retailer look at inventory turnover?- It is used to evaluate how effectively retailers utilize their investment in inventoryDescribe an example of customer loyalty.- a store that customer are reluctant to not shop atWhich ratio would a retailer look at to compare their performance to another retailer?- Strategic profit modelWhich ratio is included as a key part of the strategic profit model?- net profit/ total assetsWhat is centralization?- the degree to which authority for making retail decisions is delegated to corporate managers rather than to geographically dispersed regional, district, and store managementDefine CPFR?- Collaborative Planning, Forecasting, and Replenishment is the sharing of forecast and related usiness information and collaborative planning between retailers and vendors to improve supply chain efficiency and product replenishmentWhat is the difference between a push and pull supply chain?- Push supply chain: merchandise is allocated to stores on the basis of forecasted demand- Pull Supply chain: orders for merchandise are generated at the store level on the basis of POS sales dataDefine a primary trade area?- the geographic area from which the shopping center or store site derives 50-70% of its customersDefine asset turnover?- assesses the productivity of a firm’s investment in its assets- net sales/ total assetsWhat are the factors that enter into the calculation of net sales?- Gross Sales + Promotional Allowances - ReturnWhat retailers are typically in a power center?- big-box retail stores (Target), off-price (Marshalls), warehouse (Costco), specialists (Lowes, Best Buy)Exam 2 Company namesBloomingdale'sBubba's Bar and GrilleHome DepotLowe'sRainforest CaféRhode's FurnitureRussell AthleticSilver Exchange Coin ShopTargetVictoria SecretWestern TrackExam 2 TermsRetail strategy: a statement identifying 1) the retailers target market 2) the format the retailer plans to use to satisfy the target market’s needs and 3) the bases on which the retailer plans to build a sustainable competitive advantageVendor relations: developed over a long time and may not be easily offset by a competitor Competitive advantage: advantage the retailer has over its competition that is not easily copied by competitors and thus can be maintained over a long period of timeCustomer loyalty: customers are committed to buying merchandise and services from a particular retailerPositioning: the design and implementation of a retail mix to create an image of the retailer in the customer’s mind relative to its competitorsMarket penetration: growth opportunity directed toward existing customers using the retailer’s present retailing formatVertical integration: diversification by retailers into wholesaling or manufacturingCross-selling: sales associates in one department attempt to sell complementary merchandise from other departments to their customersDiversification: retailer introduces a new retail format directed toward a market segment that’s not currently served by the retailerStrategic profit model: method for summarizing the factors that affect a firm’s financial performance, as measure by return on assetsNet sales: total revenues received by a retailer that are related to selling merchandise during a given periodGross margin: net sales minus the cost of the goods soldIncome statement: where the information used to examine the profit margin management path comes fromRetail operating expenses: include selling, general, and administrative expenses plus the depreciation of the retailer’s assetsBalance sheet: where the information used to analyze a retailer’s asset management path comes fromInventory turnover: Cost Of Goods Sold during a time period divided by the average level of inventory at cost during that time periodAsset turnover: net sales divided by total assetsFreestanding locations: retail sites for an individual, isolated store unconnected to other retailers, might be near other freestanding retailers or a shopping centerGentrification: the renewal and rebuilding of offices, housing, and retailers in deteriorating areasCBD: the central business district is the traditional downtown business area in a city or townPower centers: shopping centers that consist primarily of collections of big-box retail stores, such as full-line discount stores (Target), off-price stores (Marshalls), warehouse clubs (Costco), and category specialists (Best Buy, Lowes)Lifestyle centers: shopping centers that have an open air configuration of specialty stores, entertainment, and restaurants, with design ambience and amenities such as fountains and street furnitureAirport retailing: stores in an airport have higher rent, higher costs, and inconvenient location for workers, higher wagesDestination store: places where consumers will go even if it is inconvenient, just like enclosed malls are destination locations for fashion-apparel comparison-shoppingPop-up shop: stores in temporary locations that focus on new products or a limited group of productsShopping malls: enclosed, climate controlled, lighted shopping cemters with retail stores on one or both sides of an enclosed hallwayCumulative attraction: principle that states a cluster of similar and complementary retailing activities will generally have greater drawing power than isolated stores that engage in the same retailing activitiesParasite store: a store that does not create it’s own traffic and whose area is determined by the dominant retailer in the shopping center or retail areaTraffic flow: the number of vehicles and pedestrians that pass by the siteTraffic count: used to assess a site’s attractiveness, important for businesses that offer