MARKETNG 300 1st Edition Lecture 15 Outline of Last Lecture XXV Chapter 11 Terms part 2 XXVI Chapter 11 Concepts to Apply part 2 Outline of Current Lecture XXVII Chapter 12 Terms XXVIII Chapter 12 Concepts to Apply Current Lecture XXVII Chapter 12 Terms Retailing covers all of the activities involved in the sale of products to final consumers Specialty Shop stores that carry anything they can sell in reasonable volume were the main retailers in the U S about 150 years ago Department Stores larger stores that are organized into many separate departments and offer many product lines strong in customer services declined continuously since the 1970s Mass merchandising Concept retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets Supermarkets large stores specializing in groceries with self service and wide assortments Discount Houses offered hard goods cameras TVs and appliances at substantial price cuts to customers who would go to the discounter s low rent sore pay cash and take care of any service or repair problems themselves Mass merchandisers self service stores with many departments that emphasize soft goods housewares clothing and fabrics and staples like health and beauty aids but still follow the discount house s emphasis on lower margins to get faster turnover i e Wal Mart or Target Supercenters hypermarkets very large stores that try to carry not only food and drug items but all goods and services that the consumer purchases routinely i e Super Target These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Convenience food Stores a convenience oriented variation of conventional limited line food stores sell fill in items like bread milk beer and eat on the go snacks i e 7Eleven Automatic Vending selling and delivering products through vending machines Wheel of Retailing Theory new types of retailers enter the market as low status low margin low price operators and then if successful evolve into more conventional retailers offering more services w higher operating costs and higher prices Scrambled Merchandising carrying any product lines they think they can sell profitably Corporate Chain a firm that owns and manages more than one store and often its many Good way to achieve economies of scale i e Home Depot and Wal Mart Franchise Operation The franchiser develops a good marketing strategy and the retail franchise holders carry out the strategy in their own units Strong legal contracts govern the relationship Franchisers have been successful with newcomers Account for 1 3 of all retail sales Wholesalers firms whose main function is providing wholesaling activities the activities of those persons or establishments that sell to retailers and other merchants or to industrial institutional and commercial users but that do not sell in large amounts to final consumers Merchant Wholesalers own take title to the products they sell i e Fastenal Agent Wholesalers wholesalers who do not own the products they sell Main purpose is to help in buying and selling Common in international trade b c usually experts on local business customs and regulations in their own countries XXIX Chapter 12 Concepts to Apply 1 What is retailing and what are components of the retailers whole offer Give an example of how these are modified to attract a specific target What is the first year failure rate of new retailers Why is it so high a Retailing is activities involved in the sale of products to final consumers A retailers whole offer is convenience product selection fairness in dealings helpful information prices social image and shopping atmosphere b A college bike shop is going to be open around noon and stay up late They choose the music they play and bikes they sell around college bike riders 2 Give an example of a retailer for each of the four basic retail categories What are the assortment service convenience and margin strategies for each retail category and how does the strategy link to consumer needs a Specialty shops Department Stores Ritz Camera Coach Gap Macy s Expanded assortment and service b Supermarkets Disc Houses Mass Merchandisers Super Store Club stores Safeway IKEA Home Depot Costco Expanded assortment or reduced margins and service c C Stores Vending Door to door phone mail some e tail 7 11 Pepsi vending Avon Lands End QVC Added convenience higher margins reduced assortment d Internet eBay Amazon Zappos Netflix Dell Expanded assortment reduced margins more information 3 Give 3 examples of how the line between online and brick and mortar retailers has blurred As a brick and mortar store how would you respond to Amazon s move to physical stores a Brick and Mortar and using the internet and tech to add internet features to their stores b i e ShopBob online store opens brick and mortar store Bop on campus c brick and mortar store Gap sells clothing online d I respond by moving selling my products on the internet 4 Give three examples of how external marketing factors may impact the future of retail a Decline of the mall Economic polarization has hurt B and C malls b Macro environmental conflicts move towards sustainable clothing 5 Give an example of the wheel of retailing concept a Moves up the wheel when the target evolves and requires more things For examples GAP became nicer and they added in Old Navy to replace the lower end products 6 Give an example of scrambled merchandising Why is it used by retailers a Scrambled merchandising higher profits 7 What criteria affect whether a retail chain chooses franchising or a corporate chain strategy when deciding how to expand a Large Retail Chain if you re trying to expand it s all you It will require a ton of capital of your own to build new stores b Franchise operations if you want to run a promotion the franchise might say no But quicker expansion About 1 3 of all retail companies are franchises 8 How do merchant wholesalers differ from agent wholesalers What function s do wholesalers provide in the channel a Merchant Wholesalers own their own products while agent wholesalers don t