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 TermsXXVIII. Chapter 12 Concepts to ApplyCurrent LectureXXVII. 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 andgreater 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 TargetThese 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-linefood stores. sell fill-in items like bread, milk, beer, and eat-on-the-go snacks. i.e.) 7-Eleven- 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 countriesXXIX. Chapter 12 Concepts to Apply1) 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 atmosphereb. 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 serviceb. Supermarkets, Disc. Houses, Mass Merchandisers, Super-Store, Club-stores: Safeway, IKEA, Home Depot, Costco. Expanded assortment &/or reduced marginsand servicec. C-Stores, Vending, Door-to-door, phone, mail, some e-tail: 7-11, Pepsi vending, Avon, Lands End, QVC: Added convenience, higher margins, reduced assortmentd. Internet: eBay, Amazon, Zappos, Netflix, Dell. Expanded assortment, reduced margins, more information3) 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 theirstoresb. i.e.) ShopBob (online store) opens brick and mortar store Bop on campusc. brick and mortar store Gap sells clothing onlined. I respond by moving selling my products on the internet4) Give three examples of how external marketing factors may impact the future of retaila. Decline of the mall. Economic polarization has hurt B and C malls. b. Macro-environmental conflicts  move towards sustainable clothing5) 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 profits7) 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