TXMI 5250: Text Review
103 Cards in this Set
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infiniti challenge
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Chinese show where a group of guys were each given a certain amount of money and each one had to plan a day without going over that amount
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3 criteria for a successfully reaching target market
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1. measurable: retailer should seek a measurable market segment; rely on objective measures for which there is available data
ex: objective demographic data (age, gender, income, education, ethnic group, religion)
2. accessibility: the degree to which the retailer can target its promot…
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lifestyle center
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Lifestyle Center: open air malls with a great atmosphere
target market: women between the ages of 25-55 years old***
PLANNED
upscale national chain specialty stores
dining and entertainment in outdoor setting
anchored: not usually but may include bookstore; cinema, small department…
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microenvironment
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can control (price, promotions, management, products)
are you a good fit? city, country, location
macro global location factors:
economic systems around the world:
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macro: cannot control
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1. are you a good fit? city, country, location
2. macro global location factors:
3. economic systems around the world:
most important macro global location factor--WHAT IS?? economic is lol
centrally planned economy (ex: China) china is not a centrally planned economy. N. Korea is.…
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economic systems around the world:
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most important macro global location factor--WHAT IS?? economic is lol
centrally planned economy (ex: China) china is not a centrally planned economy. N. Korea is. Ms. Kim said China is mixed, but that's a legal system, so i was going to email her.
socialist (Mexico, Germany) vs. Capi…
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code law:
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every action is directed by a preexisting law; ex: Italy and France
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common law
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tradition, legal precedents, past practices; ex: British legal systems
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Islamic Law
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law based on the Quran; ex: N. Sudan, Saudi Arabi, Iran
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Marx
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everything is controlled by the government (ex: NK, China)
-ex: China is a mixed law, use to be marxist law
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Labor and Land Factor and examples
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of countries that are strong and weak
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Labor (under social environ. of macro)
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-how many unskilled workers are in a country
-countries with low minimum wage are strong in labor-- Mexico 70 cents/hr but the benefits triple that rate
-Hong Kong imports Chinese workers for cheap wages
-service industry flourishes when there is great disparity between rich and poor
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Land
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-Land factor- how much space is there for development?
-have enough natural resources to sustain itself
Japan: Economy said "GO" but competition said "NO"; has a weak land factor because small island = a small development area
competition for space and sustainability
US and India (…
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Entrepreneurship factor- (under social environment of macro)
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can someone expound on this????? idk what it means help
creative management ideas in US; French hypermarkets very successful
US sends lots of management overseas*
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retailers trade area
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The geographic area from which a retailer, group of retailers, or community draws its customers in which to operate; the neighboring geographic area that counts for the majority of a store's sales and customers
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retailers trade area looks for the the most attractive______
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1.markets in which to operate
2. sites available within each market
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For some retail trade areas it includes
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geographic expansion into foreign countries
do you want to stay domestic or go international?
ex: Kohl's and Kroger are concentrated in the USA
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Factors to impact trade area:
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traffic, population density, type of merchandise sold
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fringe (tertiary trade area) is:
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third in the market behind the primary and secondary markets- tertiary means third so I'm just assuming it's the rest of the trade area that the first two aren't taking up
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brick and mortar stores in canada:
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Spends less each year on e-tail purchases
1.2% of retail sales
ex- Future Shop, Amazon, Ebay
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brick and morter stores in Mexico:
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1/5 of Mexicans have access to internet; a half of them will make purchases online
Mercado Libre - basically ebay; has their own kind of credit
Limitation: 70% of the population is unbanked
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Relationship retailing:
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all activities designed to attract, retain, and enhance customer relationships; can be achieved in two ways:
1. financial objectives
2. social objectives
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financial objectives of relationship retailing
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to increase the customer's economic rewards; reward cards for loyal customers
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social objectives of relationship retailing
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increase the retailer's interaction with the customer by offering customers a combination of excitement and entertainment; providing sensory retail experience (entertainment, things to do in the store, demonstrations)
where should retailers look for a source of potential sales?
-compet…
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It costs 5x more to attract new consumers than ___________________
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to get ones to return
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single most effective type of advertising:
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word of mouth (all about the WOW)
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global reailers use ________________ and look for ______________________
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standard retail formats
universal segments that will accept their retail format as is- easy to open same store country to country
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global retailers concentrate on _____________ as opposed to _________ because its easier to open in _______________
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world class cities
geographic regions
world class cities
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global retailers use ______________ where the _____________
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centralized mgmt
headquarters make all big decisions
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global retailers are _______________ and _______________
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-vertically integrated
make their own products and retail their own products
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global retailers have _____________ and are _____________ size but the ___________ doesn't change from store to store
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private labels
small-medium
retail
ex: Zara and Prada
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A multinational retailer's home country is too ________________ so they need to branch out and become ____________ where all the decisions are made by ___________________ so merchandise and management are different
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saturated (too much competition)
decentralized
each individual store
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A multinational retailers usually concentrates on ___________________ where they change ________________ based on the __________________ and are _______________
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expansion in geographic areas
merchandise
culture/consumer
typically large scale--
ex- WalMart/Saks
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transnational retailer:
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global and multinational retailer mixed together
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in a transnational retailer major decisions ______________ but they _________________ based on ___________
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come from HQ
change merchandise
target market
ex- Franchesca's
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Franchescas is a transnational retailer because it
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changes its merch store to store but is centralized by HQ
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Handle customer complaints when the retailer or product fails to live up to expectations by acknowledging the ____________
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importance of the customer. (telling them you are there to help) try to ease the customer's frustration
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Handle customer complaints when retailer or product fails to live up to expectations by understanding ____________
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the customer's problem. (ask questions, don't assign any fault at this stage)
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Handle customer complaints when the retailer or product fails to live up to expectations by repeating ______________
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the problem (as you understand it) to the customer.
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Handle customer complaints when the retailer or product fails to live up to expectations by thinking of all __________ and ____________ but make sure the customer leaves _______________
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possible solutions
agree on the solution. (determine the solution that is fair to both parties)
feeling as you would want to feel if you were the customer
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some retailers have _______________ handle the complaint- often salesperson doesn't have the _____________and _________________, also salesperson cannot
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individual salesperson
authority to settle and
has to call someone else in
serve current customers
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the customer deserves
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courteous treatment, a fair settlement, and prompt action
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customer service consists of all those activities performed by the retailer that influence 1. _____________ 2. ________________ 3.____________________ during pre transaction, transaction, and post transaction
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(1) the ease with which a potential customer can shop or learn about the store's offerings (2) the ease with which a transaction can be completed once the customer attempts to make a purchase (3) the customer's satisfaction with the transaction
strong customer service= WOW! (all about …
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3 goals of a successful retailer:
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1) get customers into store
2) convert customers into shoppers
3) convert shoppers into loyal customers in the most efficient manner possible
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retailers should do these things for their customers:
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-have the right people
-make their visit an experience
-make decisions with customers in mind
-make "the customers" an agenda item for every staff meeting
-empower employees to do the right thing
-keep doing the unexpected
-never let an untrained employee have customer contact
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Stock room- retail store planning requires__________
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allocating back room space:
department store (was 50% of store, now 20%),
small speciality/convenience stores (was 10%, now 5%)
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stock rooms are __________ because __________ and instead ________________
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decreasing in size
rent is increasing heavily in CBD's (central business districts)
warehouse racks are being used for inventory
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soft line fixtures need to be _________ and consist of _____________
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hung on hangers
-racks for hanging clothes, mannequins
-neater than hard-line fixtures (racks for shelves)
- bulk or capacity fixture (round rack) intended to hold the bulk of the merchandise without looking heavy as a long straight rack of merchandise
- 4 way rack is known as a featu…
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face out rack is when you see the garment ____________________________
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from the front or from the back **preferred but not all racks can be face outs
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-sleeve-out rack is a _________; where you only see __________
- round rack and 4 way feature rack have replaced ____________________
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round rack
the sleeve
straight/long pipe rack
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space productivity index
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is a ratio that compares the percentage of the store's total gross margin that a particular merchandise category generates to its percentage of total store selling space used.
fool proof? NO depends on season, FAD
(GM $ as % of total)/(sq. ft as % of total) -want it to be 1, over 1=gi…
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space productivity index formula
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(GM $ as % of total)/(sq. ft as % of total) -want it to be 1, over 1=give more space. under 1=decreasing space
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American with Disabilities Act (21% of US):
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prohibits employers from discrimination in employment on the basis of handicap/disability
provides customers:
-public facilities accessible to all
-wheelchair ramps; no stairs
-door widths (32")
-restrooms and parking lot
-need to create websites for blind, etc.
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Mexican Consumer Behavoir
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super stores, street vendors and luxury retailers all in the same city,
street vendors: prices are not fixed, but negotiated (tax free), make up 60% of sales, informal market is very popular, luxury retailers are booming here, taxes are much higher (average is 15%, their market is not c…
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ways to internationalize into Canada
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Canada: activewear such as ROOTS (dressed US and Canadian Olympic teams) and
Few stores have successfully internationalized because of psychic distance paradox (don't try as hard to research and plan because our culture (US) is similar to theirs)
Ones that HAVE been successful: Lulu L…
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ways to internationalize into Mexico
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go through joint ventures and strategic alliances
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joint venture
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companies come together for a finite time
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strategic alliance
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is when they remain 2 separate organizations (in between mergers/acquisitions and organic growth)
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Uniqlo
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similar to H&M; prospered when the recession caused luxury store sales to rapidly decrease
-people will mix cheap and luxury items- especially basic items
company specializes in that^^
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what has luxury industry done to combat the recession?
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stopped opening stores, designers themselves have been diversifying their
portfolio (Isabel Marant x H&M), affordable luxury sector
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Theoretical rule of retail dresses 2 goals when designing a retail store which are______ __________
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1. Store image
2. Space Productivity
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theoretical rule of retail:
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put all your inventory out on your store and people will buy it (the more merchandise on your sales floor, the more you sell) this isn't really true!
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Types of retailers in Mexico and characteristics:
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Wal-Mex:
-internet retailing:
-super/hypermarkets:
-new regional malls and power centers
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Wal-Mex:
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largest private employer with 150,000 employees in 948 stores
-new regional malls and power centers
~inflow of money is plentiful (Office Max and Home Depot)
~targeting low income and middle class
~land is scarce in cities- distrust of Americans (joint ventures are a must)
~u…
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Mexican internet retailing
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⅕ have internet access and ½ of those people make their purchases online
*70% of population is unbanked
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Mexican super/hypermarkets:
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chains only generate 30% of sales (street vendors are HUGE)
~changaros: tiny, independent jobs
~tianguis: open markets- impulse buyers, no taxes, hard to control inventory
~retail food sector- oligopoly; top 4 companies control 60% of market (Wal-Mex, Comerci, Gigante, Soriana
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Mexican retail food sector is an _______________; top 4 companies control __________ of market __________, ______________, _______________, _____________
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~retail food sector- oligopoly; top 4 companies control 60%
Wal-Mex, Comerci, Gigante, Soriana
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retail focus in mexico :
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1.Wealthy areas: Mexico City, Guadalajara, Monterrey-upmarket
2.Mexico City: the home of luxury!
brands that flaunt their logo in Mexico will succeed!
3. Presidente Masaryk Street ( like Rodeo Dr)
most desirable location in city!!!
Includes: Gucci, Chanel, Tiffany & Co., etc.
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trade area:
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neighboring geographic area that accounts for the majority of a store's sales and customers
best way to define is by travel time but easiest is distance
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Geographic Information System is a _____________________ and
Identifies:
1. _________________- Identifies and ranks the most attractive cities, countries, or other geographic areas
2. ___________________ - Identifies best possible site or evaluates alternative sites for their expect…
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computerized system that combines physical geography with cultural geography
1. market selection
2. site analysis
3. trade area definition
4. new store cannibalization
5. advertising management
6. merchandise management
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GIS is split into ________________ :
A visual of the area using things such as shading and lines to display _______________ and _____________
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thematic maps
cultural characteristics
physical space
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Centrally planned economies
· Economic Vitality: inflation (low), unemployment (low), disposable/ discretionary income (high)
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(Korea, gov't control, China mixed)
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Socialist
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(Mexico and Germany, social welfare for citizens)
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capitalist
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(US, gov't give money to make profit) countries
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Economic Vitality:
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inflation (low), unemployment (low), disposable/ discretionary income (high)
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Code law-
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every action is based on preexisting law (Italy and France)
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common law is a British legal system that is ______________
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dictated by traditions, past practices, and legal precedence (law changes as society changes)
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islamic law
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N Sudan, Saudi Arabia, Iran etc.
everything is dictated by Quran
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Marxist Law
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N Korea (China used to be Marxist but now a mixed law)
everything is dictated by the say of the government
Government can force retailers to give up ownership- more Marxist and when government controls the most
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Mexican Department Stores
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1) El Puerto de Liverpool ($2,361 mill): largest dept store with 56 stores, they are upscale, increased domestic sourcing to offset economy: now 80% comes directly from own country
2) El Palacio de Hierro ($721 mill)- very high end, attracts mostly Mexican customers, compared to Blooming…
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Canadian Department Stores
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Hudson Bay Co. (1670): most respected & largest, very high end, oldest, with 500 locations & 70,000 employees
Sear's Canada: 2nd largest; acquired Eaton's dept store
Reitman's: largest women's apparel retailer; 200 stores and licensed brand name in Asia, UK, Middle East as
La Senza: l…
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magnet markets are when:
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street vendor coalitions that all have the same type of merchandise, i.e. all leather
- easier to bring people in this way
-mobile market circuit in residential areas
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25-25-50 rule
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25% of sales spent on advertised sales merch, 25% unadvertised, 50% regular priced items
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atmospherics(store design)
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-sensory consumption: all physical/nonphysical elements that can be controlled to enhance consumer behavior
-scent: humans can smell 2,000-4,000 aromas; linked to memory and emotion
-tactile
-music
-lighting: foot candles- unit of measurement (one lumen per square foot); have to re…
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dwell time
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during a transaction, the amount of time a customer must spend completing a purchase; most important on non-essential items like books
need customers to perceive that their dwell time is shrinking
register rage: 81% of women, 91% of men will leave if line is too long
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central business district
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unplanned business area around a geographic point where public transportation meets
high rent, hard to find parking, not all the stores a customer might want to see
Advantages: lots of foot traffic, variety in merchandise, easy access
Disadvantages: higher crime rate, more competition,…
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organic growth
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the process of business expansion by increased output, customer base expansion, or new product development, as opposed to mergers and acquisitions, which is inorganic growth.
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La moda is a
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Russian retailer that delivers the clothes to your home and gives their opinions
personal selling example (trained and skilled in suggestive selling which results in a positive shopping experience)
Delivery men are fashion stylists
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free flow layout
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Simplest of all the layouts
No defined traffic pattern
Great for small stores under 5,000 ft
Fails to provide ques as to where one department starts and the other ends
You can't see everything so might cause shrinkage
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the grid layout
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The counters and fixtures are in long rows or lines
Usually at right angles of each other
Customers go up and down the isle like a maze
Bad when you want to run in quickly and buy a certain thing
Shrinkage would be medium
ex) supermarkets and drugstores
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the loop layout
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Layout in which a major customer isle begins at entrance and loops around store all the way
Circle or rectangle
Good for enhancing the productivity of the store bc exposes the shopper to the greatest amount of merchandise possible
Increases browsing time
Bed bath and beyond, Kohls 2 …
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spine layout
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One main aisle runs from front of store to the back of store
Great for medium sized stores
Free flow and grid on either side of aisle
Saks
Bad for shrinkage, so many fixtures
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US consumer behavior patterns
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Consumers are "Right Headed" (right handed)
- Stock store brands to right of name brands so consumer has to reach across store brand for name brand
-More prone to look right, display higher gross margin merchandise on right side of aisle
-Displays set to be visible on right side of pre…
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4 US consumer behavior patterns
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1. neatness counts
-Organized chaos: look like mess so items look cheap and perceived as great bargain
-Handwritten signs create impression of recently lowered prices
2. Focus on large central display
-Point of purchase displays at end of each aisle (end caps) focus of shopper's atten…
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Dennys
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restaurant Mr. Wong talked about
1963: been in international business; 2008 to launch
mission: family dining, come as you are, affordability
largest family dining restaurant chain in the world
bulk of stores are in Japan
known for Grand Slam breakfast
is currently working to m…
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Why internationalize Dennys?
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27.3% increase of international restaurant growth from 2009-2014
finding the right partners and making sure that the partners are in it for the right reason
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internationalizing Dennys requires as
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1.flexible menu development to suit local tastes
certain items that won't be compromised
if you dilute it too much, it's no longer a Denny's
10% of the menu is made up of local items
how do the items fit into the overall vision of the family?
2. retail cultural relevance through …
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internationalizing a company usually happens in
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countries that had a thriving middle class in a growing economy
India, China, UK, Australia, Middle Eas
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master franchise
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business gives rights to a single individual or group of individuals
individual has the right within a certain country
individual will split their royalty fees between themselves and the business
provides all the support services for development
lose control of your business very qui…
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area developer
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business finds someone in the country who has the capability, infrastructure, man power, supply source to develop a new business within a new area
control of developing the brand but business makes sure that they develop the brand right
ex: Denny's
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license:
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not great on a branding perspective
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resources for international development
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International Franchise Association — IFA
International Consultants — local and country base
use "Skype" to screen out candidates
kiss, bow and shake hands
book that tells you things to avoid while meeting candidates while overseas
how to greet people, exchange business cards, etc.…
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examples of culture faux pas
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exchanging business card and placement
proper hand shake
respectful of cultural/religious holidays
crossing your legs
gift — no clocks
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TXMI 5250: Test 1