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Burberry's New Look (article)
allows customers to experience the brand show how retailers can be cutting edge and new, while still staying true to its roots retail is knife fight, Burberry will be copied when other companies see that this store model is successful primary trade area
Primary trade area (article)
The geographic area where the retailer cans serve customers in terms of convenience and accessibility better than the competitors
WWD.COM-Retailer vs Vendor (article)
Sherman Anti Trust Act - Price fixing Protects manufacturers, but hurts retailers (mom & pops) Represents Law of Diminishing Returns Court ruled that price fixing is legal
House Parties With A Commercial Twist (article)
Want to reconnect with consumers after losing to private labels
"Dowdy" Talbots (article)
What strategies are talbots using to deter their decline? Consistent marketing, make products more playful and colorful, targeting a new client, redesigning classic items, change their consumer changes
Why China Doesn't Like Barbie, Best Buy, or DIY? (article)
consumer research says Barbie failed huge difference between American's middle class and China's middle class Best Buy & Home Depot failed
Hitting the Mark
counterfeit legal to buy, not to sell bigger problem in e-commerce some people don't even know that they are buying counterfeit
US view of Capitalism
Predatorial
Germany view on Capitalism
Paternal
Japan view on Capitalism
Protected
Law of Diminishing Returns
Want people to buy more at a lower price Consumers who have one unit tend to place a lower value on additional unit
Non-price decisions definition
Using price as a weapon to gain loyal customers, doesn't always work - customers pay more if they value their time
Non-price decisions
1) Differentiate with merchandising mix 2) Private label merchandise 3) Provide other benefits 4) Master stock-keeping
Retail competition
Interplay of supply & demand Retail competition is typically local Retail industry is monopolistically competitive Retailers today try and achieve differential advantage over competition
Why do retailers use private retailers?
Private labels help retailers minimize competition and increase brand loyalty, key business asset for diversifying, expand recognition
Corruption Perceptions Index
Transparency International published the CPI which is ranked by their perceived levels of corruption, as determined by expert assessments and opinion surveys
CPI definition of corruption
The misuse of public power for private benefit
Best and worst corruption countries according to CPI
Best - New Zealand & Denmark Worst - Somalia and Afghanistan
Countries from best to worst based on bribery
1) North America 2) EU 3) South Europe 4) Latin America 5) Asia Pacific 6) Africa
Middle East laws impacting retailing
All mannequins must wear appropriate head wear and have enough coverage Islamic law based on Koran Religious police enforce laws Women have more restrictions
Marxist Law
North Korea and Cuba rules for retailing depend on the ruler
Religious laws impacting retailing in Germany
Closed on Sundays
Blue laws
Laws in the US that regular Sunday Closings (alcohol and car dealerships)
Pure competition
When a market has similar product; many buyers and sellers, all having perfect knowledge of the market; and ease of entry for both buyers and sellers
Pure monopoly
Very rare Does not exist in US because of Sherman Antitrust Act One seller will set the selling price
Outshop
When there is only one brick and mortar option, and consumers choose to purchase online
Near Monopoly
Outshopping Leaving small towns to go where there is better selection offered
Monopolistic competition
Most retailers Many sellers, selling different products, but consumers believe are interchangeable
Oligopolistic
Local retail, homogenous products sold Top 4 companies have 60-80 percent market share
"Follow the leader"
Smaller retailer follow the trends of bigger retailers ex. Lowes, Home Depot
Intratype competition
Same type of retailers selling the same merchandise to the same market All under the same NAICS code MAC vs Sephora
Intertype competition
Retailer with different NAICS codes and different merchandise but targeting the same market EX. Macy's vs Target
Divertive competition
Stealing customers from another retailer by selling scrambled merchandise and being more convenient
Non-store retailing NAICS code
454
What is Costco's competitive advantage?
Only sell 4000 of their most popular items (rationalize) in bulk Most retailers sell around 40,000 Get deals from companies for buying bulk No visual merchandising No signage - no frills Paid memberships
Retail Life Cycle
1) Intro 2) Growth 3) Maturity 4) Decline
Retail Life Cycle: Intro
Aggressive, bold entrepreneur No profit (e-tailing, recyclers, liquidators)
Retail Life Cycle: Growth
Lots of competition Sales increase Highest profit area (overhead is small) EX. Food courts, airport based retailers, super centers
Retail Life Cycle: Maturity
No new costumers Will have sales Have to keep things exciting EX. Starbucks, warehouse clubs, supermarket, category killers, convenience stores, fast food
Retail Life Cycle: Decline
Goal is to postpone as long as possible Changing target market, products, promotion EX. Variety stores, factory outlet malls, department stores
Law of Diminishing Returns
States that in all productive processes, adding more of one factor of production, while holding all others constant, will at some point yield lower incremental per-unit returns
Ceteris Paribus
Adding more of one factor of production, while holding all others constant
Sherman Antitrust Act
Based on railroad monopoly Price fixing overturned Minimum advertising price No control over prices Legal for company to pull out Can't limit and place where they can sell Call tell your products should be sold in one store
Vertical Price Fixing
An illegal arrangement in which parties at different levels of a system of production and distribution act to fix the market price of goods Legal after 2008 court case
Dual Distribution
Describes a wide variety of marketing arrangements by which the manufacturer or wholesalers use more than one channel simultaneously to reach the end user May sell directly to the end users as well as to companies for resale To be punished - stores need to prove that they are being hur…
Puffery
False claim, false usage, false benefits for ad to be illegal Claim is deceptive, claim in material
Palming off
Counterfeit 7% of market share 512 billion a year
Countries guilty of "palming off"
Argentina - Pharmaceuticals Brazil - clothing
Predatory Pricing
Can go into a store, document prices, and then lower the prices of your own store
Bait and switch
Advertise a product and then not follow through or have enough supply to meet the demand
Exclusive dealing
1) One way: retailer gets right to sell product in a store and does nothing for the supplier 2) Two way: Clayton Act - illegal - telling a retailer your product will only be sold with them and they cannot sell your competitor supplier offers retailer exclusive distribution if retailer …
Steps in selecting a target market
1) Select a specific, unique, distinguishable market 2) Select high traffic geographic or online sites 3) Select markets that are measurable, accessible, and substantial
Central Business District (CBD)
Typically built around public transit system, where the city began Collection of whatever stores and anchor stores Usually stores tailor to local market
What hurts Central Business Districts (CBDs)?
Discount stores, parking, crime
Neighborhood Business District
Serve the needs of the community - anchor can be grocery store
Lifestyle shopping center
Out door planning, around 70 tenants, people feel safer, quick & easy EX. The Avenue
Malls
55% of retail Regional/super regional Rent is based on sales No new malls since 2006
Anchors
Department stores or entertainment
Regional Malls
Mall in a local area - people do not go out of their way to visit EX. Georgia Square
Super Regional Mall
Caters to a mass community EX. Mall of Georgia
Competition in relationship to capitalism
Allows big business to prosper, but hurts mom and pops
American expansion into Russia
Very difficult Russia kicked out most western stores of their country (McDonalds) Even when companies go into Russia, there are so many fees and regulations which makes it impossible
Micro EnvironmentalFactors
Parts of marketing mix you can control Knowing your competition and culture of location
Macro environmental factors
Cannot control Must turn technological, social, competitive, and governmental limitations to advantage
Foreign Direct Investment (FDI)
Completely know your store, but there are disadvantages
Joint Ventures (JV)
Best way to internationalize Great way to make connections with culture Go into a business with a local who knows culture etc
Franchise
Get permission from mother company to open their store EX. Fast food chains
License
Legal agreement that an entity can use your product
Global retailers
Standard retail formats open up whether city can sustain store, not if it has the right demographic centralized management, small medium size, vertically integrated (control every part of production) private labels (Zara, Prada)
Multinational retailers
within a geographic area, change merchandise based on customer and culture, typically large scale EX. Walmart or Saks
Trade area
A neighboring geographic area that accounts for the majority of a store's sales and customers Primary trading area: within 3 miles or less
Geographic Information Systems (GIS)
A source of information about trade areas Identifies market selection, site analysis, trade area definition, estimates new store
How do retailers compete in an overstored environment?
Something better, different, cheaper Being non-tradional and having unique omni channels
Civil law
also referred to as Code law France, Italy, Canada copyright and patents are a must Everything fits into laws Very little power towards judges to interpret the law Predetermined domestication
Common law
Britain & US Rules and laws are up for interpretation (judicial review) Copyrights and patents are given to who has the product first
Islamic Law
N. Sudan, Saudi Arabia, Iran Follow Quaran Religious police no interest or alcohol Restrictions on women and expression Predetermined domestication
Shriya Law
Quaran interprets every area of life and law
Marxist Law
N. Korea, Laos, Cuba, China Communist/socialist Government owns private property Predetermined domestication
Predetermined Domestication
Can force retailer to give up ownership of business without explanation
Why won't e-tailing gain the majority of retail sales?
Brick and mortars have customer service, touching products, gratifying, and security
Showrooming
When people come and look at in store products and then go and buy online Doesn't hurt because it brings costumers to store
How can small businesses compete with discount stores or category killers?
1) Customer service 2) Customization 3) Loyalty 4) Price for benefits offered 5) Service level 6) Product selection 7) Location 8) Customer experience
Brazil
collectivist polychronic high power distance (races) advertise via mobile love sports sexual celeb ads does not shun sexuality of female form
Kazakstan
Collectivist, polychronic Big guest culture Patriarchy Elders first Heavy on laws TV ads Change how they look
Turkey
Polychronic, collectivist TV and online ads Celebs capture audience's attention Composition of ad
Saudi Arabia
high context, polychronic Women have no power Cover knees, collar bones
Kuwait
Polychronic, collectivist, high context Islamic Online ads Confashions of Kuwait
Azerbaijan
Polychronic, collectivist, power distance 3.7 million internet users TV & Newspaper ads Dress formally
Panama
High context Hierarchical
China
Polychronic Collectivist Online mobile advertising preferred
NAICS code for women's apparel
448

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