retailinglibvolume8.xyz/textile/btech/semester7/retailmanagement/retail... · definition of...
Post on 30-Apr-2020
4 Views
Preview:
TRANSCRIPT
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Irwin/McGraw-Hill
RETAILING
Walton’s .5 & .10
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Definition of Retailing
Retailing includes . . . .
all activities involved in selling, renting, and providing
all activities involved in selling, renting, and providing
goods and services to ultimate customers for personal,
family or household use.
In the channel of distribution, retailing is where the
customer meets the product. It is through retailing that
exchange occurs.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Retailing Creates Value
• Retailing’s economic value is represented by:
1. People employed in retailing, and
2. The total amount of money exchanged in
retail sales.
• Utilities provided by retailers create value for
customers. Time, place, possession, and form
utilities are offered by most retailers.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Which Company Best Represents Which Utilities?
Wells Fargo
Saturn
Levi Strauss
www.levi.com
Toys “ R ” Us
www.toysrus.com
One of the best-run banks in the United States, Wells Fargo is intensifying
it’s drive to reach retail customers by opening minibanks in supermarkets.
This new form of banking is designed to complement ATMs, which already
dispense 75% of the bank’s cash.
Saturn dealers have adopted a one-price strategy that eliminates the need for
negotiating. Instead, all customers are offered the same price. Test drives,
financing, trade-ins, and leasing are all offered to encourage customers to
purchase a Saturn.
Levi Strauss & Co. now offers the Levi’s Original Spin program which
allows customers to create their own jeans by selecting from three models,
five leg types, two flys, and many color and fabric options. The jeans are
delivered in 2 to 3 weeks for $55.
A distinctive toy store with a backwards R, this company is what every kid
dreams about. Walking into a Toys “R” Us store is like living under a
Christmas tree. Unlike most stores, which reduce their space allotted to toys
after the holiday season, a huge selection of toys is always available at
Toys “R” Us.
Can you match them?
Time Place Possession Form
_____ _____ _____ _____
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
The Largest Retailers (2005 Sales)
Category Retailer(s) Sales ($, in billions)
Department stores Sears (K-Mart) J C Penney
49.124 18.781
Apparel Limited TJX
9.699 16.058
Consumer Electronics Circuit City Best Buy
10.472 27.433
Drug and Discount Wal-Mart Target
315.654 52.620
Home Improvement Home Depot Lowe’s
81.511 43.243
Home Shopping Service Merchandise Fingerhut
3.327 1.912
Specialty Retailers Costco Toys R Us
52.935 11.194
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Global Economic Impact of Retailing
• Four of the 30 largest businesses in the U.S.
are retailers.
• In 1997, Wal-Mart’s $119 billion in sales
surpassed the gross domestic product of
Finland for the same year.
• Sears, Wal-Mart, Kmart, and JC Penny
together employ more than 1.6 million people.
• Wal-Mart has 603 stores outside the U.S.,
including joint ventures in China and Korea.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Sales ($billions)
Automotive dealers
Food stores
General merchandise group
Eating and drinking places
Gasoline service stations
Building material, hardware, etc.
Furniture and home furnishings stores
Apparel and accessory stores
Drug and proprietary stores
Liquor stores
Other
3.8
24.5
16.7
12.9 9.2
6.2
5.9
5.7
4.9
.9
9.6
Retail Sales By Type of Business
0 325 650
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Classifying Retail Outlets
Retail outlets can be classified in several
ways:
-- Form of ownership. Who owns the
outlet.
-- Level of service. The degree of service
provided to the customer.
-- Merchandise line. How many different
types of products a store carries and in
what assortment.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Form of ownership Independent retailer
Corporate chain
Contractual system
• Retailer-sponsored cooperative
• Wholesaler-sponsored voluntary chain
Franchise
Level of service Self-service
Limited service
Full-service
Merchandise line Depth
• Single line
• Limited line
Breadth
• General merchandise
• Scrambled merchandise
Classifying retail outlets
METHOD OF CLASSIFICATION DESCRIPTION OF RETAIL OUTLET
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
The possibilities and costs of franchising
FRANCHISE TYPE OF BUSINESS
TOTAL START-UP COSTS
NUMBER OF FRANCHISES
McDonald’s Fast-food restaurant $385,000-$520,000 19,500
Merry Maids Cleaning Service $27,500-$40,500 700
Jiffy Lube Automobile fluid service $208,000-$229,000 667
Mail Boxes Etc. Postal Services $55,000-$75,000 2,953
Duds ’N Suds Laundry and snack bar $60,000 80
Radio Shack Electronic accessories $67,500 1,934
Barbizon School of Modeling $69,500-$124,000 65
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Depth and Breadth of Product Line
• Depth of product line means that the store carries a large
assortment of each item, such as shoe stores that offer
running shoes, dress shoes, and children’s shoes.
• Breadth of product line refers to the variety of different items
a store carries.
-- scrambled merchandising refers to retailers that offer
several unrelated product lines in a single store.
-- hypermarkets are very large retail outlets that have the
goal of offering customers everything at one outlet.
-- Supercenters are retailers that combine a typical
merchandise store with a grocery store.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Breadth vs. Depth of Merchandise Lines
Nike running shoes
Florsheim dress
shoes
Top Sider boat
shoes
Adidas tennis shoes
Amana
refrigerator
Sony TV sets
JVC videocassette
recorders
General Electric
dishwashers
Sharp microwave
ovens
Classical
Rock
Jazz
Country Western
Suits
Ties
Jackets
Overcoats
Socks
Shirts
Depth:
Number of
items within
each product
line
Breadth: Number of different product lines
Shoes Appliances CDs Men’s Clothing
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Differences in Store Concepts
DISCOUNT STORE SUPERCENTER HYPERMARKET
Average size
(in square feet)
Number of employees
Annual Sales
($ millions per store)
Gross margin
Number of items stocked
70,000
200-300
$10-$20
18%-19%
60,000-80,000
150,000
300-350
$20-$50
15%-16%
100,000
230,000
400-600
$75-$100
7%-8%
60,000-70,000
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Forms of Non-store Retailing
Automatic
vending
Direct mail
and
catalogs
Television
home
shopping
On-line
retailing
Tele-
marketing
Direct
selling
High
Low
Acti
ve c
ust
om
er
invo
lvem
en
t
Active retailer involvement Low High
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Automatic Vending
• Non-store retailing that makes it possible
to serve customers where stores cannot.
• Maintenance and operating costs are high.
• Small convenience products are available
in vending machines.
• Of the 3 million vending machines now in
use, 1.8 million are soft drink machines.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Direct Mail & Catalogs
• Marketing efficiency is improved through
segmentation and targeting.
• Customer value is enhance by providing a
fast and convenient means of making a
purchase.
• In 1998 Americans increased their catalog
spending to $87 billion.
• A typical household receives 50 catalogs each
year.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Television Home Shopping
• TV home shopping is possible when consumers
watch a shopping channel on which products are
displayed; orders are placed over the telephone.
• Two popular home shopping programs reach 60
million homes and have combined sales of $2 billion.
• TV home shopping programs traditionally attract
40-50 year old females.
• Limitations of TV shopping have been the lack of
buyer-seller interaction and the inability of
consumers to control the items they see.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Online Retailing
• Online retailing allows consumers to search for,
evaluate, and order products through the Internet.
• The advantages of online retailing are:
– ability to comparison shop
– privacy
– variety
• Forecasts suggest that current annual sales of $10
billion could reach $100 billion in just a few years.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Telemarketing
• Telemarketing involves using the telephone to
interact with and sell directly to consumers.
• According to the American Telemarketing
Association, telemarketing sales exceed $500 billion.
• As the use of telemarketing grows, consumer
privacy has become a topic of discussion among
consumers, Congress, the Federal Trade
Commission, and businesses.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Direct Selling • Direct selling involves direct sales of goods and
services to consumers through personal interactions
and demonstrations in their home or office.
• Industry sales are more than $16 billion, but are
declining in the U.S. as retail chains begin to carry
similar products at discount prices, and the
increasing number of dual-career households
reduces the number of potential buyers at home.
• Many direct selling retailers are expanding into
international markets to offset the decline in
domestic sales.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Retail Positioning Matrix
• The retail positioning matrix positions retail
outlets on two dimensions: breadth of product
line and value added.
• Breadth of product line is the range of
products sold through each outlet.
• Value added includes such elements as
location, product reliability, and/or prestige.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Retail Positioning Matrix
Kmart
Just for Feet Tiffany
Bloomingdale’s
Broad
Narrow
Value added Low High
Breadth of
product line
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Key to Retail Positioning
For a store to be successfully
positioned, it must have an
identity which has some
advantages over competitors,
and at the same time are
recognized and valued by
consumers.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
The Retailing Mix
The retailing mix includes:
1. Goods and services
2. Physical distribution
3. Communications tactics
chosen by a store.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
The Retailing Mix
Consumers
Store location
Distribution centers
Warehousing
Transportation
Handling goods
Packing
Variety and
assortment
Sales assistance
Customer services
Pricing
Credit
Guarantees and
exchanges
Alterations and
adjustments
Store image and
atmosphere
Parking
Delivery
Personal selling
Advertising
Window displays
Internal displays
Public relations
S tore layout
Catalogs
Telephone sales
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Types of Retailers Keys to Success
High Value-added/
Broad Line
(Bloomingdales)
Creative merchandising image--
excitement, leader
High price/high margin
Store Ambiance
Low Value-added/
broad line (Kmart)
Economies of scale--volume
Image--”good guys”, conveniences
Low price/low margin
Low or self-service
Efficiency of operations
High Value-added/
narrow line (Tiffany)
Unique of high quality products
Image--exclusive specialty
High price/high margin
Personal service/advice
Expensive presentation
Low Value-added
narrow line
(Just for Feet)
Specialty mass merchandising
Image--value conscious, consistent
Low price, loss leaders
Little or self-service
“Cookie-cutter” stores
Implications of the Retail Positioning Mix
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Retail Pricing Terminology
• Markup refers to how much should be added to the
cost the retailer paid for the product to reach a final
selling price.
• Original markup is the difference between the
retailer’s original cost and initial selling price.
• The maintained markup is the difference between the
final selling price and retailer cost and is also the
gross margin.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Retail Pricing Terminology • Markdown occurs when the product does not sell at
the original price and an adjustment is necessary.
• Shrinkage is theft of merchandise by customers and
employees.
• Off-price retailing involves selling brand name
merchandise at lower than regular prices. The
difference between the off-price retailer and a
discount store is that off-price merchandise is bought
by the retailer from manufacturers excess inventory
at prices below wholesale prices.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Store Location
• Central business district
• regional shopping centers
• community shopping centers
• strip location
• power center
Types of Store Locations
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Passage
of time As time passes,
outlet adds services
As more time passes, outlet
adds still more services
4. New form of outlet
enters retailing
environment with
characteristics of
outlet in Box 1
1. Outlet starts with:
Low prices
Low margins
Low status
3. Outlet now has:
Still higher prices
Still higher margins
Still higher status
2. Outlet now has:
Higher prices
Higher margins
Higher status
The Wheel of Retailing
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
The Retail Life Cycle M
ark
et
share o
r p
rofi
t
Early growth
Accelerated development
Maturity Decline
Valu
e-re
tail
sto
res
On
-lin
e re
tail
ers
Sin
gle
-pri
ce s
tore
s
Ware
ho
use
clu
bs
Fast
fo
od
ou
tlet
s
Co
nven
ien
ce s
tore
s
Su
per
mark
ets
Dep
art
men
t st
ore
s
Cata
log R
etail
ers
Mall
s (?
)
Gen
eral
sto
re
Fact
ory
ou
tlet
sto
res
Profit
Market share
Sin
gle
-bra
nd
sto
res
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Future Changes in Retailing
Impact of Technology
Changing Shopping Behavior
Importance of Brands
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Used with permission of Land’s End, Inc.
Land’s End Advertisement
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Courtesy CyberShop International, Inc.
egift Advertisement
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Courtesy ebay.com
ebay.com Web Page
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
© MCI Telecommunications Corporation, 1996.
All rights reserved. Reproduced with permission.
Network MCI Call Centers Advertisements
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000 MARKETING, 6/e MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS
Courtesy Wal-Mart Stores, Inc.
Sam’s Club Advertisement
top related