MKTG12_LambHairMcDaniel_Ch14_updated_SH.pptx

abc

1. Q-1 Explain the importance of the retailer within the channel Q-2 List and understand the different types of retailers Q-3 Explain why non-store retailing is on the rise, and list the advantages of its different forms Q- 4 Discuss the different retail operations models, and understand why they vary in strategy and format

2. Q-5 Explain how retail marketing strategies are developed and executed Q-6 Discuss how services retailing differs from goods retailing Q- 7 Understand how retailers address product/service failures, and discuss the opportunities that service failures provide Q- 8 Summarize current trends related to customer data, analytics, and technology

3. The Importance of Retailing Retailing: a ll activities directly related to the sale of goods and services to the ultimate consumer for personal, non business use Retailer: a c hannel intermediary that sells mainly to consumers Retail industry in India Comprises mostly small businesses Dominated by a small number of large companies

4. Types of Retailers and Retail Operations Retail establishments can be classified based on: Type of ownership Level of service Product assortment Price

5. Ownership Arrangement Independent retailer: a retailer owned by a single person or partnership and not operated as part of a larger retail institution Chain store: a store that is part of a group of the same stores owned and operated by a single organization Franchise: a relationship in which business rights to operate and sell a product are granted by the franchisor to the franchisee Franchisor: The originator of a trade name, product, methods of operation, and the like that grants operating rights to another party to sell its product Franchisee: an individual or business that is granted the right to sell another party’s product

6. Level of Service Level of service Ranges from full-service to self-service Provides alterations, credit, delivery, consulting, liberal return policies, lay-away, gift-wrapping, and personal shopping

7. Product Assortment Product assortment is based on the width and depth of product lines Width is the assortment of products offered Depth is the number of different brands offered within each assortment

8. Price Gross margin: the amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted Prices in any store format might not vary just from day to day, but minute to minute The rise of mobile devices has added a new layer of complexity to pricing decisions

9. Types of In-Store Retailers Department store: a store housing several departments under one roof Specialty store: a retail store specializing in a given type of merchandise Supermarket: a large, departmentalized, self-service retailer that specializes in food and some nonfood items Drugstore: a retail store that stocks pharmacy-related products and services as its main draw Convenience store: a miniature supermarket, carrying only a limited line of high-turnover convenience goods

10. Types of In-Store Retailers Discount store: a retailer that competes on the basis of low pr ices, high turnover, and high volume Full-line discount store: a discount store that carries a vast depth and breadth of product within a single product category Supercenter: a large retailer that stocks and sells a wide variety of merchandise including groceries, clothing, household goods, and other general merchandise Specialty discount store: a retail store that of fers a nearly complete selection of single-line merchandise and uses self-service, discount prices, high volume, and high turnover

11. Types of In-Store Retailers Category killer: a large discount store that specializes in a single-line of merchandise and becomes the dominant retailer in its category Warehouse club: a large, no frills retailer that sells bulk quantities of merchandise to customers at volume discount prices in exchange for a periodic membership fee Off-price retailer: a retailer that sells at prices 25 percent or more below traditional department store prices because it pays cash for its stock and usually doesn’t ask for return privileges

12. Types of In-Store Retailers (slide 4 of 4) Factory outlet: an off-price retailer that is owned and operated by a manufacturer Used goods retailer: a retailer whereby items purchased from one of the other types of retailers are resold to different customers Restaurant: a retailer that provides both tangible products—food and drink—and valuable services—food preparation and presentation

13. Exhibit 14.1: Types of Stores and Their Characteristics Type of Retailer Level of Service Product Assortment Price Gross Margin Department Store Moderately high to high Broad Moderate to high Moderately high Specialty store High Narrow Moderate to high High Supermarket Low Broad Moderate Low Drugstore Low to moderate Medium Moderate Low Convenience store Low Medium to narrow Moderately high Moderately high Full-line discount store Moderate to low Medium to broad Moderately low Moderately low Specialty discount store Moderate to low Medium to broad Moderately low to low Moderately low Warehouse club Low Broad Low to very low Low Off-price retailer Low Medium to narrow Low Low Restaurant Low to high Narrow Low to high Low to high

14. Discussion Point Types of In-store Retailers Consider the following stores: Target Costco Home Depot Hallmark Identify the type of each retailer.

15. The Rise Of Non-store Retailing Non-store retailing: shopping without visiting a store Automatic vending: the use of machines to offer goods for sale Self-service technologies (SST): technological interfaces that allow customers to provide themselves with products and/or services without the intervention of a service employee Direct retailing: the selling of products by representatives who work door-to-door, office-to-office, or at home sales parties

16. The Rise Of Non-store Retailing Direct marketing (DM): techniques used to get consumers to make a purchase from their home, office, or other nonretail setting Telemarketing: the use of the telephone to sell directly to consumers Direct mail: the delivery of advertising or marketing material to recipients of postal or electronic mail Microtargeting: the use of direct marketing techniques that employ highly detailed data analytics in order to isolate potential customers with great precision

17. The Rise Of Non-store Retailing (slide 3 of 3) Shop-at-home television network: a specialized form of direct response marketing whereby television shows display merchandise, with the retail price to home viewers Online retailing (e-tailing): a type of shopping available to consumers with personal computers and access to the Internet Sharing economy: the way connected consumers exchange goods and service with each other through a digital marketplace

18. Retail Operations Models The retail formats covered so far are co-aligned with unique operating models that guide the decisions made by their managers Floor stock: inventory displayed for sale to customers Back stock: i nventory held in reserve for potential future sale in a retailer’s storeroom or stockroom Trade-offs inherent to restrictive operating models have led to the emergence of hybrid retail operating models and online-only retailers

19. Executing a Retail Marketing Strategy Retail managers develop marketing strategies based on the goals established by stakeholders and the overall strategic plans developed by company leadership Strategic tasks that precede tactical decisions Defining a target market Choosing the retailing mix

20. Defining a Target Market Process begins with market segmentation Retailers need to be sensitive to changes in customer preferences Target markets are defined by demographics, geographic boundaries, and psychographics

21. Choosing the Retailing Mix Entails combining the elements of the retailing mix to come up with a single retailing method to attract the target market Retailing mix: a combination of the six Ps—product, promotion, place, price, presentation, and personnel Managers must make sure that the positioning is aligned with target customers’ expectations

22. Exhibit 14.2: The Retailing Mix

23. Product The first element in the retailing mix is the product offering, also called the product assortment or merchandise mix Many online retailers purposely focus on single product line niches that could never attract enough foot traffic to support a traditional brick-and-mortar store

24. Promotion Promotion Strategy includes Advertising Public relations and publicity Sales promotion Risk Brand cannibalization: the reduction of sales for one brand as the result of the introduction of a new product or promotion of a current product by another brand

25. Place Factors to be considered while choosing a location Economic growth potential Amount of competition Geography Destination store: a store that consumers purposely plan to visit prior to shopping

26. Price Ultimate goal is to sell products to consumers, and the right price is critical to sales Based on the cost of merchandise, so an essential part of pricing is efficient and timely buying “Value-based pricing”: focuses on the value of the product to the customer Price is a key element in a retail store’s positioning strategy

27. Presentation Atmosphere: the overall impression conveyed by a store’s physical layout, décor, and surroundings Employee type and density Merchandise type and density Fixture type and density Sound Odors V isual factors Layout: the internal design and configuration of a store’s fixtures and products

28. Personnel Salespeople are trained in the following selling techniques: Trading up : persuading customers to buy a higher-priced item than they originally intended to buy Suggestion selling : s eeking to broaden customers’ original purchases with related items Sales personnel provide their customers with the amount of service prescribed by the retail strategy of the store

29. Discussion Point Retailing Mix What are some stores that students frequent? Discuss the six Ps of the retailing mix for those stores

30. Retailing Decisions for Services Service industries are customer oriented, and service quality is a priority Service distribution focuses on: Minimizing wait times Managing service capacity Improving service delivery Establishing channel-wide network coherence

31. Addressing Retail Product/Service Failures All retailers inevitably disappoint a subset of their customers The b est retailers have plans in place to recover and benefit from lapses in service Actions that might be taken include: Notifying customers in advance of stockouts Implementing liberal return policies Issuing product recalls in conjunction with promotional offers

32. Retailer and Retail Customer Trends and Advancements Big data analytics: the process of discovering patterns in large data sets for the purposes of extracting knowledge and understanding human behavior Beacons: a device that sends out connecting signals to customers’ smartphones and tablets in order to bring them into a retail store or improve their shopping experience RFID (Radio Frequency Identification) Facial recognition and biometric sensors

33. Shopper Marketing and Analytics Shopper marketing: understanding how one’s target consumers behave as shoppers, in different channels and formats, and leveraging this intelligence to generate sales or other positive outcomes Shopper analytics: searching for and discovering meaningful patterns in shopper data for the purpose of fine-tuning, developing, or changing market offerings

34. Future Developments in Retail Management Retail channel omnification: the reduction of multiple retail channel systems into a single, unified system for the purpose of creating efficiencies or saving costs Click-and-collect: the practice of buying something online and then traveling to a physical store location to take delivery of the merchandise Robots are replacing or augmenting retail employees

35. Key Terms (slide 1 of 4) Retailing Retailer Independent retailer Chain store Franchise Franchisor Franchisee Gross margin Department store Specialty store Supermarket Drugstore

36. Key Terms (slide 2 of 4) Convenient store Discount store Full-line discount store Supercenter Specialty discount store Category killer Warehouse club Off-price retailer Factory outlet Used goods retailer Restaurant Nonstore retailing

37. Key Terms (slide 3 of 4) Automatic vending Self-service technologies (SST) Direct retailing Direct marketing (DM) Telemarketing Direct mail Microtargeting Shop-at-home television network Online retailing (e-tailing) Floor stock Back stock Retailing mix

38. Key Terms (slide 4 of 4) Brand cannibalization Destination store Atmosphere Layout Big data analytics Beacon Shopper marketing Shopper analytics Retail channel omnification Click-and-collect