RETAILING

CHAPTER 8
CLASSIFYING RETAILERS

Explain the dimensions by

which retailers can
be classified
CLASSIFICATION OF RETAIL
OPERATIONS

Ownership
Ownership

Level
Level of
of Service
Service

Product
Product Assortment
Assortment

Price
Price
CLASSIFICATION OF OWNERSHIP

Owned
Owned byby aa single
single person
person oror
Independent
Independent
Retailers partnership
partnership andand not
not part
part of
of aa
Retailers larger
larger retail
retail institution
institution

Owned
Owned and
and operated
operated as as aa
Chain
Chain Stores
Stores group
group by
by aa single
single
organization
organization

The
The right
right to
to operate
operate aa
Franchises
Franchises business
business or
or sell
sell aa product
product
 LEVEL OF SERVICE

Self Service Full Service

Factory outlets Discount stores Exclusive stores

Warehouse clubs
 TYPES OF STORES AND THEIR
CHARACTERISTICS

Type of Retailer Service Assort- Gross

Price
Level ment Margin
Department Store Mod Hi-High Broad Mod-High Mod High
Specialty Store High Narrow Mod-High High
Supermarket Low Broad Moderate Low
Convenience Store Low Med-Narrow
Mod High Mod High
Drugstore Low-Mod Medium Moderate Low
Full-line Discounter Mod-Low Med-Broad Mod Low Mod Low
Specialty Discounter Mod-Low Med-BroadMod Lo-low Mod Low
Warehouse Clubs Low Broad Low-very lowLow
Off-price Retailer Low Med-NarrowLow Low
Restaurant Low-High Narrow Low-High Low-High
 PRICE

Gross The amount of money

Margin the retailer makes as a
percentage of sales
after the cost of goods
sold is subtracted.
MAJOR TYPES OF RETAIL
OPERATIONS

Describe the major types

of retail operations
MAJOR TYPES OF RETAIL
OPERATIONS

Department
Department Stores
Stores

Specialty
Specialty Stores
Stores

Supermarkets
Supermarkets

Drugstores
Drugstores

Convenience
Convenience Stores
Stores

Discount
Discount Stores
Stores

Restaurants
Restaurants
 CATEGORIES OF
DISCOUNT STORES

Full-Line
Discounters

Specialty Discount
Stores

Warehouse
Clubs

Off-Price
Discount Retailers
 DISCOUNT STORES

Mass
Retailing strategy
Merchandising using moderate to
low prices on large
quantities of
merchandise and
lower service to
stimulate high
turnover of products.
 DISCOUNT STORES

Retail store combining

groceries and general
Supercenter
merchandise goods
with a wide range of services.

Smaller stores emphasizing

Extreme-value
daily necessities at
Retailing
rock-bottom prices.
SPECIALTY DISCOUNT STORES

Category
Killers Specialty discount
stores that heavily
dominate their
narrow merchandise
segment.
 REVIEW LEARNING OUTCOME
TYPES OF RETAIL OPERATIONS

Departm
Departm Convenie
Convenie
Specialty
Specialty Superma
Superma Drugstor
Drugstor Discount
Discount Restaura
Restaura
ent
ent nce
nce
Stores
Stores rket
rket es
es Stores
Stores nts
nts
Stores
Stores Stores
Stores

supercente
Full-line r
extreme
-
Scrambled
Scrambled value
Merchandising
Merchandising category
Specialty
killer

Warehouse

Off-price factory
outlet
NON-STORE RETAILING

Discuss non-store
retailing techniques
NON-STORE RETAILING

Automatic
Automatic Vending
Vending

Direct
Direct Retailing
Retailing

Direct
Direct Marketing
Marketing

Electronic
Electronic Retailing
Retailing
DIRECT RETAILING

Door-to-Door
Door-to-Door

Office-to-Office
Office-to-Office

Home
Home Sales
Sales
Parties
Parties
 TYPES OF DIRECT MARKETING

Direct
Direct Mail
Mail

Catalogs
Catalogs &
& Mail
Mail Order
Order

Telemarketing
Telemarketing

Electronic
Electronic Retailing
Retailing Shop-at-home networks
On-line retailing
REVIEW LEARNING OUTCOME
NON-STORE RETAILING TECHNIQUES

Nonstore
Nonstore Retailing
Retailing

Vending

Direct
retailing
direct mail
Direct catalogs
marketing telemarketin
g
online
Electronic
shop at home
retailing
FRANCHISING

Define franchising and

describe its
two basic forms
BASIC FORMS OF
FRANCHISING

Product
Product and
and Trade
Trade Name
Name
Franchising
Franchising

Business
Business Format
Format
Franchising
Franchising
 FRANCHISING

Product and Dealer agrees to sell

Trade Name in products provided by a
Franchising manufacturer or wholesaler.

Business An ongoing business

Format relationship between a
Franchising franchiser and a franchisee.
LARGEST U.S. FRANCHISORS

McDonald’s
Southland
Subway
Burger King
KFC
Pizza Hut
RadioShack
Taco Bell
Dairy Queen
Hooter’s
Jason’s Deli
Marble Slab
Quiznos Sub

SOURCE: http://www.franchise.org, January 2006.

RETAIL MARKETING STRATEGY

List the major tasks involved

in developing
a retail marketing strategy
RETAIL MARKETING STRATEGY

Define & Select

a Target Market

Develop the
“Six Ps”
 DEFINING A TARGET
MARKET

Demographics
Demographics

STEP
STEP 1:
1:
Segment Geographics
Geographics
Segment the
the Market
Market

Psychographics
Psychographics
 CHOOSING THE RETAILING
MIX

Product
Product Place
Place

STEP
STEP 2:
2:
Choose
Choose the
the Price
Price Personnel
Personnel
Retailing
Retailing Mix
Mix

Promotion
Promotion Presentation
Presentation

http://www.publix.com
Online
 THE RETAILING MIX

Product
Product

Personnel
Personnel Place
Place

Target
Market

Presentation
Presentation Promotion
Promotion

Price
Price
CHOOSING THE RETAILING MIX

Product The mix of products

Offering
offered to the consumer
by the retailer; also called
the product assortment or
merchandise mix.
 RETAIL PROMOTION STRATEGY

Advertising
Advertising

Public
Public Relations
Relations

Publicity
Publicity

Sales
Sales Promotion
Promotion
 THE PROPER LOCATION

Choosing a Community Choosing a Site

Economic
Economic growth
growth potential
potential Freestanding
Freestanding Store
Store

Competition
Competition Shopping
Shopping Center
Center

Geography
Geography Mall
Mall
 IMPORTANT FACTORS FOR SITE
CHOICE
 Neighborhood
socioeconomics
 Traffic flows
 Land costs
 Zoning regulations
 Public transportation
 Site’s visibility, parking,
entrances and exits,
accessibility, and safety
 Fit with other stores
SHOPPING CENTER AND MALL
LOCATIONS

Advantages Disadvantages

 Expensive rent
 Design attracts
shoppers
 Failure of common
promotion efforts
 Ample parking
 Lease restrictions
 Unified image
 Hours of operation
 Sharing of common
area expenses
 Direct competitors
 Consumer time
limits
 RETAIL PRICES

Low Price High Price

Good Value Quality

Single Price Point Image
EDLP
PRESENTATION OF THE RETAIL
STORE

Atmosphere
The overall impression
conveyed by a store’s
physical layout, décor,
and surroundings
PRESENTATION OF THE RETAIL STORE

Employee
Employee type
type and
and density
density

Merchandise
Merchandise type
type and
and density
density

Fixture
Fixture type
type and
and density
density

Sound
Sound

Odors
Odors

Visual
Visual factors
factors
PERSONNEL AND CUSTOMER
SERVICE

Trading
Trading Up
Up
Two Common
Selling
Techniques
Suggestion
Suggestion Selling
Selling
CUSTOMER SERVICE FOR ON-
LINE RETAILERS

Easy-to-use
Easy-to-use Web
Web site
site

Product
Product availability
availability

Simple
Simple returns
returns
REVIEW LEARNING OUTCOME
DEVELOPING A RETAIL MARKETING
STRATEGY
NEW DEVELOPMENTS IN
RETAILING

Describe new developments

in retailing
 NEW DEVELOPMENTS IN
RETAILING

Consumers are
Interactivity involved in the retail
experience.

Purchasing goods
M-commerce through mobile
devices.
TRENDS IN RETAILING

Describe trends
in retailing
TRENDS IN RETAILING

Entertainment
Entertainment

Convenience
Convenience and
and Efficiency
Efficiency

Customer
Customer Management
Management
THANK
YOU…