Chapter 13 Retailing

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Chapter 13Retailing
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Introduction

• An intermediary involved in selling goods and
  services to ultimate consumers

Retailer
Wholesaler

• An intermediary that takes title to the goods it
  handles and redistributes them to retailers,
  other distributors, and sometimes end consumers

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STRATEGIC IMPLICATIONS RETAIL MARKETING STRATEGY

• A retailer develops a marketing strategy based on
  the firms goals and strategic plans
• Two fundamental steps
• Picking a target market size and profit
  potential. POSITION.
• Developing a retailing mix to satisfy the chosen
  target market
• 4Ps Personnel Presentation used to create a
  retail image

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The Retailing Mix
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Choosing the Merchandising Mix
The mix of products offered to the consumer by
the retailer also called the product assortment
or merchandise mix.
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Merchandising (Product) Strategy

• Category management Retailing strategy which
  views each product category as an individual
  profit center.
• Slotting Allowances lump-sum payments by
  manufacturers for stocking new products.
• Scrambled Merchandising Combining dissimilar
  product lines to boost sales volume.
• Growth of Store brands Battle for shelf space

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Presentation of the Retail Store - Atmosphere
The overall impression conveyed by a stores
physical layout, décor, and surroundings. Five
Senses.
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Personnel and Customer Service
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Retail Prices
High Price
Low Price
Quality Image
Good ValueSingle Price PointEDLP
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Price
The amount of money the retailer makes as a
percentage of sales after the cost of goods sold
is subtracted.
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High Margins Low Margins
HIGH
INVENTORY TURNOVER
LOW
Profitability of a Retailer
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Major Types of Retail Operations
Department Stores
Specialty Stores
Discount Stores
Convenience Stores
Supermarkets
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Classification of Retail Operations
Level of Service
Product Assortment
Price
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Department Stores (1)
Assort- ment
Price
GrossMargin
Service Level
Broad
High
High
High
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Specialty Stores (2)
Specialty Stores
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Specialty Discount Stores (3) OR Category Killers
Specialty Discount Stores
Deep Assortment
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Discount Stores (4)
Broad Assortment
Low price
Low margin
Discount
Low Service
Shallow Assortment
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Off-Price Retailer (5)
Low margins
Narrow Line Prices
Low prices
Off-price Retailer
Low service
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Supermarket (6)
Low margins
Broad
Moderate prices
Supermarket
Low service
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Comparison between Discount, Specialty and
Specialty Discount
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Comparison between Discount, Specialty and
Specialty Discount
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Wheel of Retailing

• Newer, low-price types of retailing arise to
  challenge older established bigger retailers.

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Wheel of Retailing
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a theory to explain the institutional changes