01 nature retailing
TRANSCRIPT
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THE NATURE
OF RETAILING
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THE NATURE OF RETAILING
What is Retailing
Retail Careers and Job Skills
The Retailer in the Channel ofDistribution
The Retailer as an Image Creator
Retailers and the Marketing Concept A Retail Challenge: The Right
Merchandising Blend
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DEFINITIONS
RETAILING is the business activity of sellinggoods and services to the final consumer
RETAILER is any business which directs itsmarketing effort towards the final consumerfor the purpose of selling goods or services -
-greater than 50% of the total sales mustbe retail sales to be a retailer
-many types of retailers
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CONTRASTING RETAIL AND
WHOLESALE OPERATION
RETAILERS
Sell smaller product quantities on a morefrequent basis
Store facilities open to the general public Higher per unit price due to individual unit
sales
Almost exclusive reliance on one price policy
Ultimate consumers makes initial salescontact
Considerable emphasis placed on storeatmosphere
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CONTRASTING RETAIL AND
WHOLESALES OPERATION
WHOLESALERS
sell larger product quantities on a lessfrequent basis
over-the-counter sales seldom made togeneral public
lower per unit price due to bulk package
sales more extensive use of variable price structure
sales representatives make initial salescontract
little or no emphasis on facility atmospherics
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RETAILING IS:
educational, exciting
dynamic, demanding
small town, big city
local, regional, national, internationalthe management of change
the most imp link in the distribution channel
a major economic force
a significant area for career opportunities
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CHARACTERISTICS OF RETAIL CAREERS
Many job opportunities in smallest towns orlargest urban center
High job security, even in times of economicstagnation
Many opportunities for advancement
Many opportunities for women Salaries vary significantly; often low pay at
start
Skills gained in retailing are transferable to
other job opportunities The downsides of retail careers are: image problems
constant evaluation
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JOB SKILLS NEEDED IN RETAIL
1. Merchandising
buying
supplier management selling
relationship building
advertising & promotion
display building
2. Operations
warehousing
receiving
delivery
security
customer service store management
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JOB SKILLS NEEDED IN RETAIL
3.Sales Promotion
advertising display
publicity
sales promoactivities
4.Control
asset management credit
A/P, A/R, auditing
data processing
5.Personnel
recruiting
selecting
training compensation
union issues
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RETAIL CHALLENGE
You are given the job to head a committee toselect a new president for a retail chain.
Rank the following criteria on a scale of 1-10(where 10 is high) on the importance of
each criteria in evaluating candidates.1. hard work 6. initiative
2. analytical skills 7. leadership
3. creativity 8. organization
4. decisiveness 9. risk taking
5. flexibility 10. stress tolerance
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RETAILERS ARE AN IMPORTANT LINK
IN THE CHANNEL OF DISTRIBUTION
Retailer provide services for manufacturers
buying
selling
assortment creating stocking
delivering
credit extending informing
consulting
transferring ownership
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RETAILERS ARE AN IMPORTANT LINK
IN THE CHANNEL OF DISTRIBUTION
Retailers provide services for consumers buying
selling
bulk breaking
assortment creating
stocking
delivering
credit extending informing
consulting
transferring ownership
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RETAILER AS A
PRODUCER/CONSUMER LINK
Assortment GapQuantity gap
Space Gap
Time gap
Retailers create utility!!
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Retailers are intermediaries
who are very interested inchannel relationships.
Improved channelrelationships often involve
forming vertical marketingsystems.
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VERTICAL MARKETING SYSTEMS
Professionally managedand centrally
programmednetworks, pre-engineered toachieve operating economies and maximummarket impact
Allows the channel team to achieve
technological, managerial, and promotionalleverage
Achieved through
persuasive administrative powers
legally binding contractualagreements
partial or total ownership of channel
members
A AS A AG
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THE RETAILER AS AN IMAGE
CREATOR
Retailing is an image creating activity!! Imageis a mental picture that forms in the
human mind as a result of many differentstimuli
Retail imageis the impression, personality,or mental picture that is called to mind whena consumer is asked to describe a particular
retail organization Retail image is created by many
components!!
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THE COMPONENTS OF A RETAIL IMAGE
product factors service factors
price factors location factors
atmosphere factors layout and display factors
communication factors
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RETAIL IMAGES ARE IMPORTANT BECAUSE
1. Simplify the consumers decision making andshopping process.
2. Attract shoppers who have a self image close
to the retailers image.
3. Help segment consumer markets and
improve targeting.
4. Differentiate the retailer from competing
retailers and other businesses.
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THE PROBLEM OF RETAILING
Must balance ability of the firms merchandising programs
to meet the needs of targeted consumers
With ability of the firms administrative plans to
meet the retailers need to operate effectivelyand efficiently
*See Key Performance Measures forRetail Businesses
S
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RETAILERS IMPLEMENT THE
MARKETING CONCEPT
Retailers strive to sell customers what theywant rather than what the retailer has bought
Retailers who adopt the marketing conceptare neither exclusively customer driven orprofit driven, they seek a workable balance
between these two goals.
Relationship marketing and retention retailingare important concepts
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RETENTION RETAILING IS IMPORTANT
1. Most customers do not complain
60 90% switch stores/brands
2. Cost 5X more to attract a new customer thanit does to retain an existing one
3. Customers become more valuable over time
less wasted retail effort as retailer knowsthe customer and what s/he wants
greater price advantage as customer isless price sensitive
lower transactional cost
lower communication costs
THE RETAIL CHALLENGE IS
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THE RETAIL CHALLENGE IS
TO OFFER THE RIGHT
MERCHANDISING BLEND the right product
in the right quantities in the right place
at the right time
at the right price by the right appeal
with the right service
QUOTE FROM SAM WALTON
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QUOTE FROM SAM WALTON
FOUNDER OF WALMARTFor my whole retail career, I have stuck to
one guiding principlegive your customerswhat they want, and customers wanteverything: a wide assortment of good qualitymerchandise; the lowest possible prices;
guaranteed satisfaction with what you buy;friendly, knowledgeable service; convenienthours; free parking; a pleasant shoppingexperience.
You love it when you visit a store thatsomehow exceeds your expectations, andyou hate it when a store inconveniences you,or gives you a hard time, or just pretends
youre invisible