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Marketing: Real People, Real Choices 3rd edition 18-1©2003 Prentice Hall, Inc
Chapter 18
Offline Retailing and B2C E-Commerce
Marketing: Real People, Real Choices 3rd edition 18-2©2003 Prentice Hall, Inc
Chapter Objectives_1
Define retailing and understand how retailing evolves
Describe how retailers are classified
Understand the importance of store image to a retail positioning strategy and explain how a retailer can create an image in the marketplace
Marketing: Real People, Real Choices 3rd edition 18-3©2003 Prentice Hall, Inc
Chapter Objectives_2
Describe direct selling and automatic vending, two forms of nonstore retailing
Describe B2C e-commerce, its benefits, limitations, and future promise
Marketing: Real People, Real Choices 3rd edition 18-4©2003 Prentice Hall, Inc
Retailing
Final stop on the distribution path
The process by which products are sold to consumers for personal use
Retailers add value with image, inventory, service quality, location, and pricing policies
Marketing: Real People, Real Choices 3rd edition 18-5©2003 Prentice Hall, Inc
The Wheel of Retailing
New types of retailers find it easiest to enter the market by offering goods at lower prices than competitors; after they gain a foothold, they gradually trade up, improving facilities and increasing the quality and assortment of merchandise, and offering special amenities; upscaling increases costs causing prices to rise; higher prices open the door for a new entrant charging lower prices
Marketing: Real People, Real Choices 3rd edition 18-6©2003 Prentice Hall, Inc
Retail Life Cycle
Retailers are also products because they provide benefits and must offer a competitive advantage to survive
– Introduction– Growth– Maturity– Decline
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Factors Affecting the Future of Retailing
Demographics
Technology
Globalization
Marketing: Real People, Real Choices 3rd edition 18-8©2003 Prentice Hall, Inc
Major Demographic Factors
Convenience for working women
Catering to specific age segments
Recognizing ethnic diversity
Marketing: Real People, Real Choices 3rd edition 18-9©2003 Prentice Hall, Inc
Classifying Retailers by What They Sell
All retailers are classified by the NAICS codes
Some lines still blurred
– scrambled merchandising - strategy of carrying a combination of food and nonfood items
Marketing: Real People, Real Choices 3rd edition 18-10©2003 Prentice Hall, Inc
Classifying Retailers by Level of Service
Self-service retailers
Full-service retailers
Limited-service retailers
Marketing: Real People, Real Choices 3rd edition 18-11©2003 Prentice Hall, Inc
Classifying Retailers by Merchandise Selection
Merchandise breadth
– Narrow versus Broad assortments
Merchandise depth
– Shallow versus Deep assortments
Marketing: Real People, Real Choices 3rd edition 18-12©2003 Prentice Hall, Inc
Store Types
Convenience stores
Supermarkets
Specialty stores
Department stores
Hypermarket stores
Discount stores
– General merchandise discount stores
– Off-price retailers– Warehouse clubs– Factory outlet store
Marketing: Real People, Real Choices 3rd edition 18-13©2003 Prentice Hall, Inc
Nonstore Retailing
Any method a firm uses to complete an exchange that does not require a customer visit to a store
– Direct selling
– Automatic vending
Marketing: Real People, Real Choices 3rd edition 18-14©2003 Prentice Hall, Inc
Direct Selling
Direct selling occurs when a salesperson presents a product to one individual or a small group, takes orders, and delivers the merchandise
– Door-to-Door Sales– Parties and Networks
• party plan systems• multilevel pyramid schemes
Marketing: Real People, Real Choices 3rd edition 18-15©2003 Prentice Hall, Inc
Automatic Vending
Appealing for selling convenience goods because of small space required, and minimal personnel to maintain and operate
– French fries
– Software
– Levi’s jeans
Marketing: Real People, Real Choices 3rd edition 18-16©2003 Prentice Hall, Inc
B2C E-Commerce
Online exchange between companies and individual consumers
Marketing: Real People, Real Choices 3rd edition 18-17©2003 Prentice Hall, Inc
E-Commerce and the Customer
Benefits
– Shop 24/7– Less travel– More choices– More information– Price competition– Fast delivery
Limitations
– Lack of security– Fraud– Can’t touch items– Hard to distinguish
color/ texture online– Expensive to return
Marketing: Real People, Real Choices 3rd edition 18-18©2003 Prentice Hall, Inc
E-Commerce and the Marketer
Benefits
– The world is your marketplace
– Decreases costs– Very specialized
businesses– Real-time pricing– Tracking of
consumer behavior
Limitations
– Lack of security– Must maintain site – Price competition– Conflicts with
conventional retailers
– Legal issues not resolved
Marketing: Real People, Real Choices 3rd edition 18-19©2003 Prentice Hall, Inc
Developing a Store Positioning Strategy
Store image
Atmospherics
Marketing: Real People, Real Choices 3rd edition 18-20©2003 Prentice Hall, Inc
Store Design: Setting the Stage
Store layout and traffic flow
Fixture type and merchandise density
The sound of music
Color and lighting
The Actors: Store Personnel
Pricing policy