Marketing 13Marketing 13RetailingRetailing

13.113.1

RETAILING -- 13RETAILING -- 13

TypesTypes ClassificationClassification Non-store retailingNon-store retailing FranchisingFranchising Retail StrategyRetail Strategy Global considerationsGlobal considerations

13.213.2

RETAILINGRETAILING DEFINITION DEFINITION (p. 436) To ultimate consumer(p. 436) To ultimate consumer

Classification based on:Classification based on: OwnershipOwnership

Independent; Chain; FranchiseIndependent; Chain; Franchise

Level of ServiceLevel of Service Full/High Full/High None None

Product AssortmentProduct Assortment Specialty vs. Full LineSpecialty vs. Full Line

PricePrice Retail Retail Discount & Off-Price Discount & Off-Price

13.313.3

Major Types of Retail Major Types of Retail OperationsOperations

Department StoresDepartment Stores

OrganizationOrganization

National ChainNational Chain Federated, Mays, NordstromFederated, Mays, Nordstrom

Declining GrowthDeclining Growth & Changing merchandise& Changing merchandise

13.413.4

Major Types of Retail Major Types of Retail OperationsOperations

Specialty storesSpecialty stores

SizeSize

ConvenienceConvenience & Selection& Selection

GrowthGrowth

13.513.5

Major Types of Retail Major Types of Retail OperationsOperations

SupermarketsSupermarkets SpendingSpending

60% of food $60% of food $ One stop shoppingOne stop shopping

Loyalty programsLoyalty programs

DiversifyDiversify Scrambled Scrambled (Wide Variety of Products)(Wide Variety of Products)

GasGas EthnicEthnic

13.613.6

Major Types of Retail Major Types of Retail OperationsOperations

DrugstoresDrugstores OTC & +OTC & + Convenience store productsConvenience store products

Convenience storesConvenience stores NeighborhoodNeighborhood Convenience itemsConvenience items

RestaurantsRestaurants ChainChain EthnicEthnic SpecialtySpecialty

13.713.7

Major Types of Retail OperationsMajor Types of Retail Operations Discount storesDiscount stores

Full line discounters Full line discounters Ltd service; assortment “hard goods” (housewares, toys, auto, hardware, Ltd service; assortment “hard goods” (housewares, toys, auto, hardware,

sports, garden, clothing, bedding…) Wal-Martsports, garden, clothing, bedding…) Wal-Mart

Super centersSuper centers Grocery + general merchandise + Services (Rx, dry cleaning, portrait, Grocery + general merchandise + Services (Rx, dry cleaning, portrait,

photo, hair, optical, restaurant…) Wal-Mart Super Centerphoto, hair, optical, restaurant…) Wal-Mart Super Center

Specialty Discount StoresSpecialty Discount Stores Nearly complete, single line (sports, electronic, auto, office suppliers).Nearly complete, single line (sports, electronic, auto, office suppliers). Category killersCategory killers

Warehouse/membership clubsWarehouse/membership clubs Costco, BJ’s, Sam’sCostco, BJ’s, Sam’s

Off price retailersOff price retailers TJ Maxx, Ross, Marshall’s, Tuesday MorningTJ Maxx, Ross, Marshall’s, Tuesday Morning

13.813.8

Non-store RetailingNon-store Retailing

Automatic VendingAutomatic Vending Soft drinks & Snack foodsSoft drinks & Snack foods = 85% of $40 Billion/yr.= 85% of $40 Billion/yr.

Direct RetailingDirect Retailing Avon, Mary Kay, CutcoAvon, Mary Kay, Cutco

Direct MarketingDirect Marketing direct mail, catalogsdirect mail, catalogs

Electronic RetailingElectronic Retailing QVC, onlineQVC, online

BA Vending Machines

13.913.9

FRANCHISINGFRANCHISING

Important part of retailingImportant part of retailing

Product and trade nameProduct and trade name

Business formatBusiness format

CostCost Risk/RewardRisk/Reward

13.1013.10

Retail Marketing StrategyRetail Marketing Strategy

Location

Targeting, &Positioning

Product

Price

IntegratedMarketingCommunication

Service, Operations &ChannelPartnerships

MarketingResearch & Analysis

EnvironmentalScanning& Analysis

Customers

Six P’s of RetailingSix P’s of Retailing

ProductProduct PlacePlace PromotionPromotion PricePrice PresentationPresentation PersonnelPersonnel

13.1113.11

RETAIL MIXRETAIL MIX Product OfferingProduct Offering

Product assortment or Merchandise MixProduct assortment or Merchandise Mix Width and depthWidth and depth

Efficient Consumer ResponseEfficient Consumer Response Need to manage inventoryNeed to manage inventory

Electronic Data InterchangeElectronic Data Interchange Cut price on slow moversCut price on slow movers

Private BrandsPrivate Brands Kenmore, Craftsman, Die HardKenmore, Craftsman, Die Hard

13.1213.12

RETAIL MIXRETAIL MIX LocationLocation

Free Standing: Destination StoresFree Standing: Destination Stores Shopping CenterShopping Center

Neighborhood: AKA Strip CentersNeighborhood: AKA Strip Centers

Community: One or two anchorsCommunity: One or two anchors

Regional Malls: ‘nuff said.Regional Malls: ‘nuff said.

Lifestyle Centers: Open air, Yuppified Lifestyle Centers: Open air, Yuppified

13.1313.13

RETAIL MIXRETAIL MIX

PricingPricing

Key in positioningKey in positioning

Everyday low pricingEveryday low pricing

13.1413.14

RETAIL MIXRETAIL MIX Presentation – AtmospherePresentation – Atmosphere

EmployeesEmployees

MerchandiseMerchandise

FixturesFixtures

Sound Sound

OdorsOdors

VisualsVisuals

New Developments in RetailingNew Developments in Retailing

InteractivityInteractivity Increase customer involvementIncrease customer involvement EntertainmentEntertainment GuestsGuests Fishing at LL Bean, climbing at REIFishing at LL Bean, climbing at REI

M-commerceM-commerce Cell phones, PDA Cell phones, PDA Buy a Coke by phoneBuy a Coke by phone

13.1513.15

EXERCISEEXERCISE

Select a discount retailer and a specialty Select a discount retailer and a specialty retailer. For each describe their retail mix. retailer. For each describe their retail mix. Refer to the previous five slides.Refer to the previous five slides.