McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc All Rights THE VALUE OF RETAILING Retailing – All activities involved in selling, renting, and providing goods and services to ultimate consumers for personal, family, or household use – Approximately 1.5 Million in U.S Slide 17-6 THE VALUE OF RETAILING Retailing • Consumer Utilities Offered by Retailing – Allows consumers and producers to meet and creates customer value in the form of utilities provided • Consumer Utilities Offered by Retailing – – – – Time Place Possession Form Slide 17-6 FIGURE 17-1 Which retailer best provides which utilities? 17-7 FIGURE 17-2 The relative size of different types of retailers 17-8 THE VALUE OF RETAILING Retailing • The Global Economic Value of Retailing – Represented by number of people employed and total amount of money exchanged in retail sales • The Global Impact of Retailing – Wal-Mart, Home Depot, and Target – Daiei – Japan – Printemps – France – Marks & Spencer - Britain Slide 17-6 RETAILERS ARE REINVENTING THEIR STORES TO MATCH THE WAY YOU WANT TO SHOP! 17-10 CLASSIFYING RETAIL OUTLETS • Form of Ownership – who owns – Individuals, Corporate Chains, Contractual Systems • Level of Service – degree of service provided – Self-, limited-, and full-service • Merchandise Line – how many different types of products store carries and in what assortment Slide 17-13 LO2 CLASSIFYING RETAIL OUTLETS FORM OF OWNERSHIP Form of Ownership Independent Retailer Corporate Chain Contractual Systems • Wholesaler-Sponsored Voluntary Chains • Retailer-Sponsored Cooperatives 17-14 LO2 CLASSIFYING RETAIL OUTLETS FORM OF OWNERSHIP Contractual Systems, cont • Franchising Business-Format Franchises Product-Distribution Franchises 17-15 Hypermarket A hypermarket is a form of scrambled merchandising, which consists of a large store (more than 200,000 square feet) that offers consumers everything in a single outlet, eliminating the need to shop at more than one location 17-53 Intertype Competition Intertype competition consists of competition between very dissimilar types of retail outlets 17-54 Telemarketing Telemarketing consists of using the telephone to interact with and sell directly to consumers 17-55 Retail Positioning Matrix The retail positioning matrix is a matrix that positions retail outlets on two dimensions: breadth of product line and value added 17-56 Retailing Mix The retailing mix consists of the activities related to managing the store and the merchandise in the store, which includes retail pricing, store location, retail communication, and merchandise 17-57 Off-Price Retailing Off-price retailing consists of selling brand-name merchandise at lower than regular prices 17-58 Central Business District A central business district is the oldest retail setting, usually located in the community’s downtown area 17-59 Regional Shopping Centers Regional shopping centers consist of 50 to 150 stores that typically attract customers who live or work within a 5- to 10-mile range, often containing two or three anchor stores 17-60 Community Shopping Center A community shopping center consists of a retail location that typically has one primary store (usually a department store branch) and often 20 to 40 smaller outlets, serving a population of consumers who are within a 10- to 20-minute drive 17-61 Strip Location A strip location consists of a cluster of neighborhood stores to serve people who are within a 5- to 10-minute drive 17-62 Power Center A power center is a huge shopping strip with multiple anchor (or national) stores 17-63 Category Management Category management is an approach to managing the assortment of merchandise in which a manager is assigned the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other, with the objective of maximizing sales and profits in the category 17-64 Wheel of Retailing The wheel of retailing is a concept that describes how new forms of retail outlets enter the market 17-65 Retail Life Cycle The retail life cycle is the process of growth and decline that retail outlets, like products, experience It consists of the early growth, accelerated development, maturity, and decline stages 17-66 Multichannel Retailers Multichannel retailers are retailers that utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs, television, and online retailing 17-67 ... LO3 NONSTORE RETAILING Automatic Vending Direct Mail and Catalogs 17-24 NONSTORE RETAILING LO3 Television Home Shopping Online Retailing 17-25 NONSTORE RETAILING LO3 Telemarketing •... retailers 17-34 RETAILING STRATEGY LO4 RETAILING MIX Retailing Mix Retail Pricing • Original Markup • Maintained Markup • Gross Margin Markdown 17-35 RETAILING STRATEGY • Retailing Mix –... 17-41 LO4 RETAILING STRATEGY RETAILING MIX Everyday Low Pricing (EDLP) Everyday Fair Pricing Benchmark or Signpost Items 17-37 LO4 RETAILING STRATEGY RETAILING MIX Off-Price Retailing