CH16: Managing Retailing Flashcards
retailing
all the activities in selling goods or services directly to final consumers for personal, nonbusiness use
the new factors in the modern retail marketing environment
- new retail forms and combinations
- retailer consolidation
- growth of mobile retailing
- growth of omnichannel retailing
- growth of fast retailing
- increasing role of technology
- decline of middle-market retailers
goals for product assortment and procurement
- match shopper expectations for breadth and depth
- develop a product differentiation strategy
destination category
categories that, after controlling for location, prices, and feature advertising, increase a shopper’s probability of choosing a store
the 3 levels of service in retailing
- self-service (e.g. discount stores)
- limited service (e.g. Macy’s)
- full service (e.g. Tiffany, Omega)
store atmosphere
the controllable characteristics of retail space that entice customers to enter the store, shop, and purchase
the 2 main types of retail pricing strategies
- high markup, low volume
- low markup, high volume
price image
reflects the overall perception that consumers have about the level of prices at a given retailer
everyday low pricing
EDLP; charging a constant low price with little or no price promotion or special sales; eliminates price uncertainty
high-low pricing
charging higher prices on an everyday basis, but running frequent promotions featuring temporarily lower prices (lower than EDLP level)
geofencing
targeting customers with a mobile promotion when they are within a defined geographic space, typically near or in a store
shopper marketing
the use of stocking, displays, and promotions to affect consumers actively shopping for a product (in-store marketing)
omnichannel retailing
a strategy in which retailers engage customers through multiple digital and physical touchpoints; all channels work together to make the sale
the most common brick-and-mortar stores
- department stores
- specialty stores
- supermarket
- convenience store
- drug store
- mass merchandisers
- category killers
- extreme value or hard-discount stores
- off-price retailer
- warehouse clubs
- automatic vending
supermarket
large, low-cost, low-margin, high-volume self-service store designed to meet the total needs for food and household products
category killer
narrow but deep assortment in one category
off-price retailer
leftover goods, overruns, irregular merchandise sold at less than retail (e.g. outlets)
types of locations for B&M retailers
- central business districts
- regional shopping centers
- community shopping centers
- shopping strips
- location within a larger store (e.g. Starbucks inside Target)
- stand-alone stores
advantages for online retailers
- no cost for retail floor space and staff
- facilitates sales of low-volume products to niche markets
private label
store brand; a proprietary brand that retailers and wholesalers develop; up to 40% of all sales are private label
the main advantages of private brands
- more profitable
- allow for differentiation
generics
unbranded, plainly packaged, less expensive versions of common products (e.g. ibuprofen, spaghetti, paper towels, etc.)
the 4 main strategies for dealing with private labels
- fight selectively when the mfg can add value
- partner effectively by seeking win-win relationships (e.g. retailer-specific lines)
- innovate brilliantly with new products to beat private labels
- create willing value props; symbolic brand imagery and functional quality
wholesaling
includes all the activities in selling goods or services to those who buy for resale or business use
the 3 main ways that wholesalers differ from retailers
- pay less attention to promotion, atmosphere, and location since they are dealing with business customers
- transactions are usually larger; wholesalers cover a larger trade area than retailers do
- subject to different legal regulations and taxes
merchant wholesalers
typically buy directly from the manufacturer, take title to the merchandise they handle, store the product, and then sell it to the customer; can be full service or limited service
brokers
bring buyers and sellers together and assist in negotiation; they are paid by the party hiring them
agents
represent buyers or sellers on a more permanent basis and aim to facilitate buying and selling, on commission typically based on the selling price
the 9 main functions of wholesalers
- provide access to individual retailers
- buying and assortment building
- bulk breaking
- warehousing
- transportation
- financing
- risk bearing
- market research
- management services and consulting
