CHAPTER 1: PERSPECTIVE IN RETAILING

Question 1

What is the definition of marketing?

Answer 1

Marketing is an organizational function and set of processes for creating, communicating, and delivering value to customers and managing customer relationships in ways that benefit the organization and its stakeholders.

Question 2

What is retailing?

Answer 2

Retailing consists of the final activities and steps needed to place merchandise into the hands of the consumer or to provide services to the consumer

Question 3

Why is having the lowest price not the key to retail success?

Answer 3

Cost management is key; retailers who cut costs to offer competitive prices succeed.

Question 4

List factors impacting retail strategy due to demographic shifts.

Answer 4

Fluctuating birth rates, growing Gen Y influence, Gen X entering middle age, Baby Boomers retiring, and increasing immigrant numbers.

Question 5

What is ‘scrambled merchandising’?

Answer 5

It’s when retailers handle many unrelated items to increase profits, like a petrol station offering a café or courier service.

Question 6

What is a ‘category killer’?

Answer 6

A retailer that offers a large quantity of merchandise in a specific category at competitive prices, making it hard for competitors.

Question 7

List the four popular methods to categorize retailers.

Answer 7

Number of outlets, margin vs. turnover, location, and size.

Question 8

What are the two primary methods for studying retail management?

Answer 8

Analytical (fact-finding) and creative (conceptual and imaginative) methods.

Question 9

Why is retailing undergoing so much change?

Answer 9

Due to factors like e-tailing, price competition, demographic shifts, and changes in store size.

Question 10

What is the marketing concept?

Answer 10

A philosophy where businesses exist to identify and satisfy customer needs through a customer-oriented, integrated, and long-term profit-focused approach.

Question 11

How can retail firms adapt to demographic changes?

Answer 11

By becoming more service-oriented, offering better value, focusing on promotions, and aligning closely with customer needs.

Question 12

What are the main catalysts for change in retailing today?

Answer 12

E-tailing, price competition, demographic shifts, and store size.

Question 13

Describe ‘price sensitivity’ in retail.

Answer 13

Price sensitivity is the degree to which price influences a consumer’s purchase decision, with high sensitivity meaning demand changes more with price fluctuations.

Question 14

What are the advantages of multiple retail outlets?

Answer 14

Lower fixed costs per unit, economies of scale, ability to introduce private label products, and channel captain status.

Question 15

What benefits do single retail units offer?

Answer 15

More motivated employees, responsiveness to local markets, and flexibility in merchandising.

Question 16

Why might larger retail stores have higher operational costs?

Answer 16

Due to rent, inventory carrying costs, and labor expenses associated with larger spaces.

Question 17

Define ‘experience and niche retailing’

Answer 17

A focus on unique, customized retail experiences rather than mass production, often with specialized products and a unique shopping environment.

Question 18

What role does location play in categorizing retailers?

Answer 18

Retailers are now exploring new, non-traditional locations that combine cultural and entertainment elements with shopping.

Question 19

How has technology affected the role of store size in retailing?

Answer 19

Technological advances are challenging the idea that larger stores are always more efficient by enabling smaller, highly automated retail formats.

Question 20

What is ‘channel captain status’ in retailing?

Answer 20

A status where a retailer leads in its distribution channel, often due to size, market power, or brand influence.

Question 21

What are the main external factors that impact retail firms?

Answer 21

External factors include economic conditions, consumer trends, competition, technological advances, social and cultural shifts, and legal/regulatory changes.