Chapter 1 - Role Of Retailing Flashcards

1
Q

The 3 Marketing functions of retailing

A

A provision of a link between customers and manufacturers

Functions performed in the marketing channel

Ability to create an image that enhances the marketing of a good or service.

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2
Q

Retailing Gaps or discrepancies between customer and manufacturer

S
T
I
Q
O
V
A

Spatial gaps

  • production and consumption take place in a different geographical location.
  • retailer overcome this by selling in consumer populated areas

Time Gaps

  • difference between production and consumption times.

Retailer make goods available when consumers want to purchase them. Eg Seasonal winter clothes

Information Gap

These gaps exist when producers need to make consumers aware of their products.

Done through advertising and sales promotion

Quantity or Assortment gap

When manufacturers narrow down product lines to achieve economies of scale. Producers provide greater variety and satisfaction for the customers.

Ownership Gaps
These discrepancies exist when consumers are unable to own products. Retailers make this possible through providing credit facilities.

Value Gaps
When consumers are in need of adjustments to a product. Services that add value to a p/s. Eg gift wrapping, deliveries and repairs. So is product customisation to better fit the consumers needs.

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3
Q

Functions performed in the marketing channel by Retailers

Marketing Functions of Retailers

A

Removing risk -
for wholesales and producers by ordering and stocking products in advance.

Offering the last opportunity for consumer interaction by providing products at convenient locations for consumers

Acting as a major source of market information - they detect changes in consumer purchasing and consumption habits and provide these to suppliers

Providing storage for products on consignment

Advertising and sales promotion

Providing access to consumers on a wide front: Retailers can be found in remote areas as well

Enhancing the product image of the wholesaler or producer by using location, architecture and decor.

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4
Q

Factors that influence a retailers image

A

Physical layout, architecture and general appearance of the shop

Price, quality and variety of products

Behaviour, appearance and knowledge of staff members

Customer mix, congestion and density of products

Parking facilities and convenience of access

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5
Q

The retailing concept

A

The retailer strives for satisfaction of consumers needs and wants while still achieving retailing objectives.

The retailing concept helps with identifying needs and wants and developing plans to satisfy their needs and wants.

This doesn’t not analyse the internal capabilities and strength of retailer but only the Identification and commitments to need and want satisfaction.

When the retailing concept is executed properly the consumers will experience “total retail experience” and the development of a long term relationship with the retailer

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6
Q

3 elements of the retailing concept

A
  1. Consumer orientation helps the retailer determine and focus on consumers needs and wants
  2. An integration and coordination of retailers plans and activities to satisfy consumer needs and wants

3 A goal orientation the aims at achieving financial and non financial goals by addressing consumer needs and wants with an integrated and coordinated approach by the retailer

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7
Q

The total retail experience

A

This consists of all the activities that either enhance or inhibit consumers during their interaction with the retailers

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8
Q

Some controllable elements of the total retailer experience

A

The number and appearance of salespeople on the shop floor

Brands offered

Layout

Display windows

Decor

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9
Q

Uncontrollable elements of the total retail experience

A

Quality of road that give access to shop

Sufficiency of on street-parking

Traffic congestion

Environmental factors

Behaviour of customers in the shop

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10
Q

Two components of consumer service

A

Services expected: Necessary like shopping baskets at a grocery store

Augmented services: services that a consumer would not consider essential like deliveries or consumer advice on nutritional value of foodstuffs

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11
Q

Relationship retailing

A

A strategy of activities that aims to attract retain and enhance the long term association between a retailer and individual consumers.

The focus here is on the creation of consumer loyalty.

The availability and low cost of computer technology has made development and maintenance of relationship retailing easier by utilising individual data on consumers to offer them useful augmented services

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12
Q

4 Theories of the emergence, growth and decline of retail institutions

A

Wheel of retailing

Dialectical process

Retail life cycle

Retail accordion

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13
Q

Wheel of retailing

A

Entry
- exploiting the weakness of other retailers by entering the market with low prices , low profit and low status.

Trading up
To differentiate retailers trade up and increase availability of additional services. Most common would be changes in demographic trends by offering higher quality products etc. Prices will rise.

Vulnerability
Retailer reaches maturity with high-cost and high profit which becomes vulnerable to other new low cost institutions.

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14
Q

The dialectical process

A

Thesis: the established retailing institution.
- speciality stores - with high prices and deep assortment

Antithesis: A new challenging institution
- discount stores - with low prices and broad variety

Synthesis: a retailing institution formed by the natural adaptations of the two initially opposing retail institutions.
- Category killer - average margin, reasonable prices, reduced services, shallow variety and extensive assortment.

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15
Q

Retail life cycle

A

Introduction phase
- Innovation of a new concept with a stark contrast to existing retailers

Fasted- tracked development phase
- early growth phase where sales, volume and profits have a rapid increase.

Maturity phase
Where cost pressure causes both sales volume and profit levels to reach their maximum levels. Market share stabilises and profit levels decline as new retailers enter at lower prices

Shrinking phase
Retailers try to curb shrinkage through repositioning the business or applying the techniques that the new retailing institutions are using

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16
Q

The retail accordion

A

This theory is based on the assumption that the merchandise mix of retailers offers an explanation for retail structure change.

Retailer begin as institutions that offer a wide variety then eventually offer a more limited range of specialised merchandise.

17
Q

7 Reasons for international retailing

A

Foreign markets may represent better growth opportunities because of population trends etc

Domestic markets may be saturated

A retailer may be able to offer p/s not available in foreign market

May be less competition in foreign market

Foreign markets may supplement domestic sales

Tax incentives may be available in foreign markets

Worldwide changes in government and economic shits make countries more to foreign retailers

18
Q

Factors to consider when engaging in international retailing

A

Institutional factors
- government restrictions and and incentives

Consumer factors
- demographics- income levels, literacy.

Store location factors

  • availability of suitable sites
  • rental/ purchase terms
  • public transportation
  • vehicle accessibility

Operation factors

  • number + experience of personnel
  • predominant management style
  • prevalence of shoplifting

Merchandise factors

  • width, depth and quality of merchandise available
  • availability and quality of suppliers

Pricing factors

  • pricing level
  • taxes and levies
  • price control
Image and promotional
Factors 
- preferred store atmosphere of locals 
- shop layout
- media availability and cost

Merchandise factors

Pricing factors

Image and promotion factors

19
Q

4 best known entry strategies

A

Franchising - most visible

Self start entry

Acquisition of existing retailers

Joint ventures

20
Q

Trends in South African Retailing

A

Convenience considerations

Expansion and growth of informal markets

Shifting of channel power

Expansion of services

Information management

Retail innovation

Revenue enhancement

Consumer and lifestyle influences

Casualisation and professionalisation of retail work force

Multichannel retailing

21
Q

Importance of retailing in the South African Economy

A

Major source of employment

  • 4th largest contributor to GDO and employed 20% of SA workforce.

+ informal retailing

22
Q

4 Characteristics of successful international retailers:

A

Globally sustainable competitive advantage

Ability to adapt to local circumstances

Global mindset

Own sufficient financial resources