Exam 3 - Chapter 16 Flashcards
Retailing
all transactions in which the buyer intends to consumer the product through personal, family, or household use (ex: stores/services, direct selling, direct marketing, and vending machines)
Retalier
an organization that purchases products for the purpose of reselling them to ultimate consumers; major role in creating time, place, form, and possession utility
Important Characteristics Re: Retailers
add value for customers by providing services/assisting in selection; brick-and-mortar stores being challenged by direct marketing channels; global opportunities; driven by holidays
2 Types of Retail Stores
general-merchandise retailers and specialty stores
Specialty Stores
emphasize narrow and deep assortments of items
Major Types of Retailers
general-merchandise retailers, department stores (Macy’s), discount stores (Walmart/Target), convenience stores (7-11/PDQ), supermarkets (Pick n’ Save), superstores (Walmart Superstores), hypermarkets (300,000+ sq ft – none in US), warehouse clubs (Sams Club), and warehouse showrooms (IKEA)
Specialty Retailers
narrow and deep assortments; do not typically sell specialty items but instead offer substantial assortments in a few product lines (ex: FootLocker or Barnes and Noble)
General-Merchanidse Retailers
retail establishments that offer a variety of product lines stocked in considerable depth
Traditional Specialty Retailers
stores that carry a narrow product mix w/ deep product lines; limited-line retailers/single-line retailers; usually offer better selections and more sales expertise than department stores (ex: apparel, jewelry, sporting goods, fabrics, etc.)
Category Killer
very large specialty store that concentrates on a major product category and competes on the basis of low prices and product availability (ex: Home Depot or Staples or Petco)
Off Price Retailer
buy manufacturers’ seconds, overruns, returns and off-season merchandise for resale to consumers at deep discounts; few services/high inventory turnover
Location Location Location!
a common saying because of critical importance; least flexible; various factors include location of target market, kind of products being sold, availability of public transportation/parking, customer characteristics, competitors’ locations, and compatibility with nearby retailers
Neighborhood Shopping Centers
usually consist of several small convenience and specialty stores; target market close by; essential products, depth of lines is limited
Community Shopping Center
one or two department stores, some specialty stores and convenience stores; wide product mixes and deep product lines
Regional Shopping Center
shopping centers with the largest department stores, widest product mixes, and deepest product lines of all shopping centers (ex: Fox River Mall)
Superregional Shopping Center
widest and deepest product mixes that attract customers from many miles away (ex: mall of America)
Lifestyle Shopping Center
typically open air and features upscale specialty, dining, and entertainment stores (ex: shops in the Villages)
Power Shopping Center
combines off-price stores with category killers; bypasses the traditional department store anchor and uses stores such as Gap, Toys “r” Us, Home Depot, etc.
Retail Positioning
Identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment
Atmospherics
the physical elements in a store’s design that appeal to consumers’ emotions and encourage buying (ex: Barnes and Noble plays certain music and has a coffee shop onsite)
Category Management
retail strategy of managing groups of similar, often substitutable products produced by different manufacturers (ex: putting all of the same products together, like salad dressing!)
Direct Marketing
the use of the telephone, internet, and nonpersonal media to introduce products to customers, who can then purchase them vial mail, phone, or internet (nonstore retailing)
Nonstore Retailing
the selling of products outside the confines of a retail facility
Catalog Marketing
an organization provides a catalog from which customers make selections and place orders by mail, phone, or the Internet
Direct-Response Marketing
a retailer advertises a product and makes it available through mail or phone orders
Telemarketing
the performance of marketing-related activities by phone (made rare by no-call list, but still used by businesses)
Television Home Shopping
home shopping network/QVC
Online Retailing
makes products available to buyers through computer connections
Direct Selling
the marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace (ex: Avon/Mary Kay) most expensive form of retailing (person to person)
Automatic Vending
use of machines to dispense products; about 2% of all retail sales
Franchising
an arrangement in which a supplier (franchiser) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration; low failure rate
Advantages for the Franchisee
start a business with limited capita; gets help from franchiser; low failure rate
Advantages for the Franchiser
gains product distribution w/o high cost of operating on its own; franchisee highly motivated; higher income
Disadvantages for the Franchisee
franchiser dictates many aspects/collects percentage; hard work; agreements are not always uniform
Disadvantages for the Franchiser
gives up some control; individual establishments may not be operated exactly to the franchiser’s standards
Wholesaling
transactions in which products are bought for resale, for making other products, or for general business operations
Wholesaler
an individual or organization that sells products that are bought for resale, for making other products, or for general business operations (takes possession of inventory)
Three Types of Wholesaling Establishments
merchant wholesalers, agents/brokers, and manufacturers’ sales branches and offices
Market Wholesalers
independently owned businesses that take title to goods, assume ownership risks, and buy and resell products to other wholesalers, business customers or retailers
Full-Service Wholesalers
merchant wholesalers that perform the widest range of wholesaling functions (ex: handle products/perform a wide range of functions)
General Merchandise Wholesalers
full-service wholesalers with a wide product mix but limited depth within the product lines
Limited Line Wholesalers
a full service wholesaler that carries only a few product lines but many products within those lines
Specialty Line Wholesalers
full-service wholesalers that carry only a single product line or a few items within a product line
Limited-Service Wholesalers
merchant wholesalers that provide some services and specialize in a few functions
Cash-and-Carry Wholesalers
limited service wholesalers whose customers pay cash and furnish transportation (Pay Day loans of Wholesalers)
Truck Wholesalers
limited-service wholesalers that transport products directly to customers for inspection and selection-Bread Truck/Truck Jobbers
Drop Shippers
limited-service wholesalers that take title to goods and negotiate sales but never actually take possession of products-drop ship from manufacturer
Mail-Order Wholesalers
limited-service wholesalers that sell products through catalogs-School Specialty
Agents
intermediaries that represent either buyers or sellers on a permanent basis (negotiate purchases/expedite sales for commission, know markets well/create relationships)
Brokers
intermediaries that bring buyers and sellers together temporarily (negotiate purchases/expedite sales for commission, know markets well/create relationships)
Sales Branches
are manufacturer-owned intermediaries that sell products and provide support services to the manufacturer’s sales force
Sales Offices
manufacturer-owned operations providing services normally associated with agents
