midterm Flashcards
retail
the set of business activities that adds value to products and services sold to consumers for their personal or family use
breaking bulk
- reduce production costs
- important to both manufacturers and consumers
- allows manufacturers to efficiently make and ship merchandise in larger quantities
- consumers purchase merchandise in smaller more useful quantities
holding inventory
products will be available when consumers want them
vertical integration
a firm performs more than one set of activities in the channel
backward integration
arises when a retailer performs some wholesaling and manufacturing activities
forward integration
occurs when a manufacturer undertakes retailing and wholesaling activities
corporate social responsibility (CRS)
an organization voluntarily engaging in business practices that meet or exceed the ethical and legal expectations of society, customers, employees
intratype competition
competition between the same type of retailers
scrambled merchandise
when retailers offer merchandise not typically associated with their type of store
retail strategy
identifies
1- target market
2- merch and services offered to satisfy customer needs
3- how to achieve long term advantages over its competition
NAICS
collect data on business activity in each country
variety (breadth of merchandise)
number of merchandise categories a retailer offers
assortment (depth of merchandise)
number of different items offered in a merchandise category
conventional supermarket
a large, self-service retail food store offering groceries, meat, and produce, as well as some nonfood items
limited assortment supermarkets or extreme value food retailers
only stock one or two of brands and sizes
supercenters
large stores that combine a supermarket with a full-line discount store
warehouse clubs
retailers that offer a limited and irregular assortment of food and general merchandise with little service at low prices (costco)
convenience stores
provide a limited variety and assortment of merchandise at a convenient location
department stores
retailers that carry a broad variety and deep assortment, offer customer services, and organize their stores into distinct departments for displaying merchandise (macys, nordstroms)
specialty stores
concentrate on a limited number of complementary merchandise categories and provide a high level of service
extreme value retailers (dollar stores)
small discount stores that offer a broad variety but shallow assortment of household goods, health and beauty, groceries
off price retailers
offer an inconsistent assortment of brand-name merchandise at a significant discount
internet retailing
- the fastest growing channel
- involves retailers interacting with consumers via the internet
electronic channel
accessing internet through computer
mobile retailing
accessing internet through smartphone
catalog channel
- nonstore retailing through catalog mailed to consumers
- about half consumers shop through catalogs
- starting to be thought of as a waste
- safety and convenience
- easier to browse than websites
direct selling
- like mary k
- face to face in home or work
- costly
- party plan system
- multilevel system–illegal pyramid schemes
automated retailing (vending machines)
- merchandise or services are stored in a machine and dispensed to customers when they deposit cash or credit card
- at convenient, high-traffic locations
store channel benefits
- touching and feeling products
- personal service
- risk reduction
- immediate gratification
- entertainment and social experience
- browsing
- cash payment
benefits of internet channel
- offer greater selection of products
- more info
- more personalized info on products and services
- improve shopping experience across all channels
- deeper and broader selection
buying process
1- recognize needs
2- seek info on how to satisfy need
3- then evaluate
4- postpurchase evaluation
hedonic needs
shopping for pleasure
utilitarian needs
shopping for work
conversion rate
the percentage of customers who enter a store or access a website and then buy a product from that same store or website
habitual decision making
purchase decision involving little or no conscious effort
social factors influencing the buying process
- economy
- family
- reference groups
- culture
retail strategy
1- identifying the retailers target market
2- the resources the retailer plans to use to satisfy target markets needs
3- competitive advantage
CRM
activities that focus on identifying and building loyalty with a retailer’s most valued customers
freestanding sites
retail locations for an individual, isolated store unconnected to other stores
outparcels
freestanding stores that are not connected to other stores
- located on the premises of a shopping center
- in a parking area
central business district
the traditional downtown financial and business area in a city or town
- draws many people and employees during business hours
- shopping flow on evening and weekends is slow
main street
refers to the traditional downtown shopping area in smaller towns and secondary shopping areas in large cities and their suburbs
power centers
target, costco, lowes
-collection of big box retail stores
specialty shopping
know what they want and will not accept a substitute
convenience shopping
minimizing effort to get product or service they want
- insensitive to price
- indifferent about brands
comparison shopping
- general idea about product they want
- no well developed preference
platinum segment
composed of the customer with the top percent of CLVs
- most profitable and loyal
- not overly concerned about prices
- more value on service than price
- buy a lot of merchandise
gold segment
buy a significant amount but not as loyal
iron segment
- purchase modest amount
- loyalty not substantial enough for special treatment
lead segment
demand a lot of attention but do not buy much from the retailer
knowledge gap
reflects the difference between customers expectations and retailers perception of those expectations
-can close gap by developing a better understanding of customer expectations
standards gap
difference between the retailers knowledge of customers perception and expectations and the service standards it sets
-close gap by appropriate service standards and measuring service performance
delivery gap
difference between the retailers service standards and the actual service provided
-can close gap by exceeding or meeting service standards
communication gap
difference between the actual service provided and the service that was promised
-can close gap by more realistic service
