MK Chapter 15 Flashcards
Retailing
Transactions in which ultimate consumers are the buyers
Major Types of Retail Stores
- General-Merchandise Retailers
- Specialty Retailers
General Merchandise Retailers
A retail establishment that offers a variety of product lines
- department stores
- discount stores
- supermarkets
- superstores
- hypermarkets
- warehouse clubs
- warehouse showrooms
- convenience stores
Department stores
Large retail organizations characterized by wide product mixes and organized into separate departments to facilitate marketing efforts and internal management
Discount stores
Self-service, general merchandise stores offering brand name and private brand products at low prices
Supermarkets
Large, self-service stores that carry a complete line of food products, along with some nonfood products
Superstores
Giant retail outlets that carry food and nonfood products found in supermarkets, as well as most routinely purchased consumer products
Hypermarkets
Stores that combine supermarket and discount shopping in one location
Warehouse clubs
Large-scale, members-only establishments that combine features of cash-and-carry wholesaling with discount retailing
Warehouse showrooms
Retail facilities in large, low-cost buildings with large on-premise inventories and minimal services
Convenience stores
Small self-servicestore offering a narrow product assortment in a convenient location.
3 types of specialty retailers - ex of each
- Traditional specialty retailers
- off price retailers
- category killers
Traditional Specialty Retailers
- Also called “limited-line” and “single-line” retailers
- Carry a narrow product mix with deep product lines (e.g., pet supplies)
- Have higher costs and higher margins
- Provide more product selection (first-line brands), product expertise, and high levels of personal service
Off-price Retailers
- Buy manufacturers’ seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts
- Charge less than department stores for comparable merchandise and offer few customer services
- Have established long-term relationships with suppliers for continuing supplies of reduced-price goods
Category Killers
Concentrate on a major product category and compete on the basis of low prices and product availability
Ex. of Category Killers
- Toys ‘R’ Us
- Home Depot
- Best Buy
- Office Depot
- PETsMart
- Barnes & Noble
Strategic Issues in Retailing
- Retail Store Location
- Types of location
- Retail Positioning
- Store Image
Retail Store Location
Factors affecting location
- Intended target market - Kinds of products - Suitability site for customer access - Characteristics of existing retail operations
Types of Locations
- Free-standing structures
- Traditional business districts
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
Store Image
Atmospherics
- The physical elements in a store’s design that appeal to consumers’ emotions and encourage buying - Interior layout, colors, furnishings, and lighting - Exterior storefront and entrance design, display windows, and traffic congestion
Category management
Managing groups of similar products that may be produced by different manufacturers
Direct Marketing
- The use of telephone, internet, and nonpersonal media to introduce products to consumers, who then can purchase them via mail, telephone, or the Internet
- A type of nonstore retailing
Direct Response Marketing
A type of marketing that occurs when a retailer advertises a product and makes it available through mail or telephone orders
Other Types of Nonstore Retailing
- Direct Selling
- Benefits
- Limitations
Franchising
An arrangement in which a supplier (franchiser) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration
- Franchiser furnishes equipment, buildings, management know-how, and marketing assistance.
- Franchisee supplies labor and capital and operates the business by the provisions of the franchise agreement.
Wholesaling
Transactions in which products are bought for resale, for making other products, or for general business operations
Services Provided by Wholesalers
- Serve as an extension of the producer’s sales force through contact with suppliers and retailers
- Lend financial assistance for the distribution channel
Transporting and warehousing inventories
Assuming credit risks of buyers/customers
Purchasing producers’ entire output: converting producer’s output immediately to working capital
Channeling information from and to sellers and buyers
Franchising Advantages
- Enables startup with limited capital
- Provides developed and proven business to franchisee
- Attracts customers with established brand name
- Allows immediate market entry
- Motivates franchisee to succeed
Franchising Disadvantages
- Control over aspects of the business and its operations by franchiser
- Expense of continuing franchise royalties and advertising fees
- Lack of control of franchisees by franchisor
Direct Selling
The marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace
- Party plans: hosting groups to view a product demonstration and encouraging participants to purchase the products
Benefit
- Personal attention to customer
- Convenience of time and place of presentation
Limitations
- High costs make it the most expensive form of selling
- Negative consumer view of direct selling
