Module 1: Introduction to the world of retailing Flashcards
The set of business activities that adds value to the products and services sold to consumers for their personal family use
Retailing
Set of firms that make and deliver a given set of goods and services to the ultimate consumer
Supply chain
Retailer’s role in the supply chain
Manufacturer - Wholesaler - Retailer - Final Consumer
Engage in buying and taking title to, often sorting and physical handling of goods in large quantities then reselling the goods to retailer or industrial user
Wholesaler
Satisfy retailer
Wholesaler
Satisfy consumer
Retailer
Means that a firm perform more than one set of activities in the supply chain such as investments by retailers in wholesaling or manufacturing
Vertical integration
When a retailer performs some distribution and manufacturing activities
Backward integration
Backward integration
Retailer ➡️ wholesaler➡️ manufacturer
Occurs when a manufacturer undertakes retailing activities
Forward integration
Forward integration
Manufacturer ➡️ wholesaler ➡️ retailer
Examples of firms engaging in vertical integration
Victoria secret
Avon Direct selling company
Value creating functions of retailers
- Providing an assortment of products and services
- Breaking bulk
- Holding inventory
- Providing services
Is the process of offering products in smaller quantities tailored to individual consumers and household consumption pattern
Breaking bulk
Social and economic significance of retailing
1.Retailers are socially responsible businesses
2. Retail sales
3. Retailing provides employment
4. Retailers are becoming increasingly international in the geographic scope of operation which contributes to global industry
Describes the voluntary actions taken by a company to address ethical, social, and environmental impacts of its business
Corporate Social responsibility
Opportunities in retailing
Management opportunities
Entrepreneurial opportunities
Retailers employ people with expertise and interests in finance, accounting, human resource, supply chain management, and computer systems, as well as marketing
Management opportunities
Retailing provides opportunities for people who wish to start their own business. In fact, some of the world’s richest people are retailing entrepreneurs
Entrepreneurial opportunities
Critical environmental factors
Macroenvironment
Microenvironment
Technological, social, ethical, political environment
Macroenvironment
Focuses specially on customers and competition
Microenvironment
Microenvironment focuses on:
Customers and competition
2 types of competition
Intratype competition
Intertype competition
Competition between the same type of retailers
Intratype competition
Competition between retailers that sell similar merchandise but using different formats
Intertype competition
Indicates how the firm plans to focus its resources to accomplish the objectives
Retail strategy
Retail strategies
*target market
*nature if merchandise and service that the retailer will offer to satisfy the needs of the target market
*How the retailer can build a long term advantage over its competitors
Strategic decision areas in retailing
- Determining its target market
- Determining its financial status
- Location
- Organization human resource structure
- Information system
- Supply chain organization
- Customer relationship strategies
Includes the decision variables retailers use to satisfy customers needs and influence their purchase decisions
Retail mix
Elements of the retail mix
- Types of merchandise and services offered
- Merchandise pricing
- Advertising and promotional programs
- Store design
- Merchandise display
- Assistance to customers provided by salespeople
- Convenience of the store location
