Retail Flashcards
Adapting the resources of the firm to the opportunities and threats of an ever-changing retail environment.
Strategic Planning
Components of Strategic Planning
Mission, Statement of Goals and Objectives, SWOT, Strategies
It is a basic description of the fundamental nature, rationale, and direction of the firm.
Mission Statement
A control mechanism by establishing a standard against which the firm can measure and evaluate its performance
Statement of Goals and Objectives
The retailer’s total sales divided by total market sales.
Market Share
Products that are out of stock and therefore unavailable to customers when they want them.
Stockouts
State the sales objectives that the retailer desires for each unit of resource input.
Productivity Objectives
Net sales divided by the total square feet of retail floor space.
Space productivity
Net sales divided by the number of full time–equivalent employees
Labor productivity
Net sales divided by the average dollar investment in inventory
Merchandise productivity
Are a carefully designed plan for achieving the
retailer’s goals and objectives.
Strategies
➢What major competitive advantage(s) do we have?
➢What are we good at?
➢What do customers perceive as our strong points?
Strengths
➢What major competitive advantage(s) do competitors
have over us?
➢What are competitors better at than we are?
➢What are our major internal weaknesses?
Weaknesses
➢What favorable environmental trends may benefit our firm?
➢What is the competition doing in our market?
➢What areas of business that are closely related to ours are undeveloped?
Opportunities
➢What unfortunate environmental trends may hurt our future performance?
➢What technology is on the horizon that may soon have an impact on our firm?
Threats
Group of customers that the retailer is seeking to serve.
Target Market
Geographic space or cyberspace where the retailer conducts business.
Location
Combination of merchandise, price, advertising and promotion, location, customer service and selling, and store layout and design.
Retail Mix
A clear statement of the tangible and/or intangible results a receives from shopping at and using the retailer’s products or services.
Value Proposition
Deals with activities directed at maximizing the efficiency of the retailer’s use of resources. It is frequently referred to as day-to-day management.
Operations Management
Occurs when the total shopping experience of the customer has been met or exceeded.
Customer satisfaction
Activities performed by the retailer that influence:
* the ease with which a potential customer can shop or learn about the store’s offering.
* the ease with which a transaction can be completed once the customer attempts to make a purchase.
* the customer’s satisfaction with the transaction.
Customer services
Occurs when a market has homogenous products and many buyers and sellers, all having perfect knowledge of the market, and ease of entry for both buyers and sellers
Pure competition
Occurs when there is only one seller for a product or service.
Pure monopoly
Occurs when the products offered are different, yet viewed as substitutable for each other and the sellers recognize that they compete with sellers of these different products.
Monopolistic competition
Relatively few sellers, or many small firms who follow the lead of a few larger firms. Offer essentially homogeneous products and any action by one
seller is expected to be noticed and reacted to by the other sellers
Oligopolistic competition
Are likely to end up selling at a similar price since everybody knows what others are doing.
Oligopolies
Occurs when a household travels outside their community of residence or uses the Internet to shop in another community.
Outshopping
Identifying a well-defined market segment using demographic or lifestyle variables and appealing to this segment with a clearly differentiated approach.
Store positioning
Condition in a community where the number of stores in relation to households is so large that to engage in retailing is usually unprofitable or marginally profitable.
Overstored
Condition in a community where the number of stores in relation to households is relatively low so that engaging in retailing is an attractive economic endeavor
Understored
(True or False):
Competition is most intense in overstored markets because many retailers are achieving an
inadequate return on investment
True
(True or False):
Nonprice variables are directed at enlarging the retailer’s demand by offering customers benefits beyond simply the lowest price
True
Shell, Petron, Sea Oil, and Caltex are what examples of market structure
Oligopoly
(True or False):
Retailers in monopolistic competition attempt to differentiate themselves with the products or services they offer.
True
Channel members that take title to the goods as they move through the marketing channel.
Primary marketing institutions
Channel members that do not actually take title but assist in the marketing process by specializing in the performance of certain marketing functions.
Facilitating marketing institutions
Channel member is loosely aligned with the others and takes a short term orientation; is an unproductive method for marketing goods.
Conventional marketing channel
Several levels are professionally managed and centrally programmed to realize the technological, managerial, and promotional economies of a long-term relationship orientation
Vertical marketing channels
Either a manufacturer that has integrated vertically forward to reach the consumer or a retailer that has integrated vertically backward to create a self supply network.
Corporate vertical marketing channels
Use a contract to govern the working relationship between channel members
Contractual vertical marketing channels
The wholesaler brings together a group of independently owned retailers and offers them a coordinated merchandising and buying program that will provide them with economies
Wholesaler-sponsored voluntary groups
Wholesale institutions, organized and owned by member retailers, that offer scale economies and services to member retailers, which allows them to compete with larger chain buying organizations.
Retailer-owned cooperatives
Exist when one of the channel members takes the initiative to lead the channel by applying the principles of effective interorganizational management.
Administered vertical marketing channels
Occurs when a retailer needs another supply chain member or vice versa to perform certain marketing functions.
Dependency
When two members of the supply chain are dependent on each other.
Interdependent
(True or False):
Interdependency is at the root of the collaboration found in today’s supply chains, and is the major cause of conflict found in supply.
True
Ability of one channel member to influence
the decisions of the other channel members.
Power
- Education
- State of Marriage
- Divorce
- Makeup of households
- Changing nature of work
Social Trend
- Income growth
- Personal savings
- Women in the labor force
- Widespread use of credit
Economic Trend
Only one retailer in the trading area sells the products
Exclusive Distribution
Moderate number of retailers in each trading area sell products
Selective Distribution
All possible retailers in the trading area sell the products
Intensive Distribution
What marketing channel includes administered systems, contractual systems, corporate systems, wholesaler sponsored groups, retail owned cooperatives, and franchised retail programs
Vertical Marketing
Based on B’s perception that A has the ability to provide
rewards for B.
Reward Power
Based on B’s perception that A has some special knowledge.
Expertise Power
Based on the identification of B with A
Referent Power
Based on B’s belief that A has the capability to punish or
harm B if B doesn’t do what A wants.
Coercive Power
Based on A’s right to influence B, or B’s belief that B should
accept A’s influence.
Legitimate power
Based on A’s ability to provide B with factual data.
Informational Power
The retailer and supplier have different perceptions of reality.
Perceptual incongruity
Achieving the goals of either the supplier or the retailer would hamper the performance of the other
Goal incompatibility
Manufacturer sells to independent retailers and also through its own retail outlets.
Dual distribution
Disagreement about which member of the marketing channel should make decisions.
Domain disagreements
Branded merchandise flows through unauthorized channels
Gray Marketing
Branded merchandise flows through unauthorized channels
Gray Marketing
Consumer seeks product information, usage instructions, and sometimes even warranty work from a full-service store but then, armed with the brand’s model number, purchases the product from a limited service discounter or over the Internet.
Free-riding
