RMG 200 Flashcards
midterm study
chapter 1
WHAT IS RETAIL
Definiton ( retail + retailer), biggest challenge
WHAT IS RETAIL?
*Definition - set of business activities that adds value to the products and services sold to consumers for their personal or family use
( over 500 billion dollar industry in canada)
*
WHAT IS A RETAILER?
*Business that sells products and/or services to consumers for personal or family use
Does not have to be sold in a physical store
Does not have to be a product *
RETAILERS BIGGEST CHALLENGE
To have the** right merchandise **at the right price at the right time and in the **right quanitites **
chapter 1
RETAILERS ROLE IN A DISTRUBTION CHANNEL
definitions + what they do
Definition - *set of firms that facilitates the movement of products from the point of production to the point of sale to the ultimate consumer *
- Provides markets for producers to sell their merchandise and are also the final business in a distribution challen that links manufacturers to consumers
chapter 1
FUNCTIONS OF A RETAILER
Retailers provide important information that increase the value of the products and services they sell to consumers
(Facilitate the distribution of those products and services for those who prodive them)
- Provding an assortment of products and services
- Breaking bulk
- Holding inventory
- Providing services and services
chapter 1
GLOBAL RETAILERS
summary + companies
Average revuene for foreign operations for the big ten is 25.8 percent of overal income
Worldwide retail revenue 4.7 trillion, the ten largest companies represent 32.2 percent of share in the world market
( Walmart, amazon, canadian tire)
chapter 1
RETAIL MANGEMENT PROCESS
Understanding, Competiors Customers, Retailers
UNDERSTANDING
Retail mangers need to understand their environment, customers and competition before they develop and implement strategies
COMPITETORS
Primary compitietors are those with the same format
- Intratype competition (loblaws..sobeys)
- Intertype competition (amazon…walmart)
- Scrambled merchandising ( joe fresh jewlery at shoppers)
CUSTOMERS
Second factor in micro environment is cumsters, needs change at an ever increasing rate
REATILERS
Respond to broad demographic and lifestyle trends in out society, as the growth in the elderly and minority segments of canadian population and increasing importance og shopping convienves to the rising of two income families
chapter 1
RETAIL STRATEGIES
summary + key strategic analysis
How the firms plans to focus uts resources to accomplish its objectives
The target market ot markets towards which the retailer will direct its efforts
The nature of the merchandise andor service the retailer will offer to the safety needs of the target market
How the retailer will build a long term strategic compititve advantage over compeitiors
KEY STRATEGIES
- Market staregy
- Finical objectives
- Location strategy
- Organzational design
- Human resource and
- management strategies
- Retail information and supply
- chain management systems
- Customer relationship management
chapter 1
IMPLEMENTING RETAIL STRATEGY
Management develops a retail mix that is focused to the needs of the target market
Retail mix includes the decision variables use to influences a customers purchase
Elements in retail mix include types of merchandise and services, pricing, the communication program and store convenience + hr programs
chapter 1
7p’s of marketing mix
Product- types of merchandising / services offered (intenisty, assortment)
Place- length of channels, hybrid channel approaches, types of distribution channels (movement, flow of goods through the distribution channels)
Physical- theme of the store, emotional attachment customer derviers from the store, laypur, design a measure of what is like to shop the store (atmosphere, climate, the vibe of the store)
Price- value perception pricing strategies (quailitey value price)
People- product knowledge and policies getting customers in and out effecientyly (knowledgeable employees, well trained)
Promotion - public relations, sales promotion, advertsing, direct marketing, personal selling (promotional communication mix)
Process- ensure consistent behaviors and performance focus on internal process reducing variability (standards, processing systems workflow and protocols)
chapter 1
ETHICS AND LEGAL CONSIDERATION
summary + ethics tests
WHAT ARE ETHICS
Ethics are the principles governing the behaviour of individuals and companies to establish appropriate behaviour and indicate what is wrong
TESTS OF ETHICS
**The publicity test **
Would i want to see this action that im about to do on the front page of vogue
**The moral test **
What would the person i admire the most do in this situation
The admired observer test
Would the person i admire the most be proud of me in the situation
**Transparency test **
Could i give a clear reason for my action being honest and transparent
**
The person in the mirror test **
Will i be able to look at myself in the mirror and respect the person i see
**The golden rule test **
Would i like to be on the receiving end of this action and its potential consequences
chapter 1
what is non store retailing
sold through the interent, avon, watching netflix, sold through catouluges
chapter 1
vertical intergration
when the firm performs more than one set of activites in the channel
chapter 1
backward intergration
when retailer perfoms some distrubtion and manufacturing activites (opperating ware house or designer labels)
chapter 2
DIVERISTY OF RETAIL FROMATS
Buying local, going green, new age of marketing,
Retail is changing evolving and adapting ocnstantly
Many stores sell many retail categories + online
summary
INDUSTRY COMPETITION
Small number of large retailers controlling retail categories
Walmart canadian tire, shoppers drugmart, holt renfrew, hudsons bay and weston group
chapter 2
4 RETAIL CHARCHTERISTICS
- types of merchanidse/service offered
- breadth and depth of merchandise offered
- level of customer services
- price of merchanidse
chapter 2
breadth vs depth
summarys + cost of offering
Depth - number of items within each product line
Breadth - number of different product lines
**COST OF OFFERING BREADTH AND DEPTH OF MERCHANIDSE AND SERVICE
**
Stocking a deep assortment is appealing to customers but costly for retailers
When a retailer offers many SKU inventory investment increases because the retailers must hsve backup stock for each SKU
Services attract customers to the retailer but they are costly
chapter 2
TYPES OF RETAILERS
General merchandise
Includes discount stores, speciality stores, category specialists, department stores, drug stores, off price, retailers and value retailers
Food retailers
Includes supermarkets, big box food, retailers convenience stores
Non-store formats
Includes electronics retailers, catalouge, direct retailers, direct selling, tv home shopping, vending machines
Services retailing
Includes airlines, pet grooming, diet centres
chapter 2
ISSUES IN STORE RETAILING
Tailor their retail strategy toward a very specific market segment
Vulnerable to shifts in consumer taste and pereferances
Customers prefer convenience of shopping outside of malls
chapter 2
CATEGORY SPECIALIST + ISSUES
Category specialist - bass pro, offers merchandise for all outdoor activities, home depot offer all things for construction
Issues
- Intense direct competition
- Differentiation
- Focus on service
- Available locations
- Increased competition with national expansion and consolidation
chapter 2
DEPARTMENT STORES
summary + 3 tiers + issues
Retailer that carrie a broad variety and deep assortment of stick, offers some customer services and is organizaed in different departments for displaying
Three tiers of department stores
Upscale - holt renfrew
Hudsons bay - mid scale
Value orientated - canadian tire (price conscious consumers)
Issues
- Increased competition
- Difficult to find merchandise
- Higher prices charged
chapter 2
PHARMACY RETAILERS
A speciality store that concentrates on health and personal grooming merchandise
Issues
Aging population (requires more perscription)
Competition from discount stores
Response
Offering wider assortment of merchandise
More frequent purchase of food items
Drive through windows for picking up prescriptions
chapter 2
OFF PRICE REATILERS + VALUE RETAILER
OFF PRICE RETAILER
Offers inconsistent assortment of brand name fashion- orientated soft goods at low prices (winners)
Can sell of brand name and even designer label merchandise at low prices due to unique buying merchandise practices
VALUE RETAILER
General merchandise discount stores that are found in low-income urban or middle income suburbs or rual areas
Fast growing segment in canada
chapter 2
BIG BOX FOOD RETAILERS + WHOLE SALE CLUB + FOOD RETAILERS + CONVIENCE STORES
BIG BOX RETAILERS
160,00 - 200,000 square feet in size and offer a variety of food (30-40 percent) and non food merchandise (60-70 percent)
Loblaws + walmart
Hyper markets are large food retailers (stock less than supercenters), created in france
WHOLESALE CULB
Retailer offers a limited assortment of food and general merchandise with little service at low prices to unlaitme consumers and small businesses
FOOD RETAILERS
A conventional supermarket is large, self service retail food store
Succes factors
Fresh merchandise
health/organix merchandise
Private label merchandise
Improving the shopping experience
Issues
compeition( anywhere that sells food)
CONVIENCE STORES
Provide limited variety and assortment of merchandising in a convenient location
Small + speedy checkout
chapter 2
NON STORE RETAIL FORMATS
catelouge + electronnic retailing
- NON store retail formarts
Electronic retailing is a retail format in which retailers communicate with customers and offer products and services for asle over the internet
- Catelouges
- Personlized information about products and services
CATALOUGE
Acces and convenience for consumers
Retailers use multi-channel strategy by integrating the nterent
- Many merchandise categories from general to very specific
- Succes factors (cunsomer data, visual appeal, personalized servcoes)
ELECTRONIC RETAILING
Broader and deeper assortments
- More timely information for evaluating merchandise
- Personalization
chapter 2
DIRECT SELLING + TV HOME SHOPPING
DIRECT SELLING
Face to face interaction
Types
Party plan system - social event hosted By sales person
Multilevel system - master distributors recruit people who sell and recruit others to do the same
Pyramid scheme - illegal activity that only sells to other dsitrubtiors rather than end users
TELEVESION HOME SHOPPING
- T-commerce or teleshopping
- Cable channels detiecated to shopping
- Informercials
- Direct response advertising
chapter 2
service retailing
+ 4 differences between services and merchandise retailers
wholesale club, supermarket, category specialist, depertment store, optical center, retsurant, airplane, banks , univeristy
4 difference between services and merchandise retailers
Intangible - service cannot be seen, smelled, heard, or touched prior to purchase (university services
Inseperaple - a service is performed and consumed at the same time (tanning salon)
Perishable - a service cannot be stored like a physical good, if it is not delivered it islike it does not exist ( a concert)
Variable - each time a service performed in a different way (waiter)
CHAPTER 2
RETAIL CHANNELS
Definition - refers to the different ways in which a business can sell its products or service
BRICK AND MOTAR STORE
Stores offer a number of benefits to customers that they cant get shopping though catelouge or online
- Personal service, cash payment, immediate gratification, entertainment social experience
MULTICHANNEL RETAILERS
Sells merchandise or services through more than one channel
chapter 2
m-commerce + s-commerce + omni channel
M-commerce + S-commerce + omni channel
Purchase of products through mobile devices, social commercial is the use of social media platforms like facebook to market
and sell products and services
- Retailers developed apps that enable mobile dvcies users to engage in shopping
- ## Mobile is a natural ft for canadian consumer as canadians are adopting mobile technology
- Many retailers are currently focusing on optimizing their websites for mobile devices
Omni channel
Requires seamless inetergartion between channels so that shoppers can shop any way they want with same results
- An integrated experience that melds advantages of physical shopping with information rich experience of online shopping
Canadian tire - omni channel
- Pick up towers ( buy online, pick up in stors)
- Electronic labels
- Personlized marketing
- AI forecasting
chapter 2
TYPES OF RETAIL OWNERSHIP + SME
TYPES OF RETAIL OWNERSHIP
Independent single store, corporate retal chains, franchise
How to succeed in franchising SMEs
- Learn from past embrace you” why”
- Be custom cenetric ( better service)
- Create an experience
- Rethink marketing
- Cut costs
- Partnerships
chapter 3
WHY CONSUMERS BUY
WHY DO CONSUMERS BUY + BUYING PROCESS
- To reinforce self-concepts, to maintain their lifestyles, to become part of a group or gain acceptance
- YOU CAN NOT BE ALL THINGS TO ALL CUSTOMERS
- Information about buying process is used to create market segment
Influence on buyer behaviour
Economic - humans are rational decision markers who want to take maxim utility out of fixed/ minimum price
Physcology - according to psychology any human activity is directed towards meeting certain needs (maslows hierarchy)
Sociology - effect of reference group, society role in society
chapter 3
CONSUMER BEHAVIOUR ROLES
Initiator - individual who determines that some need or want is not being fulfilled and authorized by a purchase to rectify the situation
Gate keeper
Influences the familys processing of information the gathekeeper has te greatest knowledge in acquiring and evaluating the information
Influencer
Person who by some intentional or unintentional word or action, influences the buying decision atual purchase an dor use of the product or service
Decider
The person or persons who actually determines which product or service will be chosen
Buyer
An individual who actually makes the purchase transaction
User-
Person most directly involved in the use or consumption of purchased product
chapter 3
FACTORS INFLUENCING CONSUMER BEHAVIOURS
Cultural ( culture)
Social ( reference groups, family, roles & status)
Personal ( age & life cycle stage, occupations, economic lifestyle, personality & self concept)
Psychological (motivation, perception, learning)
chapter 3
CHARCHTERISTICS AFFECTING CONSUMER BEHAVIOURS
Self concept and life style
Who someone sees themself
4 self concepts
Actual self ( reflective of hoe the individual actually is)
Ideal self ( how the individual would like to be)
Private self ( intentionally hidden from others)
Public self (self that is shown to the public)
Perceived risk
Uncertainty that consumers face when the can not see the consequences of their purchase
Types of risk
Functional risk ( the product will not perform well)
Physical risk ( risk the product may pose)
Social risk ( poor product may cause social embaressemtn)
Time risk ( time spent searching for product is waste if product does not perform wel)
Perception of risk
Consumers perception of risk varies depending on the person produc situation ot culture
chapter 3
THE BUYING PROCESS 1
Needs regictintion
The buying proces starts when consumers recigonxe they have an unsatisfied needs
Types of needs
Utilitarian - when consumers go shopping to accomplish a specific task
Hedonic - when consumers go shopping for pleasure ( stimulation, social experience, learning new trends, status and power, self reward)
Stimulation needs recigintion
Customers need tor ealize there need before they are motivated to shop
Advertising, publicity, special events or communication
chapter 3
BUYING PROCESS 2
Once customers idenitfy the need may seek information about retailers
Sources of information
- Internal sources of information ( customers memory, such as names, images and past experiences with different stores)
- External sources of information ( info provided by media and other people)
Reducing information search
- Retailers objective at the info stage of the buying process is it o limit customers search to its store
- Each retail mix can be used for this
chapter 3
BUYING PROCESS 3
Evaluation of alternatives - the multiattribute attitude model
Provides a useful way to summarize how customers use the information they have and collect about alternative products
Based on notion customers see a retailer, a product, a service as a collection of attributes
is designed to predict a customers evaluations of a product service or retailer ( performance on relevant attributes, importance of attributes to the customer)
chapter 3
RETAILERS PERSPECTIVE
Must do market research
- Alternative retails the customers consider
- Characteristics or benefits that customers consider when evaluating and choosing a retailer
- Customers ratings of each retailers performance on the characteristics
- Importance weights that customers attach to each
4 methods to increase customers will select their store
- An increase belif about the stores performance
- Decrease the performance beliefs for competing stores in the consideration set
- Increase customers importance weights adding a new benefit
BUYING PROCESS 4+5
- Purchasing the merchandise or service
All about converting positive evaluations into a purchase
Making it easier
- Reduce actual wait times by installing digital displays to entertain customers waiting
- Reduce percivrd wait times by installing displays
On website easy navigation - Self service checkouts
- Post- purchase evaluation
All about satisfaction
How well a store product or service is
- Loyalty
- Competitive advantages
chapter 3
TYPES OF BUYING DECISIONS
Extended problem solving
- Customers devote considerable time and effort to analyzing their alternatives
Limited problem solving
- A purchase decision process involving moderate emount of effort anf time
Habitual decision making
- A purchase decision process involving little or no conscious effort
- Brand loyalt ( customers like and consistently by a specific brand in a product category)
- Retailer loyalty ( customers like and consistentiyly shop at the same retailers for particular products
Factors influence the customers social environment
Family - many purchase decisons are made for products that the entrie family will consume or use
Reference groups- composed of two or more people whom a person uses as a basis of comparision for his or her belifs feelings and behaviours
Canada multiculltrual market - visible minorities in canadas have grown threefold over the lst two decades
chapter 3
CONSUMER GIFITING BEHAVIOUR
Inter group - a grou giving a gift to another group ( a gift from one family to another)
Inter category - an individual giving a gift to a group or a group giving a gift to individual
Intra group - a group giving a gift to itself or its members
Interpersonal - an idnvidual giving a gift to another individual
Intrapersonal - self gift
chapter 3
MARKET SEGMENT
MARKET SEGMENT
A group of customers whose needs are satisfied by the same retail mix because they have similar needs
Criteria of viable market segment
Actionability - the fundamental criteria for evaluting a retail market ( customers in the segment must have similar needs seek similar benefits)
Indetfiability - retailers must be able to identify the customers in a target segment and it permits the retailer to determine the segment size and with whom the retailer should communicate when promoting its retail offering
Accessibility - the ability of the retailer to deliver the appropriate retail mix the customer its targeted segment
Size- a target segment must be large enough to support a unique retail mix
chapter 3
GEOGRAPHIC SEGMENTATION + LIFESTYLE SEGMENTATION
GEOGRAPHIC SEGEMENTATION
Groups customers by where they live
A retail marker can be segmented by country and b areras within a country such as provinces cities and neighbours
Life style segmentation
Method of segmenting a retail market based on consumers lifestyle
How they spend their time and money
What activities they purse
chapter 3
BUYING SITUATION SEGMENTATION + COMPOSITE SEGMENTATION
BUYING SITUATION SEGMENTATION
- Method of segmenting a retail market baased on customer needs in a specific biying situation
- The buying behaviour of customers with the same lifestyle can differ their buying attention
- Group customers seeking similar benefits
COMPOSITE SEGMENTATION
- Use multiple variables to identify customers in their target marker
- Benefits, lifestye
