MKTG 101 Ch 15

  1. Retailing
    All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use.


    • Roles:
    • US retailers employ 25 mill people
    • 11.6 % of US employment
    • 13% of US businesses
    • Ring up almost 4 Trillion in sales
    • 40% GDP
    • Industry is dominated by a few giant orgs such as Walmart
  2. Classification of retail operations
    • Ownership:
    •     Interdependent Retailers - owned by a single person or partnership and not part of larger retail institution
    •     Chain Stores - Owned and operated as a group by a single org
    •     Franchises - the right to operate a business or to sell a product (mcdonalds)
    • Level of Service: Pay a higher price expect a higher level of service
    • Product Assortment:Choices bassed on what store you go to. Classification based on BREADTH and DEPTH of product lines. Why limit the (assortment) offering to maintain lower prices walmart can turn over that shelf space many times over. Increase the volume and turnover the inventory at a much faster rate.
    • Price: Traditional department stores and speciality stores sell full price. Walmart, Macys
    • Gross Margin: How much the retailer makes as a percentage of sales after the cost of goods sold is subtracted.
  3. Department stores
    • Service level: Mod hi - high
    • Assortment: Preset
    • Price: mod-high
    • Gross Margin: Mod High

    A store housing several departments under one roof. Each dept is headed by a buyer, or a department head who selects the merchandise. EX Sears
  4. Specialty store
    • Service level: high
    • Assortment: Narrow
    • Price: mod-high
    • Gross Margin: High

    A retail store specializing in a given type of merchandise. Best Buy, Lowes focusing in a special type of merchandise.

    Lowes, sepora, Dollar stores
  5. Supermarket
    • Service level:low Migrating to self service
    • Assortment: broad
    • Price: moderate
    • Gross Margin: low

    Large, departmentalized, self=service retailer. Specidalizes in food. Some use scrambled merchandise.

    Limited assortment supermarkets can offer merchandize up to 40% lower than conventional supermarkets.. tradermarkets
  6. Convenience Store
    • Service level: :pw
    • Assortment: Mod-Narrow
    • Price: mod-high
    • Gross Margin: mod - High

    A miniature supermarket, carrying only a limited line of high-turnover convenience goods.
  7. Drugstore
    • Service level: Low Med
    • Assortment: Med
    • Price: moderate
    • Gross Margin: Low

    A retail store that stocks pharmacy-related products and services as its main draw.
  8. Full time discounters
    • Service level: Mid low 
    • Assortment: Mod
    • Price: mod low 
    • Gross Margin: Mod Low

    A retailer that offers consumers very limited service and carries a broad assortment of well known, nationally branded "hard goods"


    • Mass Merchandising: a retailing strategy using moderate to low prices on large quantities of merchandise and lower levels of service to stimulate high turnover of products.
    • Supercenter: Retail store that combines groceries and general merchandise goods with a wide range of services.
  9. Speciality Discounters
    • Service level: Mod Low
    • Assortment: Mod Broad
    • Price: Mod to low
    • Gross Margin: mod low

    • A retial store that offers a nearly complete selection of single line merchandise and uses self service, discount prices, high volume, and high turnover.
    • A Category Killer: a specialty discount store that heavily dominate their merchandise segment. Home Improvement stores offering one single line.
  10. Warehouse Clubs
    • Service level: low
    • Assortment: broad
    • Price: low to very low
    • Gross Margin: low

    Limited service merchant wholesalers that sell a limited selection of brand name appliances, household items, and groceries on a cash and carry basis to members. Bulk, good return policies. membership fee, merchandise changes.

    Costco, Sams Club
  11. Off Price Retailer
    • Service level: Low
    • Assortment: Mod to narrow
    • Price: Low
    • Gross Margin: Low

    TJ Max, Marshalls, HomeGoods, Factory Outlets (picks up leftovers)

    A retailer that sells at prices 25% or more below traditional department store prices because it pays cash for its store andusually doesn't ask for return priviledges.

    Dollar Tree, limited service
  12. Resturant
    • Service level: low-high
    • Assortment: Narrow
    • Price: Low to high
    • Gross Margin: Low to high

    Straddle the line beween retail and service establishments. Sell tangible products, (food, drink) but also services (food prep, food service). Many could be considered speciality retailers
  13. Non Store retailing, direct retailing, direct marketing, and electronic retailing
    • Automatic Vending: the use of machines to offer goods for sale. Vending is the most pervasive retail business in the US. with 11.5 million vending machines selling billions of dollars worth of goods annually. Selling conveniences.
    • Direct Retailing: Door to Door, Office to office, home sales parties. Tupperware. Amway
    • Direct marketing: Telemarketing, direct mail, catalogs and mail order, electronic retailing, shop at home networks
    • Electronic Retailing: E-tailers Amazon, staples, apple, dell, walmart, sears, liberty media QVC, office max, CDW
  14. Franchising
    2 basic forms:

    • Product and Trade Name Franchising: Dealers agrees to sell in products provided by a manufacturer or wholesaler. AM PM, Hampton In H&R block, McDonalds Subway
    • Business format franchising: An ongoing business relationship between a franchiser and a franchisee.
  15. Retail Marketing Strategy
    4 Ps of the marketing mix

    • 1. Define & Select a Target Market
    •   Step 1: Demographics, geographics, psychographics

    • 2. Develop a Retailing Mix (The retailing mix  consists of six Ps: the four Ps of the marketing mix (product, place, promotion, and price) plus presentation and personnel)
    •   Step 2. Product, place, promotion, price, personnel, presentation.
    •           Product offering: The mix of products offered to the consumer by the retailer: also called the product assortment or 
    • merchandise mix.
    •           Promotion: coupons changing (facebook)
    •           Proper location: choosing a community, economic growth potential, competition, geography
    •           Retail Prices: Low vs. High prices, good value, quality image
    •           Presentation of store: Atmosphere, the overall impression, sound, employee type and density, visual factors.
    •           Personal and Customer Service: (selling techniques: trading up, suggestion selling)
    •           Customer service for Online: Easy returs, easy to use websites, product availabilty
  16. New developments in retailing
    • Interactivity: Consumers are involved in the retail experience (build a bear)
    • M-Commerece: Purchasing goods through mobile devices.
Card Set
MKTG 101 Ch 15
MKTG 101 Ch 15