1. THE VALUE OF RETAILING
Retailing
Retailing includes all activities involved in
Selling and providing goods and
services to ultimate consumers for personal,
or household use.

2. CLASSIFYING RETAIL OUTLETS
Classification of Retail
Establishments
Ownership-place
Level of Service-promotion
Product Assortment-product
Price
Notes:
A retail establishment can be classified according to its ownership, level of service, product assortment, and price.
Retailers use the latter three variables to position themselves in the competitive marketplace. These variables can be combined in several ways to create distinctly different retail operations.
Retailers manipulate their 4 P’s to get the best position in the marketplace– in other words, to create a competitive advantage

3. CLASSIFICATION BY OWNERSHIP
Independent
Retailers-one store ownership
Chain Stores-many stores but only one owner
Franchises-many owners of many stores
Notes:
Independent retailers are retailers owned by a single person or partnership. Around the world, most retailers are independent.
Chain stores are owned and operated as a group by a single organization.
Franchises are owned and operated by individuals, but are licensed by a larger supporting organization.

4. BASIC FORMS OF FRANCHISING
Product and Trade Name Franchising
Business
Format
Franchising
Dealer agrees to sell certain products provided by a manufacturer, but can use any sales tactics he chooses.
Ex-Michelin Tires, Avon
Dealer must sell the franchiser’s product in the exact way the franchiser prescribes.
Ex – McDonalds, Wendy's

5. CLASSIFICATION BY LEVEL OF SERVICE
Self Service
Full Service
Discount stores
Factory outlets
Warehouse clubs
Notes:
The level of service that retailers provide can be classified along a continuum, from full-service to self-service.
Exclusive stores

6. CLASSIFICATION BY PRODUCT OFFERING
The mix of products offered to the consumer by the retailer; also called the product assortment
Deep & narrow-like Starbucks Or
Shallow & broad like Walmart

7. CLASSIFICATION BY PRODUCT OFFERING
Depth of Product Line
Specialty Outlets
Category Killers
Breadth of Product Line
General Merchandise Stores
Scrambled Merchandising
Why do this?

8. Breadth versus depth of merchandise lines

9. MAJOR TYPES OF RETAILERS BY PRODUCT OFFERING
Department Stores
Specialty Stores
Supermarkets
Drugstores
Convenience Stores
Discount Stores
Restaurants
On Line: Walgreen’s
Do you think drugstore Web sites add value for the consumer? What services on Walgreens’ site would you be most likely to use? Would Internet selling be a factor in your choice of a pharmacy?
Notes:
With the experimentation with alternative formats of retail stores, classification has become more difficult.
Department stores: carries a wide variety of shopping and specialty goods. Purchases are made within each department.
Specialty stores: merchandise is tailored to specific target markets. Price is a secondary consideration to consumers.
Supermarkets: U.S. consumers spend about a tenth of income in supermarkets. Trends: the growth of prepared foods and time-saving products, and the need for convenience.
Drugstores: stock pharmacy-related products and services.
Convenience stores: defined as a miniature supermarket, carrying only a limited line of convenience goods.
Discount stores: a retailer that competes on the basis of low prices, high turnover, and high volume.
Restaurants: straddle the line between retailing establishments and service establishments.

10. NON-STORE RETAILING Major Forms of Nonstore Retailing
Automatic Vending
Direct Marketing
Notes:
Nonstore retailing is shopping without visiting a store. The major forms are shown here.
Electronic Retailing

11. Direct Marketing needs
Telemarketing
Catalogs & Mail Order
Direct Mail
Direct Marketing needs
no personal
interaction
On Line
Avon
What advantages to you think the Avon site has over a visit from an Avon representative? Can you get the same amount of product information from each? Does Avon offer any products that you would prefer to order from a representative?

12. CHOOSING THE RETAIL MIX
Choosing the Retailing Mix
Product
Price
Promotion
Place
Personnel
Presentation
Notes:
The retailing mix consists of six P’s: the four P’s of the marketing mix (product, price, promotion, and place), plus presentation and personnel.

13. CHOOSING THE RETAIL MIX
Target Market
Product
Price
Promotion
Place
Personnel
Presentation
Notes:
Exhibit 11.4 shows the retailing mix.

14. PRESENTATION (COMMUNICATION) OF THE RETAIL STORE
Employee Type & Density
Merchandise Type & Density
Fixture Type & Density
Sound
Odors
Visual Factors
Factors in
Creating
Store’s
Atmosphere
Notes:
The presentation of a retail store helps determine the store’s image and positioning in consumers’ minds. For example, positioning as an upscale store would use a lavish or sophisticated presentation.
The main element of presentation is atmosphere, with the most influential factors shown on this slide.
Employee type and density: an employee’s general characteristics such as friendly and knowledgeable, and the number of employees in the selling space.
Merchandise type and density: the type of merchandise carried and how it is displayed.
Fixture type and density: elegant, trendy, uncluttered. Technology may be added as a fixture.
Sound: music at a restaurant or store.
Odors: smells of pastries in bakeries, fragrances as a key design element.
Visual factors: colors can create a mood or focus attention.
4. Retailers are now adding an element of entertainment to their store atmosphere.

15. PERSONNEL OF THE RETAIL STORE Fit the image of the product
Factors in
Personnel
decisions
How many
How knowledgeable
How helpful / invasive
Fit the image of the product
Good personal sellers

16. RETAILING STRATEGY-PRICING
How much mark-up?
Allow for Shrinkage and discounting OR
Use Everyday Low Pricing
Benchmark or Signpost Items –
items used by consumers as an index
of overall price level of the store
I.e. – “How much do they sell T shirts for?”

17. RETAILING STRATEGY - LOCATION
Central Business District
Parasites
Freestanding Store
Shopping Center Tenant
Mall Tenant
Regional Shopping Centers
Anchor Stores
Strip Location
Destination stores
Power centers
Multichannel Retailers

18. FIGURE 14-5 The retail life cycle

19. Scrambled Merchandising
Scrambled merchandising involves offering several unrelated product lines in a single store.

20. Retailing Mix
The retailing mix includes the activities related to managing the store and the merchandise in the store, which includes retail pricing, store location, retail communication, and merchandise.

21. Shrinkage
Shrinkage is the breakage and theft of merchandise by customers and employees.

22. Multichannel Retailers
Multichannel retailers utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs, television, and online retailing.

23. Retail Life Cycle
The retail life cycle is the process of growth and decline that retail outlets, like products, experience, which consists of the early growth, accelerated development, maturity, and decline stages.

24. Parasites
Parasite stores do not create their own traffic. They make money based on
their proximity to things that will draw foot traffic. (bigger stores, train stations, airports, office buildings, etc.)

25. Destination Stores
Stores that generate customers from larger trading areas than their neighbors or competitors.
i.e.-Dunkin’ Donuts: “It’s worth the trip!”

26. Power Centers
Huge shopping strips with multiple anchors and often a supermarket

27. Anchor Stores
A large store, such as a department store or supermarket, that is prominently located in a shopping mall to attract customers who are then expected to patronize the other shops in the mall.