1. Retail Marketing Lecturer: S. van Renssen

2. Literature Introduction to Retailing, Lusch, Dunne, Carver ISBN 978-0-538-75507-8

3. Overview 1.1Introduction to Retail MarketingCh. 1, 2 1.2Retail Customers and Competition in retail Ch. 3, 4 1.3Managing the supply chain, Legal and ethical behavior Ch. 5, 6 1.4Market selection and location analysis Ch. 7 1.5Managing retailers financesCh. 8, 9, 10 1.6Creating the propositionCh. 10, 11, 12 1.7People and organisationCh. 14

4. 4 Learning Objectives Explain what retailing is. Describe trends in retailing Describe the five methods used to categorize retailers. Explain different methods for the study of retailing

5. 5 What is Retailing? Retailing Consists of the final activity and steps needed to place a product in the hands of the consumer or to provide services to the consumer.

6. Modern retailing Retailer: Category Management Manufacturer: Trade Marketing

7. Consumer Distribution Diagram Your brandCompeting brand Wholesaler Retailer Trade marketing Retailmarketing Consumer marketing

8. Manufacturer Consumer marketing (pull) Retailer Trade marketing Professional cooperation Push marketing Retail marketing Phases in the cooperation between manufacturer and retailer

9. Trends in retailing Growth of E-tailing Price competition Internationalisation Demographic shift Store size increasing

10. 10 Categorizing Retailers By industry or branch of activity (type of business) Number of Outlets Store Format (margin versus turnover) Location Size

11. 11 Classification by industry or branch of activity The United Nations system (ISIC, rev.4). Classification is by industry or branch of activity (one digit), with further subdivision into classes (two digits) and sub-classes (three digits).

12. ISIC CodeFormal descriptionCommon description 471 Non-specialized retail trade in stores 4711Retail sale in non-specialized stores with food, beverages or tobacco predominating Supermarkets 4719Other retail sale in non-specialized storesDepartment stores 472 Retail sale of food, beverages and tobacco in specialized stores 4721Retail sale of food in specialized storesThis class includes - meat and meat products incl poultry - fish and seafood - fruit and vegetables - bakery products - confectionery and nuts stores - bottled water and soft drink stores - coffee stores - spice stores - other miscellaneous specialty food stores - beer, wine, and liquor stores - health food supplement stores - vitamin stores - tobacco stores 4722Retail sale of beverages in specialized storesretail sale of beverages - alcoholic beverages - non-alcoholic beverages 4723Retail sale of tobacco products in specialized stores retail sale of tobacco and tobacco products 473 Retail sale of automotive fuel in specialized stores 4730 Retail sale of automotive fuel in specialized stores 474 Retail sale of information and communications equipment in specialized stores Computers, peripheral units, software and telecommunications equipment in specialized stores

13. Classification by Number of Outlets Single independent store (mum-and-dad store) Small chains (2-9 outlets) Medium sized chains (10 – 50 outlets) Large chains (50+ outlets) Retailers with several outlets are stronger because they can spread fixed costs

14. Classification by Store Format Discount stores Convenience stores Specialist stores Style shops Branded goods shops Service shops Locally specific shops Non-store retailers Supermarkets Hypermarkets Department stores

15. 15 Margins Versus Turnover Gross Margin Is net sales minus the cost of goods sold. Gross Margin Percentage Is the gross margin divided by net sales or what percent of each sales € is gross margin.

16. 16 Margins Versus Turnover Operating Expenses Are the expenses the retailer incurs in running the business other than the cost of the merchandise. Inventory Turnover Refers to the number of times per year, on average, that a retailer sells its inventory.

17. Margin versus Turnover High margin, low tunover (most common) High performance retailers No survival Discount store Margin Turnover

18. 18 Classification by Location Free Standing Sites City or Town Locations –Inner City –Main Street Shopping Centers –Strip Shopping Centers –Shopping Malls Other Location Opportunities

19. 19 Classification by Size m 2 Sales Area Number of employees (f.t.e.) Sales volume Larger retailer have lower operating costs per sales € than smaller firms

20. 20 Assignment 1. Go to www.careersinretailing.com Pick any of the listed retailers. As a manager for your selected retailer, compare your retailer’s web site to that of several other retailers. What changes would you make to your web site? You want to use your web site to make individuals interested in working for your retail enterprise.

21. 21 A career in retailing Hard Work Analytical Skills Creativity Decisiveness Flexibility Initiative Leadership Organization Risk Taking Stress Tolerance Perseverance Enthusiasm

22. 22 The Study and Practice of Retailing (P. 32) Analytical Method Manager is finder and investigator of facts. Creative Method Manager is conceptual and very imaginative. Two-Pronged Method Manager who employs both approaches.

23. Strategic Planning in Retail Mission statement Statement of goals and objectives Financial objectives Productivity objectives Societal objectives Personal objectives Strategies SWOT analysis

24. 24 Elements of a Mission Statement How the retailer uses or intends to use its resources How it expects to relate to the ever-changing environment The kinds of values it intends to provide in order to serve the needs and wants of the consumer

25. 25 Components of Strategic Planning Goals and Objectives are the performance results intended to be brought about through the execution of a strategy. Market performance objectives Financial performance objectives

26. 26 Market Performance Objectives Sales Volume Market Share (sales) Market share (sales volume)

27. 27 Financial Performance Objectives Net Profit Margin Asset Turnover Return on Assets Financial Leverage Return on Net Worth

28. 28 Strategic Profit Model Net Profit Margin Net Profit*  Total Sales Asset Turnover Total Sales  Total Assets x *Net profit after taxes = Return on Assets Net Profit*  Total Assets Financial Leverage Total Assets  Net Worth Return on Net Worth Net Profit*  Net Worth x=

29. 29 Retail Objectives Retail Mission Market Performance Objectives Financial Performance Objectives Personal Objectives Societal Objectives Sales Volume Market Share Self- Gratification Power and Authority Status and Respect Benefactor Equity Consumer Choice Taxes Employment Productivity Profitability

30. 30 Strategy Is a carefully designed plan for achieving the retailer’s goals and objectives.

31. 31 Retail Strategies Get shoppers into your store. Convert these consumers into customers by having them purchase merchandise. Do this at the lowest operating cost possible that is consistent with the level of service that your customers expect.

32. 32 Environmental analysis SWOT Analysis Is the identification and analysis of a retailer’s strengths and weaknesses and the opportunities and threats the firm faces.

33. 33 Strategy Retail mix Is the combination of merchandise, assortment, price, promotion, customer service, and store layout that best serves the segments targeted by the retailer. Brand mix Is the combination of brands (manufacturer brands, retailer brands) of the retailer.

34. 34 Retail Strategic Planning and Operations Management Model Mission Goals and Objectives SWOT Strengths Weaknesses Opportunities Threats Strategic Planning Social and Legal Environment: Socioeconomic Environment, State of Technology, Legal System, Ethical Behavior Competitive Environment: Behavior of Consumers, Competition and Channel Members

35. 35 Retail Strategic Planning and Operations Management Model Competitive Environment: Behavior of Consumers, Competition and Channel Members Social and Legal Environment: Socioeconomic Environment, State of Technology, Legal System, Ethical Behavior Retail Marketing Strategy Target Market(s) Location(s) Retail Mix Brand mix Merchandise Pricing Advertising & Promotion Customer Service & Selling Store Layout & Design Operations Management Buying & Handling Merchandise Pricing Advertising & Promotion Customer Services & Selling Facilities High-Profit Performance Retailing