McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Identify retailers in terms of the utilities they provide. LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 13, YOU SHOULD BE ABLE TO: LO1 Identify retailers in terms of the utilities they provide. LO2 Explain the alternative ways to classify retail outlets. LO3 Describe the many methods of nonstore retailing. 13-2

LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 13, YOU SHOULD BE ABLE TO: Specify the retailing mix actions used to implement a retailing strategy. Explain changes in retailing with the wheel of retailing and the retail life cycle concepts. LO5 Describe the types of firms that perform wholesaling activities and their functions. LO6 13-3

RETAILERS LOVE IT WHEN THE MAYOR VISITS! 13-4

Consumer Utilities Offered by Retailing THE VALUE OF RETAILING LO1 Retailing Consumer Utilities Offered by Retailing Place Form CarMax Video Possession Time The Global Economic Impact of Retailing 13-5

FIGURE 13-1 Which retailer best provides which utilities? 13-6

CLASSIFYING RETAIL OUTLETS Form of Ownership Level of Service Merchandise Line 13-7

MAKING RESPONSIBLE DECISIONS GREEN ISN’T JUST A COLOR TO RETAILERS MAKING RESPONSIBLE DECISIONS GREEN ISN’T JUST A COLOR TO RETAILERS. IT’S A VALUE! LO2 13-8

CLASSIFYING RETAIL OUTLETS FORM OF OWNERSHIP LO2 Independent Retailer Corporate Chain Contractual Systems Wholesaler-Sponsored Voluntary Chains Retailer-Sponsored Cooperatives 13-9

CLASSIFYING RETAIL OUTLETS FORM OF OWNERSHIP LO2 Contractual Systems Franchising Business-Format Franchises Product-Distribution Franchises 13-10

CLASSIFYING RETAIL OUTLETS LEVEL OF SERVICE LO2 Self-Service Limited Service Full-Service 13-11

FIGURE 13-2 Stores vary in terms of the breadth and depth of their merchandise lines 13-12

CLASSIFYING RETAIL OUTLETS TYPE OF MERCHANDISE LINE Depth of Product Line Specialty Outlets Category Killers 13-13

CLASSIFYING RETAIL OUTLETS TYPE OF MERCHANDISE LINE Breadth of Product Line General Merchandise Stores Scrambled Merchandising Hypermarket Supercenter Intertype Competition 13-14

FIGURE 13-A For Lands’ End, intertype competition means that there is competition between various dissimilar retail outlets 13-15

FIGURE 13-B Many retailing activities do not involve a store 13-16

Direct Mail and Catalogs NONSTORE RETAILING LO3 Automatic Vending Direct Mail and Catalogs 13-17

Television Home Shopping NONSTORE RETAILING LO3 Television Home Shopping Online Retailing 13-18

NONSTORE RETAILING Telemarketing Direct Selling Do-Not-Call Registry LO3 Telemarketing Do-Not-Call Registry Direct Selling 13-19

FIGURE 13-3 Elements of a retailing strategy 13-20

RETAILING STRATEGY Retailing Mix Retail Pricing Markdown LO4 Retailing Mix Retail Pricing Original Markup Maintained Markup Gross Margin Markdown 13-21

Everyday Low Pricing (EDLP) RETAILING STRATEGY RETAILING MIX LO4 Everyday Low Pricing (EDLP) Everyday Fair Pricing Benchmark or Signpost Items 13-22

RETAILING STRATEGY Off-Price Retailing Warehouse Club Outlet Store RETAILING MIX LO4 Off-Price Retailing Warehouse Club Outlet Store Single/Extreme Value Store 13-23

RETAILING STRATEGY Store Location Central Business District RETAILING MIX LO4 Store Location Central Business District Regional Shopping Centers Anchor Stores Community Shopping Center Strip Mall Power Center 13-24

RETAILING STRATEGY Retail Communication Merchandise Image RETAILING MIX LO4 Retail Communication Image Shopper Marketing Merchandise Category Management Marketing Metrics Sales per Sq. Ft. Same Store Sales 13-25

Sales per Square Foot ($) and Same Store Sales Growth (%) USING MARKETING DASHBOARDS Why Apple Stores May Be the Best in the United States! LO4 Sales per Square Foot ($) and Same Store Sales Growth (%) 13-26

POSITIONING A RETAIL STORE RETAILING STRATEGY POSITIONING A RETAIL STORE LO4 Retail Positioning Matrix Breadth of Product Line Value Added 13-27

FIGURE 13-C The four positioning strategies for retailers 13-28

Multichannel Retailers THE CHANGING NATURE OF RETAILING THE WHEEL OF RETAILING AND RETAIL LIFE CYCLE LO5 Wheel of Retailing Retail Life Cycle Multichannel Retailers 13-29

FIGURE 13-4 The wheel of retailing describes how outlets change over time 13-30

FIGURE 13-5 The retail life cycle describes the stage of growth and decline for retail outlets 13-31

WHOLESALING Merchant Wholesalers Full-Service Wholesalers LO6 Merchant Wholesalers Full-Service Wholesalers General Merchandise (Full-Line) Wholesalers Specialty Merchandise (Limited-Line) Wholesalers 13-32

WHOLESALING Merchant Wholesalers Limited-Service Wholesalers LO6 Merchant Wholesalers Limited-Service Wholesalers Rack Jobbers Cash and Carry Wholesalers Drop Shippers/Desk Jobbers Truck Jobbers 13-33

WHOLESALING Agents and Brokers Manufacturers LO6 Agents and Brokers Manufacturer’s Agents or Representatives Selling Agents Brokers Manufacturers Branch Offices Sales Offices 13-34

MALL OF AMERICA: SHOPPING AND A WHOLE LOT MORE VIDEO CASE 13 13-35

1. Why has Mall of America been such a marketing success so far? VIDEO CASE 13 MALL OF AMERICA 1. Why has Mall of America been such a marketing success so far? 13-36

VIDEO CASE 13 MALL OF AMERICA 2. What (a) retail and (b) consumer trends have occurred since Mall of America was opened in 1992 that it should consider when making future plans? 13-37

VIDEO CASE 13 MALL OF AMERICA 3. (a) What criteria should Mall of America use in adding new facilities to its complex? (b) Evaluate (i) retail stores, (ii) entertainment offerings, and (iii) hotels on these criteria. 13-38

VIDEO CASE 13 MALL OF AMERICA 4. What specific marketing actions would you propose that Mall of America managers take to ensure its continuing success in attracting visitors (a) from the local metropolitan area and (b) from outside of it? 13-39

Retailing Retailing consists of all activities involved in selling, renting, and providing products and services to ultimate consumers for personal, family, or household use. 13-40

Scrambled Merchandising Scrambled merchandising consists of offering several unrelated product lines in a single store. 13-41

Telemarketing Telemarketing consists of using the telephone to interact with and sell directly to consumers. 13-42

Retailing Mix The retailing mix consists of the activities related to managing the store and the merchandise in the store, which includes retail pricing, store location, retail communication, and merchandise. 13-43

Shopper Marketing Shopper marketing is the use of displays, coupons, product samples, and other brand communications to influence shopping behavior in a store. 13-44

Category Management Category management is an approach to managing the assortment of merchandise in which a manager is assigned the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other, with the objective of maximizing sales and profits in the category. 13-45

Wheel of Retailing The wheel of retailing is a concept that describes how new forms of retail outlets enter the market. 13-46

Retail Life Cycle The retail life cycle is the process of growth and decline that retail outlets, like products, experience. It consists of the early growth, accelerated development, maturity, and decline stages. 13-47

Multichannel Retailers Multichannel retailers are retailers that utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs, television home shopping, and online retailing. 13-48

Merchant Wholesalers Merchant wholesalers are independently owned firms that take title to the merchandise they handle. 13-49

Manufacturer’s Agents Manufacturer’s agents are agents who work for several producers and carry noncompetitive, complementary merchandise in an exclusive territory. Also called manufacturer’s representatives. 13-50

Brokers Brokers are independent firms or individuals whose principal function is to bring buyers and sellers together to make sales. 13-51