Exploring Retail Marketing Retailing and Its Benefits 2

Chapter Objectives Define the term retailing. Explain the difference between goods and services. Identify different channels of distribution. Explain the benefits of retailing. Identify some of the tasks of retailers. 3

The Beginnings From the earliest times, people have spent their days providing for their most basic needs. The earliest form of retailing was trading. Food Shelter Clothing 4

What Is Retailing? Retailing involves the selling of products. retailing the selling of products to the customer products goods and services that have monetary value Products include goods and services. goods tangible items that are made, manufactured, or grown 5

What Is Retailing? Services are often intangible. services intangible things that people do for us that make us feel better or enhance our lives The retailing process ends with the retail customer. retail customer purchaser of goods and services from retailers 6

Retailers Offer Variety Retailing makes a vast variety of goods and services available to consumers. Products such as sweaters are available from many retailers in a variety of colors, types, and styles. 7

Peddling Merchandise Operating an e-tail business on an electronic channel—the Web—can be costly, due to design, delivery, returns, and operating expenses. Operating an e-tail business on an electronic channel—the Web—can be costly, due to design, delivery, returns, and operating expenses. Though Many larger dot-com companies crashed in the 1990’s, small stores like Harris Cyclery of West Newton, Massachusetts, actually increase sales using a basic Web site. Today, a third of Harris’s bicycle business rides in on the Web to get hard-to-find parts and personal service. Describe an e-business’s home page to your class after viewing one through marketingseries.glencoe.com. Though many larger dot-com companies crashed in the 1990s, small stores such as Harris Cyclery of West Newton, Massachusetts, actually increased sales using a basic Web site. Today a third of Harris’s bicycle business rides in on the Web to get hard-to-find parts and personal service. For more information on retailing, go to marketingseries.glencoe.com. 8

Retailing Is Global Technology has made retailing more of a global activity than ever before. Many large companies have retail outlets in other countries. Some companies sell their products globally via the Web. 9

Retailing Is High Tech Retailers use: the Internet to sell goods and services, provide information, and advertise. video technology to train employees. computers to track inventory, orders, sales data, customer demographics, and customer buying habits. 10

Retailers Are Everywhere Your computer Your toothbrush Your clothing Your breakfast Your transportation to school Your textbooks and school supplies Your CDs Your television programs Your bed Goods and Services Available Through Retailing 11

What is the difference between goods and services? 1. Define retailing. What is the difference between goods and services? Name some types of retailers. 2. Quick Check Answers It is is the selling of goods or services to the customer. Goods are tangible items, but services are intangible. Answers may include catalog, Internet, goods, and services retailers 3. 12

Nature of Retailing manufacturer business that makes or produces a good for sale Products move from the manufacturer through channels of distribution. channel of distribution path merchandise takes from where it is made to the consumer Channels of distribution can be direct and indirect channels of distribution. direct channel path that leads directly from manufacturer to consumer indirect channel path that follows more than one step 13

Nature of Retailing A product moves from the manufacturer to a wholesaler, to the retailer, and to the consumer. wholesaler one who buys large quantities of product and then resells it in smaller quantities to retailers Another type of channel of distribution is the producer channel of distribution. producer channel manufacturer also owns its retail stores; product goes from manufacturer to retail store to customer 14

Benefits of Retailing Convenience Competitive pricing Community Variety Payment options Locations Convenience Competitive pricing Employment Involvement Community Economy Jobs 15

What Retailers Do Retailers Buy Merchandise Determine Selling Price Store Goods Purchased Advertise and Promote Products Hire and Manage Employees Display Merchandise Retailers Manage Risk Provide Customer Service Service Products Sell Goods or Services 16

Career Areas of Retailing Marketing and Advertising Store Operations Loss Prevention Store Management Finance Human Resources IT and E-commerce Sales Distribution, Logistics, and Supply-Chain Management Merchandise Planning and Buying Entrepreneurship 17

What is the most important characteristic that all retailers share? 1. What is the most important characteristic that all retailers share? What are the three benefits of retailing? Describe at least three tasks that retailers perform. 2. Quick Check Answers All retailers want to make their products available to their customers when the customer wants them and where they want them. Retailing benefits customers, the community, and the local national economies. Some tasks include: buying merchandise or products, determining a selling price, storing the products purchased, advertising and promoting products and services, displaying products, selling products or services, servicing products, and so on. 3. 18

Checking Concepts 1. Define retailing. 2. Goods are items that are made, manufactured, or grown which people want to buy and use. Services are things that make us feel better or enhance our lives in some way. 2. Retailing benefits to customers by making shopping easier with convenient locations and times to shop, and by offering competitive prices. 4. direct channel, indirect channel, and producer channel. 3. Retailing is the selling of goods or services to the final customer. 1. 2. Describe the difference between goods and services. 3. Name the channels of distribution. Checking Concepts Answers Retailing is the selling of good or services to the final customer. Goods are items that are made, manufactured, or grown which people want to buy and use. Services are things that make us feel better or enhance our lives in some way. direct channel, indirect channel, and producer channel Retailing benefits customers by making shopping easier with convenient locations and times to shop, and by offering competitive prices. 4. Explain three benefits of retailing. continued 19

Checking Concepts List three tasks of retailers. 5. 6. They use computers to keep track of inventory and to gather important data about their customers’ buying habits to make buying decisions for a store. 6. A manufacturer makes or produces a product for sale. A wholesaler buys large quantities of a product and then resells it in small quantities to retailers who sell it to the customer. 7. Retailers buy merchandise or products; determine selling price; and advertise and promote products and services. 5. 6. Identify two ways retailers use computers. Checking Concepts Answers Retailers buy merchandise or products; determine selling price; and advertise and promote products and services. They use computers to keep track of inventory and to gather important data about their customers buying habits to make buying decisions for a store. A manufacturer makes or produces a product for sale. A wholesaler buys large quantities of a product and then resells it in small quantities to retailer who sells it to the customer. 7. Describe the difference between a manufacturer and a wholesaler. continued 20

Checking Concepts Critical Thinking 8. Explain how retailing has become global. Answers may vary but should include that retailing has become global due to advances in communications and the Internet. 8. Checking Concepts Answers Answers may vary but should include that retailing has become global due to advances in communications and the Internet. 21

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