© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin RETAILING 17 C HAPTER

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Identify retailers in terms of the utilities they provide. Explain the alternative ways to classify retail outlets. Understand the many methods of non- store retailing. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Classify retailers in terms of the retail positioning matrix. Develop retailing mix strategies over the life cycle of a retail store. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin SMART, CHIC, AND CHEAP: TARGET HITS THE BULL’S-EYE! RETAILING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Consumer Utilities Offered by RetailingRetailing The Global Economic Impact of Retailing THE VALUE OF RETAILING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. When Levi Straus makes jeans cut to a customer’s exact preferences and measurements, what utility is provided? A: Form Utility

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 2. Two measures of the importance or retailing in the global economy are _________ and ___________________. total sales Concept Check number of employees

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Form of Ownership Independent Retailer Corporate Chain Contractual System CLASSIFYING RETAIL OUTLETS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Level of Service Self-Service Limited Service Full-Service CLASSIFYING RETAIL OUTLETS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Merchandise Line Depth of Line Breadth of Line CLASSIFYING RETAIL OUTLETS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Breadth of Line (cont)  Scrambled merchandising Scrambled merchandising  Hypermarket Hypermarket  Intertype competition Intertype competition CLASSIFYING RETAIL OUTLETS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 1. Centralized decision making and purchasing are an advantage of ______ ownership. chain Concept Check

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. What are some examples of new forms of self-service retailers? A: Federal Express’s self-service package shipping stations, and the self-service scanning system being installed at K-Mart.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 3. Would a shop for big men’s clothes carrying pants in sizes 40 to 60 have a broad or deep product line? A: Deep

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Automatic Vending Direct Mail and Catalogs Television Home Shopping Online Retailing Telemarketing Direct Selling NONSTORE RETAILING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 1. Successful catalog retailers often send ________ catalogs to _____ markets identified in their databases. specialty Concept Check niche

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. How are retailers increasing consumer interest and involvement in online retailing? A: Tactics such as virtual models encourage consumer interaction and increase involvement.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 3. Where are direct selling retail sales growing? Why? A: Direct selling is likely to grow in market where the lack of effective distribution channels and lack of consumer knowledge about products increase the need for a person-to- person approach.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Positioning a Retail Store Retail Positioning Matrix RETAILING STRATEGY

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Positioning a Retail Store (cont) Keys to Positioning Retailing Mix RETAILING STRATEGY

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Retailing Mix (cont) Retail Pricing  Shrinkage Shrinkage  Off-price retailing Off-price retailing RETAILING STRATEGY

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Retailing Mix (cont) Store Location  Central business district Central business district  Regional shopping centers Regional shopping centers  Community shopping center Community shopping center  Strip location Strip location  Power center Power center Retail Image and Atmosphere RETAILING STRATEGY

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. What are the two dimensions of the retail positioning matrix? A: Breadth of product line and value added.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. How does original markup differ from maintained markup? A: Original markup is the initial selling price less retailer cost. Maintained markup is the final selling price less retailer cost.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 3. A huge shopping strip with multiple anchor stores is a ______ center. power Concept Check

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Wheel of Retailing THE CHANGING NATURE OF RETAILING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Retail Life Cycle THE CHANGING NATURE OF RETAILING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Multichannel Retailing  Multichannel retailers Multichannel retailers The Impact of Technology Changing Shopping Behavior FUTURE CHANGES IN RETAILING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. According to the wheel of retailing, when a new retail form appears, how would you characterize its image? A: A low-status, low-margin, low-price outlet.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 2. Market share is usually fought out before the ________ stage of the retail life cycle. maturity Concept Check

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 3. What is a smart card? A: A smart card looks like a credit card but store information about bank accounts and customer purchases on computer chips.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin All activities involved in selling, renting, and providing goods and services to ultimate consumers for personal, family, or household use. Retailing

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Distinguishes retail outlets based on whether individuals, corporate chains, or contractual systems own the outlet. Form of Ownership

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The degree of service provided to the customer by self-, limited-, and full- service retailers. Level of Service

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin How many different lines a merchant carries and in what assortment. Merchandise Line

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The store carries a large assortment of each item. Depth of Product Line

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The variety of different items a store carries. Breadth of Product Line

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Offering several unrelated product lines in a single retail store. Scrambled Merchandising

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A large store (over 200,000 sq ft) offering a mix of 40% food products and 60% general merchandise. Hypermarket

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Competition between very dissimilar types of retail competitors. Intertype Competition

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Using the telephone to interact with and sell directly to customers. Telemarketing

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Positions retail outlets on two dimensions: breadth of product line and value added. Retail Positioning Matrix

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin In retailing strategy, the (1) goods and services, (2) physical distribution, and (3) communications tactics chose by a store. Retailing Mix

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Breakage and theft of merchandise by customers and employees. Shrinkage

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Selling brand-name merchandise at lower than regular prices. Off-Price Retailing

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The oldest retail setting, the community’s downtown area. Central Business District

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Consists of 50 to 150 stores that typically attract customers who live within a 5- to 10- mile range, often containing two or three anchor stores. Regional Shopping Centers

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A retail location that typically has one primary store (usually a department store branch) and 20 to 40 smaller outlets, serving a population of consumers who are within a 10- to 20- minute drive. Community Shopping Center

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A cluster of stores serving people who live within a 5- to 10- minute drive. Strip Location

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A huge shopping strip with multiple anchor (or national stores), a convenient location, and a supermarket. Power Center

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The process of growth and decline that retail outlets, like products, experience. Retail Life Cycle

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs, television, and online retailing. Multichannel Retailers