Mkt312-Midterm1-Set4

Front 1

customer service

Back 1

-iffy, humans are less consistent.
-very difficult

Front 2

market penetration opporutnity

Back 2

invovles directing effortrs toward existing customers by using the present retailling format
do it by:
-attracting customers in its current target market who dont alraedy shop there
-buy more merchandise

Front 3

cross-selling

Back 3

sales associates in one department attempt to sell compelemntary merchandise from other departments to their customers.

Front 4

market expansion opporutnity

Back 4

employs the exisiting retail format in new market segments
-entering new geographic market segment w/ esentially the same retail format

Front 5

retail format development opporutnity

Back 5

-invovles offeringa new retail format-a format with a different retail mix-to the same target market.
-when a retailer adds merchandise categories

Front 6

diversification opportunity

Back 6

when a retailer introduces a new retail format directed toward a market segment that's not currently served

Front 7

related diversification opporutnity

Back 7

present target market or retail format shares somethign in common with the new opportunityl.
-can use same vendors, same distribution/mgmt information system

Front 8

unrelated diversification

Back 8

lacks any commonality b/t the present business and the new business
-considered very risky and often dont' work
--retailers have the least competitive advantage when purusing difersification

Front 9

vertical integration

Back 9

diversification by retailers into wholesaing or manufacturing
-has good benefit for large and sophisticated retailers that can invest heavily for the long term

Front 10

backward integration

Back 10

integrates by purchasing or otherwise partnering w/ distribution or manufacutring concerns. b/c of the requisite skills are different from those usually associated w/ retailing

Front 11

forward integrate

Back 11

manufacturer's marketin gactivies are very different from those of a retailer like Nike, Prada, Ralph Lauren

Front 12

category killers and hypermarket retailers may be particularly suited to

Back 12

succeed internationally b/c of expertise they've already eveloped at home
-economies of scale and efficient distrubtion systems
-developed unique systems and standaradized formats that failitate control over multiple stores
-category killer's narrow assortment and focused strategy->improves mgmt. coordination
-

Front 13

sucessfully exploited intl growth opportunities are:

Back 13

1. globally sustainable competitive advantage
2. adaptability
3. global culture
4. deep pockets

Front 14

global sustainable compettive advantage

Back 14

entry into non domestic markets is most successful when the expansion opportunity is consistent with the retailer's core bases of copmetitive advnatgage

Front 15

direct investment

Back 15

retail firm investing in and owning a division or subsidiary that builds and operates stores in a foreign country;
-requires the highest level of investment and exposes the retailer to significant risks, but it has the highest potential returns

Front 16

join venture

Back 16

formed when the entering retailer pools in resources w/ a local retailer to form a new company in whcih ownership, control, and profits are shrared
-reduces risk
-bad if partners disagree

Front 17

strategic alliance

Back 17

collaborative relationship between independent firms

Front 18

franchising

Back 18

offers the lowest risk and requires the least investment
-entrant has limited control over the retail operations in the foreign country, potential profit is redeuced, and the risk of assisting in the creation of a local domestic competitior is increased

Front 19

strategic retail plannign process

Back 19

set of of steps a retailer goes through to develop a strategic retail plan
-describes how retailers select target market segments, determine the appropriate retail format, and build sustainable competitive advanatages

Front 20

steps for strategic retail planning:

Back 20

1. business mission
2. situation audit
3. identify strategic opportunities
4. evaluate strategic opportunities
5. establish specific objectives and allocate resources
6. develop a retail mix to implement strategy
7. evaluate performance and make adjustments

Front 21

1. mission stmt

Back 21

broad description fo a retailer's objectives and the scope of activities it plans to undertake ->should define the general nature of the target segments and retail formats that the firm will consider.

Front 22

2. situation audit

Back 22

analysis of the opp. and threats in the retail evniornemnt and the strengths and weaknesses of the retail business relative to its competitiors
-market factors (consumers and buying paterns
-competitive factors (barriers to entry, vendors, rivalry,)
-environemtnal factors:PEST
-SWOT

Front 23

bargaining power of vendors

Back 23

less attractive when a few vendors control the merchandise sold in it
-have power to sell products to retailers really high

Front 24

competitive rivalry

Back 24

frequency and intensity of reactions to actions under taken by competitiors
-large number of similar size competitiors
-slow growth
-high fixed costs
-lack of perceved differences b/t competing retailers

Front 25

small retailers can compete well by

Back 25

-offering unique merchandise tailored to local community
-giving customers a personal touch
-developing ties w/ local community

Front 26

3. identify strategi opportunities

Back 26

ideitnfy opp. for increasing retail sales.. part of the strategic retail business analysis

Front 27

4. evaluate strategic opportunities

Back 27

evaluate opportunties that have been identified in situation audit
-determines the retailer's potential to establish a sustainable competitive advantage and reap long-term profits from the opp. under evaluation

Front 28

5. establish specifc objectives and allocate resources

Back 28

-performance sought
-time frame within whcich the goal is to be achieved
-the level of investment needed to achieve the objective

Front 29

step 6. develop a retail mix to impelemnt strategy

Back 29

-develop retail mix for each opp. in which investment will be made and to control and evaluate performance

Front 30

step 7 . evaluate performance and make adjustments

Back 30

-eavluate restuls.

Front 31

profit path

Back 31

measure dby net profit margin-how much profit
)after tax) a firm makes divided by its net sales

Front 32

turnover path

Back 32

measured by asset turnover-used to measure the productivity of a firm's investment in assets; net profits/ total assets

Front 33

return on assets=

Back 33

net profit x asset turnover

Front 34

net sales

Back 34

total number of dollars received by a retailer after all refunds have been paid to customers for returned merchandise: gross asmts of sales-customer returns-customer allowances

Front 35

customter returns

Back 35

value of merchandise that customers return b/c it's damaged, doesnt fit-->customer allowance

Front 36

gross margin

Back 36

net sales-COGS; also called gross prift; important measure in retailing. ; how much profit it's making on merchanidse sales w/o considering the expenses associated w/ operating the store.
-express as apercentage of net sales ->WAl-Mart has lower gross margins than jewelry stores

Front 37

expenses

Back 37

costs incurredin the normal course of doign business to generate revenues-discount stores usually have low selling expenses

Front 38

net profit

Back 38

measure of the firm's overall perfoamcne; net profit=gross margin-expenses

Front 39

net profit margin

Back 39

net prift/ net sales

Front 40

assets

Back 40

liabilites+ owners' equit; economci resources owned or controle dby an enterprise as a result of past transactions or events

Front 41

liabilities

Back 41

enterprise's obligations (naccoutns papyable) to pay cash or other economic resources in return for past, current, or future benefits

Front 42

owners' equity

Back 42

owners' investment in the business

Front 43

current assets

Back 43

can be convereted to cash within on year.

Front 44

inventory turnover

Back 44

used to evaluate how effectivley managers utilize theirn investmen in inventory=net slaes/ avg. inventory

Front 45

fixed assets

Back 45

assets that rquire more than a year to convert to cash

Front 46

fixed assets-

Back 46

asset cost-deprciation

Front 47

asset turnover

Back 47

net sales/ total assets

Front 48

accounts payable

Back 48

amt. of money owed to vendors

Front 49

notes payable

Back 49

principal and interest the retailer oweds to financial instituation

Front 50

accrued liabilities

Back 50

taxes, salaries, rent, utilities,

Front 51

long-term liabilities

Back 51

debts that will be paid after on year

Front 52

stockholders' equity

Back 52

common stock, hav voting rights, right to purchase more to maintain same percentage

Front 53

retained eranings

Back 53

portion of woner's equity that has accumulated over time through profits but hasnt't been paid out in dividends to owners.

Front 54

return on assets

Back 54

net profit margin x asset turnover

Front 55

inventory turnover

Back 55

net sales/ avg. inventory

Front 56

performance objectives should include

Back 56

-performance sought, including numberical index against which progress may be measured
-time frame within which the goal is to be achieved
-the resources needed to achieve the objective

Front 57

top-down plannign

Back 57

goals are set at the top of the org. and filter down therough the operating levels

Front 58

input measures

Back 58

asses the amt. of resources/money used by retailer to ahiceve outputs

Front 59

output measures

Back 59

measures the results of a retailer's investment deisions (how many sotres to build)

Front 60

productivity measure

Back 60

ratio of an ouput to an input, determnes how weffectively a retailer uses a reousrce