Chapter 12

Front 1

Wholesalers

Back 1

those persons or establishments that sell to retailers and/or organizational buyers for industrial, institutional, and commercial use, but do not sell in significant amounts to ultimate consumers.

Front 2

Standard Stock list

Back 2

requires that all stores in a retail chain stock the same merchandise

Front 3

Optional Stock list

Back 3

allows each store the flexibility of tailoring its merchandise mix to local tastes and demands

Front 4

Micro-target marketing

Back 4

merchandise selection is tailored to the local market

Front 5

Category captain

Back 5

a vendor who helps the retailer manage its limited shelf space by determining “what kind” and “how many” units of a specific product to carry on the shelves in each store

Front 6

Gross margin percentage

Back 6

shows how much gross margin a retailer makes as a percentage of sales

Front 7

Gross margin

Back 7

equals net sales minus the cost of goods sold

Front 8

Operating expenses

Back 8

the costs a retailer incurs in running a business, other than the cost of merchandise

Front 9

Inventory turnover

Back 9

refers to the number of times per year, on average, that a firm sells its inventory

Front 10

Central Business District (CBD)

Back 10

an unplanned shopping area that sprang up around the geographic point where public transportation systems converged (historically, most retailers located)

Front 11

Secondary Business District (SBD)

Back 11

a shopping area that is smaller than the CBD and that revolves around at least one department or variety store at the intersection of two major streets

Front 12

Neighborhood Business District (NBD)

Back 12

a shopping area that evolves to satisfy the convenience- oriented shopping needs of a neighborhood and generally contains several small stores, with the major retailer being either a supermarket or a variety store

Front 13

Balanced tenancy

Back 13

stores complement each other in merchandise offerings

Front 14

Anchor stores

Back 14

a dominant large-scale store that is expected to draw customers to the center

Front 15

Freestanding retailers

Back 15

a retailer that is not physically connected to other retailers but instead has an individual building and parking area

Front 16

Wheel of retailing theory

Back 16

a pattern of competitive development in retailing that states that new types of retailers enter the market as low-status, low-margin, low-price operators. However, as they meet with success, these new retailers gradually acquire more sophisticated and elaborate facilities, thereby becoming less efficient and vulnerable to new types of low-margin retail competitors that progress through the same pattern

Front 17

Retail life cycle

Back 17

a description of competitive development in retailing that assumes that retail institutions pass through an identifiable cycle that includes four distinct states: introduction, growth, maturity, and decline

Front 18

Store-based retailers

Back 18

operate from a fixed location that requires consumers to travel to the store to view and select merchandise and/or services

Front 19

Non-store-based retailers

Back 19

attempt to reach the consumer at home, work, or any place other than a store where they might be susceptible to purchasing (ex. Internet)

Front 20

Category killers

Back 20

carry such a large amount of merchandise in a single category at such good prices that they make it impossible for customers to walk out without purchasing what they need

Front 21

Scrambled merchandising

Back 21

the handling of merchandise lines based solely on the profitability criterion without regard to the consistency of the product or merchandise mix

Front 22

Retail Mix

Back 22

a retailer’s combination of merchandise, prices, advertising, location, customer services, selling, and store layout and design that is used to attract customers.

Front 23

Atmospherics

Back 23

the use of merchandise, level of service offered by employees, fixtures, floor layout, sound, and odor to influence customers’ perceptions.

Front 24

Store compatibility

Back 24

when two compatible, or very similar, businesses locate near each other, they will show an increase in sales volume greater than what they would have achieved if they were located apart from each other.

Front 25

Shrinkage

Back 25

refers to reduction of merchandise through theft, loss, and/or damage

Front 26

Category Management

Back 26

a process of managing and planning all SKUs within a product category as a distinct business so that the store can optimally use shelf space to generate the highest profits.

Front 27

SKU (stock keeping unit)

Back 27

refers to a distinct merchandise item in the retailer’s merchandise assortment

Front 28

Manufacturers’ sales branches

Back 28

are sales outlets owned by the manufacturer (include sales outlets which carry full inventory and sales offices which do not carry inventory)

Front 29

Merchant wholesalers

Back 29

independent firms which purchase a product from a manufacturer, take title to that product, and resell it to other manufacturers, wholesalers, or retailers, but not to the final customer

Front 30

Full-service merchant wholesaler

Back 30

provide a wide range of services for retailers and business purchasers

Front 31

General merchandise wholesalers

Back 31

full-service merchant wholesalers that carry a complete line of nonperishable items

Front 32

Single-line wholesalers

Back 32

full-service merchant wholesalers that carry a particular line of goods

Front 33

Specialty wholesalers

Back 33

full-service merchant wholesalers that carry a rather limited range of items

Front 34

Industrial distributors

Back 34

name for full-function merchant wholesalers in the industrial-goods market

Front 35

Limited-service merchant wholesalers

Back 35

perform only a few services for manufacturers or other customers, or they perform all of them on a more restricted basis than do full-service wholesalers

Front 36

Drop-shippers (desk jobbers)

Back 36

limited-service merchant wholesalers which pass on customer orders with instructions that the manufacturer ship directly to a location specified by the customer. No warehouse, inventory, or physical possession. May not have sales force or large promotions. Used in handling bulky goods in car-lot quantities

Front 37

Cash-and-carry wholesalers

Back 37

limited-service merchant wholesalers which do not provide customers with credit or delivery. Usually no sales force.

Front 38

Truck jobbers (wagon jobbers)

Back 38

limited-service merchant wholesalers that use their truck as a warehouse.

Front 39

Rack jobbers

Back 39

limited-service merchant wholesalers which maintain racks stocked with merchandise at the retailer’s location

Front 40

Agents/brokers

Back 40

independent middlemen who bring buyers and sellers together, provide market information to one or both parties, but never take title to the merchandise. Most work for the seller, but some work for buyers

Front 41

Manufacturers’ agents

Back 41

independent middlemen who handle a manufacturer’s marketing functions by selling part or all of a manufacturer’s product line in an assigned geographic area