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74 Cards in this Set
- Front
- Back
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Retailing
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A set of activities that adds value to products and services designed for personal use.
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Functions of a Retailer:
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1) Providing assortments
2) Bulk breaking 3) Holding Inventory 4) providing services |
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Providing assortments:
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A store offers a lot of different types of products, that way customers don't have to go to a Lays store to buy chips, then a Pepsi store to buy soda.
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Holding Inventory:
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Function of retailers- have a selection of merchandise on hand so its ready when customers want it.
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Most important elements of the retail mix:
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1) Type of merchandise/services
2) Variety and assortment 3) Level of customer service 4) Price |
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Most important elements of the retail mix:
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1) Type of merchandise/services
2) Variety and assortment 3) Level of customer service 4) Price |
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Walmart's opportunities:
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International expansion
different formats |
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Criticisms of walmart
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1. extensive foreign sourcing
2. low wages 3. poor health insurance 4. no unions 5. sexism 6. political pressure (they donate to republicans) 7. law suits 8. kills all local stores |
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How to compete against walmart:
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Customer service
specialize |
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Threats to walmart
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Dollar stores, category specialists
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Vertical Integration:
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When a firm performs more than one channel
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Backwards Integration:
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retailer does manufacturing
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Forward Integration:
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manufacturer does retailing
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Characteristics of Retailing
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1. average amount of transaction is lower than a manufacturer's
2. unplanned or impulse purchases cause chaos 3. there's usually a visit involved (rather than a re-order) |
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Intratype competition:
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two retailers w/ the same format
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Intertype competition
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two retailers w/ different formats
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Scrambled merchandising
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when a retailer offers merch. not normally associated w/ their type of store
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Variety:
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number of different merchandise categories w/in a store
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Retail strategy:
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how the firm plans to focus its resouces to accomplish its objectives:
1. target market 2. types of merchandise 3. how to build competitive advantage |
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Retail mix:
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Decision variables retailers use to satisfy customer needs and influence their purchase decisions
1. pricing 2. products offered 3. advertising etc. |
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NAICS
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North Amercian Industry classification system
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Retail mix:
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1. type of merchandise
2. Variety 3. assortment |
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Breadth vs. Depth
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Breadth= variety
depth= assortment |
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Assortment
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number of different items in a merchandise category
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SKU
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stock keeping unit:
each individual item of merchandise ex: blue, long sleeved, Lacoste polo, size medium |
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Conventional Supermarket:
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Self-service foodstore
specializes in groceries and produce |
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Limited assortment supermarket
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same as extreme value food retailer
less assortment, better prices |
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extreme value food retailer
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same as limited assortment supermarket
less assortment, better prices |
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Supercenter:
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combines supermarket w/ full-line discount store
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Hyper market:
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similar to supercenter, but focuses more on foods, especially perishables
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Warehouse club
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limited assortment, low prices, low service
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convenience store:
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limited variety, limited assortment, high prices
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department store
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high variety, deep assortment, some service
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full-line discount store:
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broad variety, limited service, low prices
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specialty store
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limited number of complementary categories, very high service
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category specialist
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narrow variety, deep assortment
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extreme value retailer
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small, full-line discount stores, very low prices
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off-price retailers:
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closeout retailers and outlet stores
inconsistent assortment, low prices |
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services retailers:
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1. intangibility
2. simultaneous production and consumption 3. perishability 4. inconsistency |
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Multi-channel retailer
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sells thru more than one channel
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conversion rate
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% of consumers who buy the product after viewing it (generally online)
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Store channel benefits:
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1. browsing
2. touching and feeling 3. personal service 4. cash and credit 5. entertainment 6. immediate gratification 7. risk reduction |
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Catalog channel benefits
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1. convenience
2. information 3. saftey |
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Internet channel benefits
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1. broad selection
2. more info to evaluate 3. personalization |
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reasons for retailers to go online:
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1. overcoming limitations of existing format
2. market presence 3. share of wallet (different types of items are bought thru different channels) |
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prerequisites for a retailer to go multi-channel
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1. develop assortments/ manage inventory
2. manage people remotely 3. efficient distribution 4. presentation of merch 5. ability to process electronically 6. fulfillment and returns (must arrive on-time) 7. seamless integration using info systems |
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Steps in the Buying Process:
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1. need recognition
2. information search 3. evaluation of alternatives 4. purchasing merchandise 5. post-purchase behavior |
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Types of Buying decisions
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1. Extended
2. limited & impulse 3. habitual |
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market segment:
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group of people w/ similar needs
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criteria for a market segment to be real:
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1. actionable
2. identifiable 3. reachable 4. substantial |
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approaches when segmenting:
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1. geographic
2. demographic 3. lifestyle/ psychograhically |
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Retail strategy:
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statement that identifies:
1. target market 2. retail format 3. sustainable competitive advantage |
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Retail format (def and list):
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aka retail mix:
1. item 2. price 3. advertising 4. store design 5. visual merchandising 6. store location |
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sustainable competitive advantage (list ways to do it):
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1. customer loyalty
2. location 3. human resource management 4. distribution and information systems 5. unique merchandise 6. vendor relations 7. customer service |
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Growth Strategy- market penetration
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existing format, existing customers
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Growth Strategy- Market Expansion
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existing format, new customers
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Growth Strategy- retail format development
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new format, existing customers
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Growth Strategy- diversification
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new format, new customers
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Mission statement:
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broad description of a retailer's objectives and the scope of activities it plans to undertake
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situation audit:
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analysis of opportunities and threats in the retail environment and strengths and weaknesses relative to competitors
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scale economies
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cost advantages due to a retailer's size
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bargaining power of vendors:
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if only a few vendors (suppliers), they can controll price
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competitive rivalry:
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how often and how much retailers react to moves by competitors
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net sales:
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gross sales + promotional allowances - customer returns
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promotional allowances
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money paid by vendors to retailers so the retailers will promote the vendor's goods
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gross margin:
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same as gross profit
net sales - COGS |
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gross profit
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same as gross margin
net sales - COGS |
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operating expenses:
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selling, general and administrative expenses
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net profit:
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gross margin - operating expenses - net interest - taxes
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assets:
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economic resources
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input measures:
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resources allocated by a retailer to achieve outputs
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Output measures:
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assess the results of a retailer's investment decisions
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productivity measure
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ratios of outputs to inputs
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Return on assets (ROA)
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net profit margin x asset turnover
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