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38 Cards in this Set
- Front
- Back
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retailing
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a set of business activities that adds value to products/services
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vertical integration
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when a firm takes onto itself the ability of one or more parts of the distribution channel
*do this to become more efficient and lower costs |
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backward integration
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when retailers start to manufacture or distribute outwards
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forward integration
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when manufacturers start retailing or wholesaling (ralph lauren)
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how do retailers add value
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providing assortments-having all products in one store
break in bulk- giving customers the amount of the good they want storage- hand in hand with break in bulk, giving them the ability to easily store stuff services- services while shopping, on products (warranty, try it before you buy, geek squad) |
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retailing in the us
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most retailers per sq mile
large enough companies to get rid of wholesaler middle man. makes dist. channel very effective retailers have most of the power and there is a lot of competition (both make distr channel max efficient) |
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retail strategy
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Identify competition (intra vs inter)
identify customers (significant demographic lifestyle and trends) -should include target mkt, prdct and service mix, and longterm comparative advantage |
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marketing retailing mix
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location
assortment communication store design+ display service |
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variety
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wide vs narrow
how many categories you have |
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assortment
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deep vs shallow
how much of a given category you carry |
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net profit margin percentage
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net profit/net sales
tells us the profit generated by $1 of sales |
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net sales
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net sales/net assets
assesses the productivity or our investments in assets |
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net profit overall
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net sales/total assets
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Inventory turnover for cost
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COGS/average inventory
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inventory turnover for retail
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total sales/avg inventory
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influences on buying decision
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family influences
purchases are for the entire family whole family participates in making decision retailers influence to satisfy all members of the family |
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stages of buying process
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recognition of needs ->information search -> evaluate merchandise -> select merchandise -> postpurchase evaluation
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disintermediation
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cutting out the middle man
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keys to global success
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Global comparative advantages:
low cost, efficient operations, strong private labels, fashion reputation,category dominance adaptability, global culture, financial resources. |
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4 oppertunities to pursue global growth
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market penetration- attract customers from target market (duh) and get them to visit more.
market expansion- same format, new target mkt retail format development-new retail format with different retail mix with SAME target market diversification- new retail format to new segment 1) related diversification- same manufacturer, shipping (something is the same) 2) unrelated diversification- nothing is the same HIGH RISK and is indicative of vertical integration |
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sustainable comparable advantages
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location, customer loyalty, customer service, exclusive merchandise, low cost supply chain, information systems, committed employees
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less sustainable comparative advantages
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better computers, more employees, more merchandise, greater assortments, lower prices, more ads/promotions, more stores
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why did e-stores fail
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good skills with tech and order management
lacked knowledge in: building brand image, building consumer trust, manage inventory, fulfill small inventories, building multichannel retailers (lacked resources) |
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store benefits
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better browsing
touching and feeling (min risk) face to face service pay in cash (not just cc) entertainment for some (social interaction) immediate gratification (get it now) |
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catalogue benefits
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convenenient
information at hand safe |
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types of purchase decision
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extended problem solving
limited problem solving habitual problem solving customer loyalty |
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extended problem solving
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high risks involved (social, financial, physical)
influences: use sales people instead of ads need alot of info (reviews too) reduce risks with offerings (guarentees, warrantees etc) |
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limited problem solving
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majority of all decsion making
happens when customer has prior experience with product (colgate) and rely on personal knowledge of product how to influence: comes to you)create positive buying experience, customer satisfaction, good assortments, loyalty rewards going to competitor) more convenient locations, offer better services, assortment |
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habitual probelem solving
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purchases not too important for consumer, usually to brand name or store.
*must have the assortment though how to influence: coming to you)keep product in stock, good service, loyalty rewards going to competitoin) promotions |
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issues with service retail
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intangible so it is hard to evaluate the service
simulatenous production/delivery no inventory- must fill capacity (why they overbook cable companies) inconsistent offering- depends on what person does it. place high importance on HR manager |
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retail strategy why its more important
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more important today
new competitor (netflix, blockbuster) new formats (redbox, downloading) new technologies shifts in consumer needs |
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elements of retail strategy
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target market
retail format- the nature of the retailers sustainable comparitve advantage |
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franchises
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30-40% of retail sales
franchisee pays flat fee+% of sales benefits: access to financial info, start up costs reduced, risks reduced, promo material available, employee training, mkt data, group insurance |
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cross selling (def)
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sales associates in one department refer customer to another dept
shoe department refers to golf dept for new clubs to go with new golf shoe |
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multiattribute model
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consumers view the store/product/services as a bunch of characteristics (quick, good deals, high end etc)
but are these characteristics important to the customers right now and if so, to what extent |
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predict a customers' evaluation of a retailer/prodct/service based on
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how well it performs relative to how important the characterists are.
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characterisitics needed to use multiattribute model
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competition, performance and attributes wanted, rating of attributes, how important the attributes are
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how to enhance products sales on internet
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attributes that can be seen, none that need touching and feelilng
if they have usable information to predict satisfaction better presentation of touch and feel branding |
