THE VALUE OF RETAILING
Retailing
Retailing includes all activities involved in
Selling and providing goods and
services to ultimate consumers for personal,
or household use.
Classificationof
Retail Establishments
Ownership-place
Level of Service-promotion
Product Assortment-product
Price
Retailers manipulate their 4 P’s to get the best position in the
marketplace– in other words, to create a competitive advantage
CLASSIFYING RETAIL OUTLETS
IndependentRetailers-one store
ownership
Chain Stores-many stores but only one
owner
Franchises-many owners of many
stores
CLASSIFICATION BY OWNERSHIP
Product and
Trade Name
Franchising
Business
Format
Franchising
Dealer agrees to sell certain
products provided by a
manufacturer, but can use any sales
tactics he chooses.
Ex-Michelin Tires, Avon
Dealer must sell the franchiser’s
product in the exact way the
franchiser prescribes.
Ex – McDonalds, Wendy's
BASIC FORMS OF FRANCHISING
Full ServiceFull ServiceSelf ServiceSelf Service
Discount storesDiscount stores
Exclusive storesExclusive storesFactory outletsWarehouse clubsFactory outletsWarehouse clubs
CLASSIFICATION BY LEVEL OF
SERVICE
The mix of products offered to the
consumer by the retailer; also called
the product assortment
Deep & narrow-like Starbucks
Or
Shallow & broad like Walmart
CLASSIFICATION BY PRODUCT
OFFERING
CLASSIFICATION BY PRODUCT
OFFERING
� Depth of Product Line
• Specialty Outlets
• Category Killers
� Breadth of Product Line
• General Merchandise Stores
• Scrambled Merchandising
Why do this?
Department Stores
Specialty Stores
Supermarkets
Drugstores
Convenience Stores
Discount Stores
Restaurants
MAJOR TYPES OF RETAILERS BY
PRODUCT OFFERING
Major Formsof
NonstoreRetailing
Automatic Vending
Direct Marketing
Electronic Retailing
NON-STORE RETAILING
Telemarketing
Catalogs & Mail Order
Direct Mail
DirectMarketing needs
no personal interaction
DirectMarketing needs
no personal interaction
DIRECT MARKETING
Choosing the Retailing Mix
Product
Price
Promotion
Place
Personnel
Presentation
CHOOSING THE RETAIL MIX
Employee Type & Density
Merchandise Type & Density
Fixture Type & Density
Sound
Odors
Visual Factors
Factors in
CreatingStore’s
Atmosphere
PRESENTATION (COMMUNICATION) OF
THE RETAIL STORE
How many
How knowledgeable
How helpful / invasive
Fit the image of the product
Good personal sellers
Factors in
Personnel decisions
PERSONNEL OF THE RETAIL STORE
RETAILING STRATEGY-PRICING
� Use Everyday Low Pricing
� Benchmark or Signpost Items –
items used by consumers as an index
of overall price level of the store
I.e. – “How much do they sell T shirts for?”
� Allow for Shrinkage and discounting
OR
� How much mark-up?
RETAILING STRATEGY - LOCATION
� Central Business District
� Regional Shopping Centers
� Strip Location
� Multichannel Retailers
• Anchor Stores
Freestanding Store
Shopping Center Tenant
Mall Tenant
• Parasites
• Destination stores
• Power centers
Scrambled Merchandising
Scrambled merchandising involves
offering several unrelated product lines in
a single store.
Retailing Mix
The retailing mix includes the activities
related to managing the store and the
merchandise in the store, which includes
retail pricing, store location, retail
communication, and merchandise.
Multichannel Retailers
Multichannel retailers utilize and
integrate a combination of traditional
store formats and nonstore formats such
as catalogs, television, and online
retailing.
Retail Life Cycle
The retail life cycle is the process of
growth and decline that retail outlets, like
products, experience, which consists of
the early growth, accelerated
development, maturity, and decline
stages.
Parasites
Parasite stores do not create their own
traffic. They make money based on
their proximity to things that will draw
foot traffic. (bigger stores, train
stations, airports, office buildings, etc.)
Destination Stores
Stores that generate customers from larger
trading areas than their neighbors or
competitors.
i.e.-Dunkin’ Donuts: “It’s worth the trip!”