Retail Marketing
3. Full-service-provide many services to customers
Reviewer: Chapter 1
Retailing- is a set business activities that adds value to
products which are sold to end users. If it is not the end user,
it is not retailing.<product/service>
Retailer- sells products/services for personal or family
use.<focused on satisfying the ultimate consumer>
Supply chain– set of firms that make and deliver goods/
services to consumer
Wholesalers- are engaged in handling goods with larger
quantities then reselling to smaller quantities <uniquely satisfy
retailer’s needs>
TYPES OF RETAILING:
1. Vertical integration- firm performs more than one
set of activity in supply chain
2. Backward integration- firm performs distribution
and manufacturing activities
3. Forward integration- manufacturing undertakes
retailing
RETAILERS CREATE VALUE: VALUE-
CREATING FUNCTIONS
1. Provide product assortment- display as many
products as possible, customers can choose from a
wide selection of brands/ designs <color/size/design>,
retailers can specialize in th assortment they offer.
2. Breaking Bulk- retailers offer products in smaller
quantities, tailored to the needs of the
consumers.<sold in every piece instead of pack (menudo)
ex. Napkin, cigarette>
3. Holding Inventory- keep inventory in user-friendly
sizes for consumers, reduce cost consumers would
have to pay to store products <ex. Meat, limited
storage>
4. Providing services- services for easy buy and use<ex.
credit card, testers>
LEVEL OF SERVICE
1. Self-service- customer performs function, non-
essential customer services are eliminated<meat
section in ICM>
2. Limited-service- customers are mostly responsible,
provides some services, salespeople are available
nearby
<free home delivery, valet parking, free gift wrapping>
TYPES OF MERCHANDISE LINE
1. Depth of merchandise- store carries large
assortment of each item , specialty outlets <world
balance MOA, Fixrite>
2. Breadth of merchandise- variety of different items a
store carries, general merchandise stores <Daiso
Japan,UNICITY>
 Scrambled merchandising- several
unrelated products in one store, , retailers
offer merchandise different from their type
of store
 Hypermarket-offer consumers almost
everything
NON-STORE RETAILING: 6 FORMS
1. Automatic Vending- 24/7 available, no staff
involved, sales are made to consumers without using
physical stores. <Nescafe, Coca-cola>
2. Direct Mail and Catalogs - firms mail letters,
brochures and even product samples to consumers,
and ask them to purchase by mail or
telephone.Catalog retailing - in which companies
mail catalogs to consumers.
3. Television Home Shopping-allows consumers to
shop for goods from the privacy of their own home .
<telephone ordering in response to advertisements>
4. Online Retailing-website offers products for sale and
then individuals use their computers to make
purchases, purchaser is an ultimate customer. <ex.
Amazon, Shopee>
5. Telemarketing- sales person initiating contact with a
shopper and closing a sale over the telephone. <ex.
Globe>
6. Direct Selling- home selling, personal contact of
seller and consumer away from a retail store
<ex.Brooms/brush by Fuller Brush Company, Avon
Cosmetics, Tupperware(door to door party plan)>
SOCIAL AND ECONOMIC SIGNIFICANCE OF
RETAILING
1. Social Responsibiliy; Corporate social responsibility,
actions taken to address ethical, social and
environmental impacts of business operations.
2. Retail sales- Retailing affects daily life
3. Employment- retailing provides jobs
4. Global retailers- international operations produce
larger sales.
FACTORS THAT CREATE DIFFERENCES IN III. Implementing Retail strategy:
SUPPLY CHAIN SYSTEMS Merchandise Management and Store Management
1. Social and political objectives
Retail mix- decision variables retailers use to satisfy customer
2. Geography
needs and influence their purchase
3. Market size
ELEMENTS OF A RETAIL MIX
OPPORTUNITIES IN RETAILING 1. Customer service
1. Management opportunities- employ people with 2. Store design and display
expertise and interests in finance, marketing, 3. Communication mix
accounting, human resource etc. 4. Pricing
2. Entrepreneurial Opportunities- for people who wish 5. Merchandise assortments
to start their business. 6. Location
 Jeff Bezos (Amazon.com)- First internet ETHICAL AND LEGAL CONSIDERATIONS
book retailer, amazon=river as an objective.
Ethics- principles governing the behaviour of individuals and
Greatest volume of internet sales.
companies to establish appropriate behaviour and indicate
 Anita Roddick(The Body Shop)-endorses what is right and wrong; what is ethical may vary from
only environmentally friendly products, country to country, industry to industry; punishable by legal
against animal-testing systems.
 Ingvar Kamprad (IKEA)-frugality; match-
selling, then extended his trade. Innovative Personal Code of Ethics- personal sense of what is right and
designs at affordable prices wrong

RETAIL MANAGEMENT DECISION PROCESS 6 TESTS OF ETHICAL ACTION

I. Understanding the world of retailing 1. Publicity Test
Critical environmental factors: 2. Moral Mentor Test
a) Macro environment -technology, consumer 3. Admired Observer Test
behaviour, demographic, social and ethical 4. Transparency Test
factors 5. Person in the Mirror Test
b) Microenvironment- competitors and 6. Golden Rule Test
costumers.<profile properly the consumers:
FIRMS POLICIES/REQUESTS ARE IMPROPER:
lifestyle,trends, needs are constantly changing >
<choices: either way, check the company if they are in conflict with
 Intratype competition .A retailers
your ethical principles>
primary competitor are retailers
with the same format. <department 1. Ignore your personal values and do what your
to department, bath and body to bath company asks you to do.
and body> 2. Take a stand and tell your employer what you think
 Intertype competition- retailers 3. Refuse to compromise your principles.
with similar merchandise different
formats. CAREER OPPORTUNITIES
II. Developing a Retail Strategy  Store Management
How the firm plans to focus its resources. It  Merchandise Management
identifies:  Corporate Staff
1. Target market  Management Information Systems (MIS)
2. Nature of the merchandise and services  Operations Distribution
3. How to build a long-term advantage over its  Marketing
competitors.  Loss Prevention
 Finance/Control
Key strategic decision areas: Target market, Financial
 Real Estate
Status, Location, Organizational and human resource,
 Store Design
Information systems, Supply chain organization, Customer
 Human Resource Management
Relationship Management