RETAILING

CHAPTER 8
CLASSIFYING RETAILERS

Explain the dimensions by

which retailers can
be classified
CLASSIFICATION OF RETAIL
OPERATIONS

Ownership

Level of Service

Product Assortment

Price
CLASSIFICATION OF OWNERSHIP

Owned by a single person or

Independent
Retailers
partnership and not part of a larger
retail institution

Owned and operated as a group by a

Chain Stores
single organization

The right to operate a business or sell a

Franchises
product
 LEVEL OF SERVICE

Self Service Full Service

Factory outlets Discount stores Exclusive stores

Warehouse clubs
 TYPES OF STORES AND THEIR
CHARACTERISTICS

Type of Retailer Service Assort- Gross

Price
Level ment Margin
Department Store Mod Hi-High Broad Mod-High Mod High
Specialty Store High Narrow Mod-High High
Supermarket Low Broad Moderate Low
Med-Narro Mod High
Convenience Store Low Mod High
w
Drugstore Low-Mod Medium Moderate Low
Full-line Discounter Mod-Low Med-Broad Mod Low Mod Low
Specialty Discounter Mod-Low Med-Broad Mod Lo-low Mod Low
Low-very
Warehouse Clubs Low Broad Low
low
Med-Narro
Off-price Retailer Low Low Low
w
Restaurant Low-High Narrow Low-High Low-High
 PRICE

Gross
The amount of money the
Margin retailer makes as a percentage
of sales after the cost of goods
sold is subtracted.
MAJOR TYPES OF RETAIL
OPERATIONS

Describe the major types

of retail operations
MAJOR TYPES OF RETAIL
OPERATIONS

Department Stores

Specialty Stores

Supermarkets

Drugstores

Convenience Stores

Discount Stores

Restaurants
 CATEGORIES OF
DISCOUNT STORES

Full-Line
Discounters

Specialty Discount Stores

Warehouse
Clubs

Off-Price
Discount Retailers
 DISCOUNT STORES

Mass
Retailing strategy using
Merchandising moderate to low prices on
large quantities of
merchandise and lower
service to stimulate high
turnover of products.
 DISCOUNT STORES

Retail store combining

groceries and general
Supercenter
merchandise goods
with a wide range of services.

Smaller stores emphasizing

Extreme-value
daily necessities at
Retailing
rock-bottom prices.
SPECIALTY DISCOUNT STORES

Category
Killers Specialty discount stores that
heavily dominate their
narrow merchandise
segment.
 REVIEW LEARNING OUTCOME
TYPES OF RETAIL OPERATIONS

Department Specialty Supermarke Convenience Discount

Drugstores Restaurants
Stores Stores t Stores Stores

supercenter
Full-line
extreme-
value
Scrambled
Merchandising Specialt category
y killer

Wareho
use

Off-pric factory
e outlet
NON-STORE RETAILING

Discuss non-store
retailing techniques
NON-STORE RETAILING

Automatic Vending

Direct Retailing

Direct Marketing

Electronic Retailing
DIRECT RETAILING

Door-to-Door

Office-to-Office

Home Sales
Parties
 TYPES OF DIRECT MARKETING

Direct Mail

Catalogs & Mail Order

Telemarketing

Electronic Retailing Shop-at-home networks

On-line retailing
REVIEW LEARNING OUTCOME
NON-STORE RETAILING TECHNIQUES

Nonstore Retailing

Vending

Direct retailing

direct mail
Direct marketing catalogs
telemarketing

online
Electronic retailing
shop at home
FRANCHISING

Define franchising and

describe its
two basic forms
BASIC FORMS OF
FRANCHISING

Product and Trade Name

Franchising

Business Format
Franchising
 FRANCHISING

Product and Dealer agrees to sell

Trade Name in products provided by a
Franchising manufacturer or wholesaler.

Business An ongoing business

Format relationship between a
Franchising franchiser and a franchisee.
LARGEST U.S. FRANCHISORS

McDonald’s
Southland
Subway
Burger King
KFC
Pizza Hut
RadioShack
Taco Bell
Dairy Queen
Hooter’s
Jason’s Deli
Marble Slab
Quiznos Sub

SOURCE: http://www.franchise.org, January 2006.

RETAIL MARKETING STRATEGY

List the major tasks involved

in developing
a retail marketing strategy
RETAIL MARKETING STRATEGY

Define & Select

a Target Market

Develop the
“Six Ps”
DEFINING A TARGET MARKET

Demographics

STEP 1:
Segment the Market Geographics

Psychographics
 CHOOSING THE RETAILING
MIX

Product Place

STEP 2:
Choose the Price Personnel
Retailing Mix

Promotion Presentation

http://www.publix.com
Online
 THE RETAILING MIX

Product

Personnel Place

Targe
t
Mark
et

Presentation Promotion

Price
CHOOSING THE RETAILING MIX

Product The mix of products offered to the

Offering
consumer by the retailer; also
called the product assortment or
merchandise mix.
 RETAIL PROMOTION STRATEGY

Advertising

Public Relations

Publicity

Sales Promotion
 THE PROPER LOCATION

Choosing a Community Choosing a Site

Economic growth potential Freestanding Store

Competition Shopping Center

Geography Mall
 IMPORTANT FACTORS FOR SITE
CHOICE

▪ Neighborhood
socioeconomics
▪ Traffic flows
▪ Land costs
▪ Zoning regulations
▪ Public transportation
▪ Site’s visibility, parking,
entrances and exits,
accessibility, and safety
▪ Fit with other stores
SHOPPING CENTER AND MALL
LOCATIONS

Advantages Disadvantages

▪ Expensive rent
Design attracts ▪ Failure of common
shoppers promotion efforts
Ample parking ▪ Lease restrictions
Unified image ▪ Hours of operation
Sharing of common ▪ Direct competitors
area expenses ▪ Consumer time limits
 RETAIL PRICES

Low Price High Price

Good Value Quality

Single Price Point Image
EDLP
PRESENTATION OF THE RETAIL
STORE

Atmosphere
The overall impression conveyed
by a store’s physical layout,
décor, and surroundings
PRESENTATION OF THE RETAIL STORE

Employee type and density

Merchandise type and density

Fixture type and density

Sound

Odors

Visual factors
PERSONNEL AND CUSTOMER
SERVICE

Trading Up
Two
Common
Selling
Techniques
Suggestion Selling
CUSTOMER SERVICE FOR ON-LINE
RETAILERS

Easy-to-use Web site

Product availability

Simple returns
REVIEW LEARNING OUTCOME
DEVELOPING A RETAIL MARKETING
STRATEGY
NEW DEVELOPMENTS IN RETAILING

Describe new developments

in retailing
 NEW DEVELOPMENTS IN RETAILING

Consumers are
Interactivity involved in the retail
experience.

Purchasing goods
M-commerce through mobile
devices.
TRENDS IN RETAILING

Describe trends
in retailing
TRENDS IN RETAILING

Entertainment

Convenience and Efficiency

Customer Management
THANK YOU…