Chapter:1

Introduction of the world of retailing

***Retailers’ role in supply chain

1. retailers create value:
i. providing assortment of products and services
ii. breaking bulk
iii. holding inventory
iv. providing services
2. cost of channel activities
3. retailers performing wholesalers and production activities.

***Social and economic significance of retailing

1. Role in developed economies
2. Corporate social responsibility
3. Role in developing economies

***The growing importance of retailing and retailers

1. evolution of the retail industry: From traditional stores to internet based handheld device
2. Role of information system: targeting customer and customizing

***Management and entrepreneurial opportunities

1. Management Opportunities
2. Entrepreneurial opportunities

***The Retail Management decision process:

1. Understanding the world of retailing: competitors, customers
2. Developing retailing strategy: Target market, nature of merchandise and competitive
advantage.
3. Implementing retail strategy: retail mix.

Chapter 2
Types of Retailers

Retail Characteristics:
4 elements of retail mix are particularly useful for classifying retailers:
1. types of merchandise/service offered
2. variety and assortment
3. level of customer service
4. price of merchandise

Food retailers:
Characteristics of food retailers are in page 42
1. Supermarkets: self-service retail food store with noon food items: health and beauty aids,fresh
merchandise, green merchandise, ethnic merchandise, private label merchandise.
2. Supercenters: large stores combining supermarket with full line discount stores, one stop
shopping services.
3. Warehouse Clubs: offer limited and irregular assortment of foods and general merchandise at
lower price.
4. Convenient stores: limited variety and assortments, convenient location, speedy checkout: 7
eleven

General merchandise retailers: Characteristics are given in page 48

1. Department stores: distinct department, broad variety and assortments, offer customer service
2. Full line discount stores: broad variety of merchandise, limited service, low price: Walmart
3. Category specialist: of narrow but deep assortments of price.
4. Specialty stores: concentrate on limited number of complementary merchandise and provide
high level of services: H&M, body shop, Apple
5. Drug stores: specialty stores concentrate on health and beauty care.
6. Extreme value retailers: small discount stores that offer broad variety but low assortment of
household goods , health and beauty care and groceries.
7. Off price retailers: offers inconsistent assortment of brand name merchandise at a significant
discount off the manufacturers suggested retail price.

Difference between service and merchandise retailers:

1. Intangibility
2. Simultaneous production and consumption
3. Perishability
4. Inconsistency.

Major classification of retail ownership:

1. Independent and single store establishment
2. corporate retail chains
3. franchising
 Chapter 3
Multichannel Retailing

Non store retail channels:

1. Internet retail channel
2. Catalog channel
3.Direct response TV channel
4. Television home shopping channel
5. Direct selling channel
6. Automated retailing channel(vending machine)

Benefits of retail channels:

1. Store channel: touching and feeling products, personal service, risk reduction, immediate
gratification, entertainment and social experience, browsing, cash payment.
2. catalog channel: safety, convenience, easy of use.
3. internet channel: convenience, deeper and broader selection, more info, personalization,
improve shopping experience, perceived risk

Challenges facing multichannel retailers:

1. Multichannel supply chains and information system
2. Centralized vs decentralized multichannel retailing
3. consistent brand image across channel.
4. merchandise assortment
5. pricing
6. Reduction of channel migration
 Chapter 4
Customer buying behavior

Selecting a retailer and channel:

Recognize needs, search info about retailer, evaluate retailer and channel, select a retailer and
channel, visit store or non store, repeat patronage of retailer

Selecting merchandise:
Recognize needs, search info about merchandise, evaluate merchandise, select merchandise,
purchase merchandise, post purchase evaluation.

Types of buying decision:

1. extended problem solving: High time and effort, involves lot of financial, physical and social
risk.
2. Limited problem solving: moderate amount of effort and time.
3. Habitual decision making: involving little and no conscious effort.

Social factors influencing the buying factors:

1. economy
2. family
3. reference groups
4.culture

Criteria for evaluating market segment:

1. actionable
2. identifiable
3. substantial
4. Reachable

Approaches for segmenting markets:

1. geographic segmentation
2. demographic
3. geodemographic
4. lifestyle
5. buying situation
6. benefit
7. composite segmentation: combination of any above segment approaches.
 Chapter 5
Retail Market Strategy

Retail Strategy is identifying

1. retailers target market
2. format and resources the retailer plans to use to satisfy the target market needs.
3. the bases on which the retailer plans to build a sustainable competitive advantage.

Central concepts in a retail market strategy:

1. Target market and retail formate
2. Building sustainable competitive advantage

3 approaches to develop competitive advantage:

1. Building relationship with customer: brand image, positioning, unique merchandise, customer
service, CRM, building community in social media.
2. Relationship with supplier
3. Efficiency of internal operation: Human resource management, Distribution and info system,
Additional source of competitive advantage is location, multiple source of advantage.

Growth strategies:
1. Market penetration
2. Market Expansion
3. Retail Format development
4. Diversification

Global Growth oppotunites for retailer:

1. attractiveness of internation markets
2.keys to success is: competitive advantage, adaptability, global culture, financial resources

Entry strategy for global retailing

1. Direct investment
2. Joint venture
3. Strategic alliances
4. franchising

The strategic retail planning process:

1. Define the business mission: objectives, focus on target segments and retail format.
2. Conduct a SWOT analysis, External environment analysis
3. Identify strategic opportunities
4. Evaluate strategic opportunities
5. Establish specific objectives and allocate resources
6. Develop a retail mix to implement the strategy.
7. Evaluate performance and make adjustments.
 Chapter 7
Retail Locations

Types of location
2 basic types of location are:
1. unplanned location (free standing, urban sites and main street),
2. Planned location (Shopping centers)

Unplanned Locations
1. Free standing sites: convenience for customer, unconnected to other stores, high vehicular
traffic and visibility to attract customer, modest occupancy cost.
2. Urban Locations: urban areas in large cities offer three types of locations:
i. Central business distinct: Traditional downturn financial and business area
ii. Inner city: low-income residential area within a large city
iii. Gentrified residential sites: Renewal and rebuilding of offices, housing and retailers in
deteriorating cities.
3. Main Street: Traditional downtown shopping area in smaller towns and secondary shopping
areas in large cities and their suburbs.

Shopping Centers and planned Retail locations:

A shopping center is a group of retail and other commercial establishments that are planned,
developed, owned and managed as a single property.
1. Convenience, neighborhood and community shopping centers: open air stores with on site
parking usually located in front of stores.
2. Power centers: consist of full line discount stores, off-price stores, warehouse clubs and
category specialists.
3. Enclosed shopping malls: Enclosed, climate controlled and lighted shopping centers with retail
stores on one or both sides of an enclosed walkway.
4. Lifestyle Centers: Refers to the shopping centers that have an open air configuration of
specialty stores, entertainment and restaurants with design ambience and amenities such as
fountains and street furniture.
5. Mixed use developments: Combine several different uses into one complex including retail,
office, residential, hotel, recreation or other function
6. Outline centers: Contain manufacturers and retailers outlet stores.
7. Theme/ Festival centers.
8. Larger,multiformat developmets- omnicenters: combining enclosed malls, lifestyle centers,
and power centers.

Non-Traditional Locations:
1. Pop-up stores: focus on new products and limited group of products
2. Store within a store
3. merchandise kiosks
4. Airports

Shopping Behavior of consumers in retailer’s Target market:

1. Convenience shopping
2. Comparison shopping
3. Specialty shopping
 Chapter 8
Retail Site Location

Evaluating areas for locations and determining the number of stores in an area
1. Metropolitan statistical area.
2. Consideration in evaluating store location: Economic conditions, competition, strategic fit,
operating cost.
3. Number of stores in an area: economies of scale from multiple stores, cannibalization.

Considerations in evaluating store location:

1. site characteristics: traffic flow and accessibility,parking, visibility, adjacent teanents,
restrictions.
2. Trade area characteristics.
3. Estimating potential sales for a store site.

Steps of Evaluating several potential locations:

1. Conduct a competitive analysis
2. define present trade area.
3. analyze trade area characteristics
4. match characteristics of present trade area with potential sites.
 Chapter 18
Customer Service

Customer service approaches

1. Personalized service
2. Standardized service

Customer evaluations of service quality

1. Perceived service: reliability, assurance, tangibility, empathy, responsiveness.
2. Role of expectations

The gaps model for improving retail customer service quality

1. Knowledge gap: difference between customers expectation and retailers perception.
2. Standards gap: difference between the retailers knowledge of customers perception and
expectations and the service standards it sets.
3. delivery gap: Difference between retailers service standards and the actual service it provides
to customer.
4. communication gap: difference between the actual service provided to customer and the
service that retailer commits to provide.

Service recovery
1. listening to the customers
2. providing a fair solution
3. resolving problems quickly.
 Chapter 15
Retail Communication Mix

Successful retailers utilize IMC program in which they integrate a variety of communication
elements to deliver a comprehensive, consistent message to all customer over time, across all
their elements of their retail mix and across all delivery channels.

Traditional Media Elements:

1. Mass Media advertising:
i. Advertising
ii. Newspaper
iii. Magazines
iv. Direct mail
v. Television
vi. Radio
2. Sales Promotion
i. Coupons
ii. Rebates
iii. Premiums
3. In store marketing/design elements:
i. Point of purchase display
ii. Samples
iii. Special events
4. personal selling
5. public relations

New Media Elements:

1. Online media
 i. Websites
ii. Email
iii. Mobile communications

2. Social Media
i. Youtube
ii. Facebook
iii. Blogs
iv. Twitter

Communication programs build brand image and loyalty (only key words)
1. Brands
2. Brand image
3. Building brand equity
4. Brand awareness
5. Brand association

Planning the retail communication program:

1. Establish communication objectives
Objectives used by vendors and retailers differ
i. Long term vs short term
ii. Products vs location
iii. Breadth of merchandise
2. Establish budget: marginal analysis method, objective and task method, competitive parity
method, rule of thumb method.
3. Allocate budget: allocate to specific communication elements, merchandise category,
geographic region and long-short term objectives.
4. Implement and evaluate programs.
ROAI= (Net sales- Advertising cost)/advertising cost.
Chapter 11
Customer relationship management