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RETAIL MANAGEMENT

(chapter 3 &4)

Chapter_3

I. Multichannel Retailing

Multichannel retailing is a business and marketing strategy that can help you sell products
via multiple sales channels. Modern customers expect increasing levels of flexibility and
access to products, so this strategy can be helpful for social media advertisers, salespeople,
accountants and website developers.
Multichannel retailing is a hybrid strategy that combines a variety of possibilities for
retailers. The goal of multichannel retailing is to use a variety of distribution channels
rather than just one. The underlying cause of this is the past decade’s confusion between
marketing and advertising. To be successful, multi-channeling requires a large amount of
reorganization and investment in both retailing and marketing techniques.

 Retailers that sell merchandise or services through more than one channel
 Retailers can leverage the unique benefits provided by each to attract and
satisfy more customers.

Store Channel

The pathway through which products and services flow from businesses to consumers. It
encompasses the various methods and locations where transactions occur, ranging from
physical stores to online platforms and even hybrid approaches that blend both in-person and
digital interactions.

Browsing

Shoppers often have only a general sense of what they want but don’t know the specific item
they want, so that they keep browsing any particular product and look for catalogs for ideas.
These hobbit or techniques is happened both in physical and online stores.

Touching and Feeling Products

Opportunity for customers to use all five of their senses


Touching
Smelling
Tasting
Seeing
Hearing
Personal Service

Sales associates still have the capability of providing meaningful, personalized information.
Provided by information of the products and give suggestion to the particular customers.

Cash Payment

Stores are the only channel that accept payment. Many customers prefer to pay with cash
because it is easy, resolves the transaction immediately, and does not result in potential
interest payments.

Entertainment and Social Experience

In store shopping can be a stimulating experience for some people. It provides a reality in
their daily routine and enabling them to interact with friends.

Immediate Gratification

Stores have the advantage of allowing customers to get the merchandise immediately after
they buy it. These is a way of direct solution for customer purchase and item or product they
immediately want or needed.

Risk Reduction

The store will be there to receive defective or unsuitable merchandise and issue you a credit
for it. Consumers do not have this same level of confidence when buying merchandise from
catalogs or through the internet.

Catalog Channel

Provides some benefits to customers that are not available from the store or Internet channels.

Convenience
Safety
Visual Presentation
Convenience

Consumers have the added convenience of not being restricted to a place with internet access
and a computer. They can look through a catalog on the beach or propped up in bed.

Safety

Security in malls and shopping areas is becoming an important concern for many shoppers,
particularly with the elderly.

Visual Presentation

The photographs of merchandise in catalogs, while not as useful as in store presentation, are
superior to the visual information that can be displayed on a CRT screen.

Internet Channel

Provides convenience and safety benefits offered by catalogs and other non-stores formats.
Has the potential to offer a greater selection of products and more personalized information
about products and services.
This channel offers retailers an opportunity to go beyond the traditional product information
available in stores to provide tools and information for solving customer problem and
concern.
Virtual communities, networks of people who seek information, products, and services and
communicate with one another about specific issues and function of a particular product.

Broad selection
Detailed problem-solving Information
Personalization

Broader Selection

One of the benefits of the internet channel, compared with the other two channels, is the vast
number of alternatives available to consumers. By shopping on the internet, consumers can
easily visit and select merchandise from broader array of retailers.

Detailed Problem- Solving Information

Provision of information to help customers make better purchase decisions. Customers can
format the information so they can effectively use it when evaluating products. Using this
Internet channel, retailers have the capability to provide as much information as each
customer wants and more information than they can get through store or catalog channels.
Personalization

The most significant potential benefit of the internet channel is tis ability to personalized the
information for each customer economically.

Personalized Customer Service


Personalized Offering
Personalization in the Future

Personalized Customer Service – Enables electronic retailers to automatically send a


proactive chat invitation to customers on the site.
Offering live, online chats, that provides customers
with the opportunity to click a button at any time and
have an instant messaging e-mail or voice
conversation with a customer service representative.

Personalized Offering – Provides an opportunity for retailers to personalized


their offerings for each of their customers.
Recommendation of complimentary merchandise.

Personalization in the Future –Benefits that will be available to consumers shopping


via the internet in the future. Access to more retailers
and deeper merchandise assortments.

BENEFITS PROVIDED BY DIFFERENT CHANNELS

Stores Catalogs Internet


Browsing Convenienc Broad Selection
e
Touching and Feeling Products Safety Detailed Problem-
Solving Information
Personal Service Visual Personalization
Presentatio
n
Cash Payment
Entertainment & Social Interaction
Immediate Gratification
Risk Reduction
II. Evolution Toward Multichannel Retailing

Traditional store-based and catalog retailers are placing more emphasis on their
electronic channels and evolving into multichannel retailers for four reasons.

1. Electronic channel gives them an opportunity to overcome the limitations of


primary existing format
2. Using electronic channel, retailers can reach out to new markets.
3. Providing a multichannel offering builds “share of wallet” or the percentage
of total purchase made by a customer.
4. Electronic channel enables retailers to gain valuable insights into their
customers shopping behavior.

Overcoming Limitations of an Existing Format

The amount of merchandise that can be displayed and offered for sale in store is limited by
blending stores with internet that retailers can dramatically expand the assortment offered to
their customer. Limitation that store-based retailers face is inconsistent execution.

Expanding Market Presence

Adding an electronic channel is particularly attractive to firms with strong brand attractive to
firms with strong brand names but limited locations and distribution.

STORE

CATALOG WEBSITE

Increasing Share of Wallet

Although offering and electronic channel may lead to some cannibalization, using it
synergistically with other channels can result in consumers making more purchases from
retailer.

Insights into Customer Shopping Behavior

An electronic channel can provide valuable insights into how and why customers shop and are
dissatisfied or satisfied with the experience. Offers the opportunity to collect more detailed
information about customer preferences.

III. Capabilities Needed for Multichannel Retailing

1. Developing assortments and managing inventory


2. Managing employees in distant locations
3. Distributing merchandise efficiently from distribution centers to stores
4. Catalogs
5. Web sites
6. Processing orders electronically
7. Efficiently distributing individual orders to homes
8. Operating communications and information sustems

IV. Issues in Multichannel Retailing

1. Integrated Shopping Experience


2. Brand Image
3. Merchandise Assortments
4. Pricing
 RETAILING VS. MULTICHANNEL RETAILING
Integrated Shopping Experience
 IMPORTANCE AND CONTRIBUTION OF
UTILIZING MULTICHANNEL
Many retailers are finding it easier to offer integration one step at a time rather than trying to
link everything from the start, which could be financially and technologically daunting for
 Bof
them and alienate consumers ENEFITS IN ADOPTING
things don’t go well. A MULTICHANNEL
STRATEGY

Brand Image  THREE BASIC CHANNELS AND SKILLS


NEEDED TO REALIZE BENEFITS OF
Multichannel retailers need to project the same image to their customers across all channels.
MULTICHANNEL RETAILING
Customers enter the Web sites through an image of the red doors used in its stores and are
greeted by the phrase “Always classic, never closed.”
 ISSUE IN MULTICHANNEL RETAILING

Merchandise Assortments

Customers expect that everything they seen in a retailer’s store will also be available on its
Website. Many multichannel retailers have tailored the assortments sold on their website to
include only products their customers are likely to busy over the internet.

Pricing

Represents another difficult decision for a multichannel retailer. Retailers need to adjust their
pricing strategy because of the competition they face in different channels. Multichannel
retailers are beginning to offer new types of pricing, like auction, that take advantage of the
unique properties of the internet.

V. SUMMARY
Chapter_4

I. Customer Buying Behavior

This chapter focuses on the needs and buying behavior of customers and groups of
customers, or market segments. This describes the stages customers go through to purchase
merchandise and the factors that influence the buying process, as well as to use and dispose
of purchased goods or services.

SELECTING A SELECTING
STAGES RETAILER AND MERCHANDISE
CHANNEL

Recognize needs Recognize needs


Need Recognition

Search for Search for


Information about information about
Information Search retailers merchandise

Evaluate retailers Evaluate


Evaluation and channels merchandise

Select a retailer Select merchandise


and channel
Choice

Visit store or Purchase


Visit internet site merchandise
catalog

Repeat patronage Post-purchase


Loyalty of retailer evaluation
II. The Buying Process
The steps consume go through when buying a product or service, begins when customers
recognize and unsatisfied need

Need Recognition

Is a buying process is triggered when consumers recognize they have an unsatisfied need.
This are the types of needs:

Utilitarian Needs – When consumers go shopping to accomplish a


specific task.

Hedonic Needs – When consumer go shopping for pleasure.

III. Internet, Information Search, and Price Competition


The internet has had a profound impact on customer’s ability to gather external information.
IV. Evaluation of Alternatives: The Multiattribute Model
Customers see a retailer, product, or service as a collection of attributes or characteristics.
Predict a customer’s evaluation of a retailer, product, or service based on;
 Its performance on relevant attributes.
 The importance of those attributes to the customer.

Getting into the Consideration Set

Consideration Set

The set of alternatives the customer evaluates when selecting.


Retailers develop programs influencing top-of-mind awareness.

V. Purchasing Merchandise or Services

Customers do not always purchase a brand with the highest overall evaluation.
The high-rated item may not be available in the store.

Post-purchase Evaluation

Satisfaction

A post-consumption evaluation of how well a store or product meets or exceeds customer


expectations.
Becomes part of the customers internal information that affects future store and product
decisions.
Builds store and brand loyalty.

VI. Types of Buying Decisions

 Extended Problem Solving – High financial or social risk


 Limited Problem Solving – Some prior buying experience
 Habitual Decision Making – Store brand, loyalty
Habitual Decision Making

Brand Loyalty

 Committed to a specific brand


 Reluctant to switch to a different brand
 May switch retailers to buy brand

Store Loyalty

 Committed to a specific retailer


 Reluctant to switch retailers

VII. Social Factors Influencing the Buying Decision Process


VIII. Market Segmentation

Retail Market Segment

Is a group of customers whose needs are satisfied by the same retail mix because they have
similar needs.

Demographic segmentation

Group of consumers on the basis of easily measured, objective characteristics such as age,
gender, income, and education.

Geodemographic segmentation

Uses both geographic and demographic characteristics to classify consumers.

IX. Approaches for Segmenting Markets

Lifestyle, or Psychographics

Refers to how people live, how they spend their time and money, what activities they pursue,
and their attitudes and opinions about the world in which they live.

Buying Situations

Can influence customers with the same demographics or lifestyle.

Benefit Segmentation

Groups of customers seeking for similar benefits.

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