 https://www.youtube.com/watch?

v=EenD0iTwv8Y

Chapter 13 Copyright ©2009 Cengage Learning Inc. All rights reserved 1

 Retailing

Retailing
All the activities directly
related to the sale of goods
and services to the ultimate
consumer for personal,
non-business use.

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 Classification of Retail Operations

Ownership

Level of Service

Product Assortment

Price

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 Classification of Ownership

Independent Owned by a single person or

partnership and not part of a
Retailers larger retail institution

Owned and operated as a group

Chain Stores by a single organization

The right to operate a business

Franchises or sell a product

LO2
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 Level of Service

Self Service Full Service

Factory outlets Discount stores Exclusive stores

Warehouse clubs

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 Product Assortment
The third basis for positioning or classifying stores is by
breadth and depth of their product line, specialty stores-
for example , titan EYE +, Planet M or Goderej Interio –
have the most concentrated product assortments, usually
carrying single or narrow product lines but with
considerable depth.

Other retailers, such as factory outlet stores, may carry

only part of a single line. Nike stores sell only certain
items of its own brand. Discount specialty stores like E-
zone carry a broad assortment in concentrated product
lines, such as consumer durables.

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 Price

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

LO2
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LO3 Major Types of Retail Operations

Department Stores

Specialty Stores

Supermarkets
Hypermarkets
Drugstores
Superstores
Convenience Stores

Discount Stores

Restaurants
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 Department Stores

 Carries wide variety of shopping and specialty goods,

including apparel, cosmetics, footwear, accessories,
housewares and sometimes furniture.
 A department store is quite large in size with average
area varying from 25,000 to 40,000 sq.ft and between
50,000 to 1,00,000 stock keeping units. (SKUs).
 SKU refers to each and every item of inventory that is
uniquely identifiable.
 Each deparment is usually headed by a buyer a
department head who not only selects merchandise and
may also responsible for promotion and personnel.
 For ex- shopper’s stop, Westside, lifestyle, Globus and pantaloons

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 Specialty Stores

 Formats allow retailers to refine their

segmentation strategies and tailor their
merchandise to specific target markets.
 More customer service.
 Tanishq, Lilliput,Mom & ME

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 Supermarkets

 Are large departmentalized self-service retailers

that specialize in food and some non-food items.
 A conventional supermarket carries 5,000 to
10,000 SKUs.
 A supermarket not only carries national and local
brands but also keeps its own private labels.
 For ex. - Reliance one, Club more

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 Hypermarkets

 Are combination of a supermarket and

department stores
 The store carry a vast merchandise mix with
product categories like apparel, house wares,
consumer durables, sports equipment,
cosmetics, FMCG products and fresh fruits and
vegetables
 Area range lies between 50,000 to 1,00,000 sq.ft.
 For ex- spencer’s hyper, more megastore, easy
day, hyper city and Reliance mart.

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 Superstores
 In the developed market like the US, conventional
supermarkets are being replaced by bigger superstores
meet the needs of today’s customers for convenience,
variety and service by offering one-stop shopping for
many food and non-food needs, as well as many
services including
– Pharmacies, flower shops, salad bars, in-store
bakeries, take out food sections, sit down
restaurants, health food sections, video rentals, dry
cleaning, shoe repair, photo processing and banking.
– This tendency to offer a wide variety of non-
traditional goods and services under one roof is
called Scrambled merchandising.

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 Drugstores

 Drugstores stock pharmacy-related products and

services as their main draw., but they also carry a
substantial selection over-the-counter medicines,
cosmetics,, health and beauty aids, seasonal
merchandise.
 In order to remain competitive, they have also
added services such as 24-hour drive through
pharmacies and low-cost health clinics staffed by
nurse practitioners.
 For ex. Planet health , 98.4 in Delhi

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 Convenience Stores

 Can be defines as a mainiature supermarket,

carrying only a limited line of high turnover
convenience goods. These self-service stores are
typically located near residential areas and are
open for long hours, seven days a week.
 Such stores offer exactly what their name
implies: convenient location, longer operating
hours and fast service.
 For ex- kirana stores
 Prices are high in compare to a supermarkets.

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LO3 Categories of Discount Stores

Full-Line
Discounters

Specialty Discount
Stores

Warehouse
Clubs

Off-Price
Discount Retailers

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LO3 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.

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LO3 Discount Stores

Retail store combining

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

Retailer offering consumers

very limited service and
Full-line discounter carrying a broad assortment of
well-known, nationally branded
“hard goods”.

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LO3 Specialty Discount Stores

Category
Killers

Specialty discount
stores that heavily
dominate their narrow
merchandise segment.

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LO3 REVIEW LEARNING OUTCOME

Types of Retail Operations

Department Specialty Convenience Discount
Supermarket Drugstores Restaurants
Stores Stores Stores Stores

supercenter
Full-line
extreme-
value
Scrambled
Merchandising category
Specialty
killer

Warehouse

factory
Off-price
outlet

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 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
Convenience Store Low Med-Narrow Mod High Mod High
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
Warehouse Clubs Low Broad Low-very low Low
Off-price Retailer
LO2 Low Med-Narrow Low Low
Restaurant Low-High Narrow Low-High Low-High
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 Nonstore Retailing

Kiosks

Automatic vending

Direct Retailing

Direct Marketing

LO4 Electronic Retailing

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 A kiosk is a freestanding computer terminal that
provides access to information. Vending
machines are automated self-service machines
that dispense items such as snacks, beverages
etc.

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 Direct Retailing

Door-to-Door

Office-to-Office

Home Sales Parties

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 Types of Direct Marketing

Direct Mail

Catalogs & Mail Order

Telemarketing
Shop-at-home networks
Online retailing

Electronic Retailing

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LO5 Basic Forms of Franchising

Product and Trade Name

Franchising

Business Format
Franchising

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LO5 Franchising

Product and Dealer agrees to sell in

Trade Name products provided by a
Franchising manufacturer or wholesaler.

Business An ongoing business

Format relationship between a
Franchising franchiser and a franchisee.

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 Retail Marketing Strategy

Define & Select

a Target Market

Develop the
“Six Ps”

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 Defining a Target Market

Demographics

STEP 1:
Geographics
Segment the Market

Psychographics

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 Choosing the Retailing Mix

Product Place

STEP 2:
Choose the Price Personnel
Retailing Mix

Promotion Presentation

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 The Retailing Mix
Product

Personnel Place

Target
Market

Presentation Promotion

Price
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 Choosing the Retailing Mix

Product The mix of products offered to

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

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 Retail Promotion Strategy

Advertising

Public Relations

Publicity

Sales Promotion

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 The Proper Location
Choosing a Community Choosing a Site

Economic growth Freestanding Store

potential

Competition Shopping Center

Geography Mall

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 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
LO6
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 Shopping Center and
Mall Locations
Advantages Disadvantages

 Design attracts  Expensive leases

shoppers
 Failure of common
 Activities and anchor
promotion efforts
stores draw customers
 Ample parking  Lease restrictions
 Unified image  Hours of operation
 Sharing of common  Anchor store
area expenses domination
 Direct competitors
 Consumer time limits

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 Retail Prices

Low Price High Price

Good Value Quality

Single Price Point Image
EDLP

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 Presentation of the
Retail Store

Atmosphere The overall impression

conveyed by a store’s
physical layout, décor, and
surroundings

LO6
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 Presentation of the
Retail Store
Employee type and density

Merchandise type and density

Fixture type and density

Sound

Odors

Visual factors
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 Customer Service for
On-Line Retailers

Easy-to-use Web site

Product availability

Simple returns

LO6
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LO6 REVIEW LEARNING OUTCOME

Developing
a Retail
Marketing
Strategy

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 New Developments in Retailing

Consumers are
Interactivity involved in the
retail experience.

Purchasing goods
M-commerce through mobile
devices.

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