Chapter 1

Introduction to the World of Retailing

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
What is Retailing?

Retailing – a set of business

activities that adds value to
the products and services
sold to consumers for their
personal or family use

A retailer is a business that

sells products and/or
services to consumers for
personal or family use.

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How Retailers Add Value

■ Provide Assortment
Buy other products
at the same time
■ Break Bulk
Buy it in quantities
customers want
■ Hold Inventory
Buy it at a
convenient place
when you want it
■ Offer Services
See it before you
buy; get credit;
layaway
Ryan McVay/Getty Images

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 How Retailers Add Value

The value of the product and service

ncreases as the retailer performs functions.
Bicycle can be
bought on credit or
put on layaway

Bicycle is featured
on floor display

Bicycle is offered in
convenient locations
in quantities of one
Bicycle is
developed in
several styles
Bicycle is developed
at manufacturer
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Examples: How Retailers Add Values

 BagBorrowerSteal.com
 jewelry and bag rental; Get (not buy, but borrow) exactly what you
want
 Home Depot
 DIYer (Do-it-yourselfer); Learn how to do it yourself with in-store
clinics and online workshops

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World’s 20 Largest Retailers in 2005

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 Nature of Retail Industry is Changing

To Today’s Retailer

Mom and Pop Store

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Target’s Retail Mix

Customer Service Location

Store Design Merchandise

Retail Strategy Assortment
and Display

Communication Mix Pricing

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 Target’s Retail Mix

Location Strategy

Free-standing Stores

Customer Service

Store Display
And Design Merchandise
Assortment

Communication Mix
Pricing

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Target’s Retail Mix

Assortment Strategy

Customer Service
Location

Store Design
Large Number of Categories
and Display
Private Labels
Few Items in Each Category
Communication Mix
Pricing

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Target’s Retail Mix

Pricing Strategy
Location

Customer Service
Merchandise Assortment

Store Design
and Display

Communication Mix

Low to Modest

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 Target’s Retail Mix

Customer Service
Location

Communication Mix Store Design

And Display
Merchandise Assortment

Pricing

TV and Newspaper
Insert Ads

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Target’s Retail Mix

Store Design and Display

Customer Service Location

Colorful, wide aisles displays

Merchandise Assortments
for products with a grid layout

Communication Mix Pricing

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Target’s Retail Mix

Customer Service

Limited

Location

Merchandise Assortment

Store Design and Display

Pricing

Communication Mix

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