You are on page 1of 27

Food Retailing Management and Technology – HTC610

Ali Mohamad Noor

Chapter Objectives
 To define retailing, consider it from different perspectives, demonstrate its impact, and note its special characteristics  To introduce the concept of strategic planning and apply it  To show why the retailing concept is the foundation of a successful business, with an emphasis on the total retail experience, customer service, and relationship retailing
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

publishing as Prentice Hall . or household use. 11e (c) 2010 Pearson Education. Inc. Retail Mgt.Retailing Retailing encompasses the business activities involved in selling goods and services to consumers for their personal. It includes every sale to the final consumer. family.

publishing as Prentice Hall . 11e (c) 2010 Pearson Education. Inc.Issues in Retailing How can we best serve our customers while earning a fair profit? How can we stand out in a highly competitive environment where consumers have so many choices? How can we grow our business while retaining a core of loyal customers? Retail Mgt.

. • A service may be the shopper’s primary purchase (haircuts) or it may be part of the shopper’s purchase of goods • Retailing may not have to involve a store – Mail / phone / direct selling / web transaction and vending machine fall within the scope of retailing.The Framework of Retailing • Retailing involves sale of tangible goods as well as services.

The Impact of Retailing on the Economy • Retailing is the major of world commerce • Retail – sales and employment are vital economic contribution. • Retail trends is mirror trends in a nation overall economy. • Retailing as a major source of job .

Manufacturers prefer to make one basic type of item and sell their entire inventory to a few buyers as possible. buy in large quantity. Adopted from Berman & Evans. Retailers collect assortment from various source.A Typical Channels of Distribution Manufacturer Wholesaler Retailer Final Consumer Retailing is the last stage in the channel of distribution. and sell in small amounts. This is called sorting process. and consumer. but consumers want to choose from a variety of goods and services and purchase a limited quantity. Retailer as a contact between manufacturers. wholesalers. 2004 .

The Retailer’s Role in the Sorting Process Manufacturer Brand A Wholesaler Manufacturer Brand B Brand A customer Brand B customer Manufacturer Brand C Wholesaler Manufacturer Brand D Retailer Brand C customer Brand D customer Brand E customer Manufacturer Brand E Wholesaler Manufacturer Brand F Adopted from Berman & Evans. 2004 Brand F customer .

publishing as Prentice Hall . Inc.Multi-Channel Retailing A retailer sells to consumers through multiple retail formats:  Web sites  Physical stores Retail Mgt. 11e (c) 2010 Pearson Education.

Relationship Management Among Retailers and Suppliers • Disagreements may occur in the following areas: control over channel profit allocation number of competing retailers product displays promotional support payment terms operating flexibility Retail Mgt. Inc. publishing as Prentice Hall . 11e (c) 2010 Pearson Education.

publishing as Prentice Hall . 11e (c) 2010 Pearson Education. designating such retailers as the only ones to carry certain brands or products within a specified geographic area • Intensive: suppliers sell through as many retailers as possible • Selective: suppliers sell through a moderate number of retailers Retail Mgt.Distribution Types • Exclusive: suppliers make agreements with one or few retailers. Inc.

11e (c) 2010 Pearson Education. publishing as Prentice Hall . Inc.Figure 1-7: Comparing Distribution Types Retail Mgt.

. • Channel relations tend to be smoothest with . manufacturers and wholesalers must be concerned about the caliber of display.Exclusive Distribution • Channel relations tend to be most volatile with Intensive Distribution • With Selective Distribution. customer service. store hours.The Relationships Among Retailers and Their Suppliers • Complex relationships – retailers are part of the distribution channel. retailers’ reliability as business partners etc. • Retailers and suppliers have different priorities. suppliers sell through a moderate number of retailers ( a combines aspects of exclusive and intensive distribution.

. even though mail. and Web sale have increased. phone. • Final consumers make many unplanned or impulse purchase • Retail consumers usually visit a store.The Special Characteristics of Retailing • The average amount of sales transaction for retailers is much less than for manufacturers.

The Special Characteristics Affecting Retailers Small average sale Impulse purchase Retailer’s strategy Popularity of sources Taken from Berman & Evans. 2004 .

11e (c) 2010 Pearson Education.Retail Strategy An overall plan for guiding a retail firm Influences the firm’s business activities Influences firm’s response to market forces Retail Mgt. Inc. publishing as Prentice Hall .

Inc. 6. 5. 11e (c) 2010 Pearson Education. Define the type of business Set long-run and short-run objectives Determine the customer market Devise an overall. 2. publishing as Prentice Hall . 4. 3.Six Steps in Strategic Planning 1. long-run plan Implement an integrated strategy Evaluate and correct Retail Mgt.

Inc. 11e (c) 2010 Pearson Education.Aspects of Target’s Strategy  Growth objectives  Appeal to a prime market  Distinctive image  Focus  Customer service  Multiple points of contact  Employee relations  Innovation  Commitment to technology  Community involvement  Monitoring performance Retail Mgt. publishing as Prentice Hall .

This means having prices appropriate to the level of products and customer service. whether it be upscale or discount. • Coordinated effort – the retailer integrates all plans and activities to maximize efficiency. • Goal orientation – retailer sets goals and then uses its strategy to attain them. .The Retailing Concept • Customer orientation – retailer determines the attributes and needs of its customers and endeavors to satisfy these needs to the fullest. • Value-driven – retailer offer good value to customer.

publishing as Prentice Hall . 11e (c) 2010 Pearson Education. Inc.Figure 1-10: Applying the Retailing Concept Customer Orientation Coordinated Effort Retailing Concept Value-driven Retail Strategy Goal Orientation Retail Mgt.

Issues that relate to retailer’s performance in term of the Retailing Concept • Total retail experience • Customer service • Relationship retailing .

11e (c) 2010 Pearson Education. publishing as Prentice Hall conjunction with the basic goods and services it sells.Customer Service Activities undertaken by a retailer in Store hours Parking Shopper-friendliness Credit acceptance Salespeople Retail Mgt. This includes: . Inc.

Inc. publishing as Prentice Hall . 11e (c) 2010 Pearson Education.Figure 1-12: A Customer Respect Checklist Do we trust our customers? Do we stand behind what we sell? Is keeping commitments to customers important to our company? Do we value customer time? Do we communicate with customers respectfully? Do we treat all customers with respect? Do we thank customers for their business? Do we respect employees? Retail Mgt.

rather than act as if each sales transaction is a completely new encounter – Concentrate on the total retail experience – Monitor satisfaction – Stay in touch with customers Retail Mgt.Relationship Retailing • Retailers seek to establish and maintain long-term bonds with customers. Inc. 11e (c) 2010 Pearson Education. publishing as Prentice Hall .

Effective Relationship Retailing • Use a “win-win” approach – It is easier to keep existing customers happy than to gain new ones • Develop a customer database – Ongoing customer contact is improved with information on people’s attributes and shopping behaviors Retail Mgt. Inc. publishing as Prentice Hall . 11e (c) 2010 Pearson Education.

11e (c) 2010 Pearson Education. and improving retail strategy Retail Mgt. analyzing.Parts of Retail Management: A Strategic Approach Building relationships and strategic planning Retailing institutions Consumer behavior and information gathering Elements of retailing strategy Integrating. Inc. publishing as Prentice Hall .

and so on. • Determine the consumer market to target on the basis of its characteristics (such as gender and income level) and needs (such as product and brand preferences). image. market share. • Set long-run and short-run objectives for sales and profit. • Implement an integrated strategy that combines such factors as store location. • Devise an overall. pricing. . long-run plan that gives general direction to the firm and its employees. • Regularly evaluate performance and correct weaknesses or problem when observed. product assortment. and advertising and displays to achieve objectives.The Importance of Developing and Applying a Retail Strategy ( An overall plan guiding a retail firm) The six steps in strategic planning • Define type of business of the goods or services category and the company’s specific orientation.

7843/:.80 343..478 #09.439.:894207/.982574.110..94385#09.807940050893.045. 3 3 .997-:908.0.55 9.0#0. .394.9 0 .943 3.:894207.3304308 W 0.0/9 31472.   !0.9.:8942078..3 W &80.3/ 84553-0.5574.-. 5:-83.8!7039.9434350450 8.9.. 980..

943 .333 #09. 897.0..90 3907. .   !0...5574.3/2574.3/31472.90.3/897.943858.3709.47.8!7039.3.02039 $97.3. 5.9 0 .3 ..943 3.3897.!.79841#09.33899:9438 438:207-0.9073 02039841709.90. 5:-83.90 #09.93 . :/370.7843/:.

943 574/:.0453. $ .8 8:.7.9.0 .08.3:/3.4200.9../70.3.080307.33907.70 2.3/57010703..905071472.1.42-3088:.8574/:.803/07.0/ .909.9.3 8850.9.3/-7.#09.709949./.425.3.081478.709.34..90789. 90172..90.438:2072.80.07983 .47039.3/57419  2.3/553.3/980254008 W 2502039.884792039 57.9478 .0.3/8443 W 090723090. 43 7:35.08 W 0.8894704.30880847 574-02034-807.3/.3/ 90.9047.894.3/300/8 8:.172  %08890583897.1.90.08 W #0:.0410.9...5.3/8479 7:34-0.3 .3/.333 W 013095041-:83088419044/847807.04-0...:.5.943 W $0943 7:3.90 34.4770..0 .