Introduction

to the World
of Retailing
Retail
• Quickest cycle time from
idea, to implementation,
to assessment &
refinement of any
industry.
 Retailing
• a set of bus. acts. that adds value to
the products and services sold to
customers for their personal or family
use.
• not only as sale of products in stores
involves sale of services, overnight
lodging, a doctor’s exam, a haircut,
DVD rental, or home delivered pizza.
 Retailer
• a business that sells
products/services to consumers
for their personal & family use.
• final business in a distribution
channel – links manufacturers
and consumers.
Distribution channel
• a set of firms that facilitate
the movement of products
from production to the
point of sale to the
ultimate consumers.
Manufacturers
• make products and sell them to
retailers or wholesalers.
Vertical Integration
• a firms performs more that one
set of activities in the channel,
such as investments by retailers in
wholesaling & manufacturing.
Backward Integration
• arises when a retailer
performs some distribution
and manufacturing services,
such as operating
warehouses or designing
private label merchandise
Forward Integration
• when a manufacturer
undertakes retailing
services, such as Ralph
Lauren.
Functions Performed
by Retailers
1.Providing an assortment of
products and services.
2.Breaking bulk.
3.Holding inventory.
4.Providing services.
 Increasing the
value of products
and services
Social & Economic Significance
• Support for Community
• Retail Sales
• Employment
 Opportunities in Retailing
1.Management – retailers hire
and promote people w/ wide
range of skills and interest
2.Entrepreneurial- provides
opportunities for people who
wish to start their own business
• Jeff Benzos (Amazon.com)
• Donald Fisher (The GAP)
• Dave Thomas (Wendy’s)
Retail Management Decision Process
• Retail managers need to know the
environment in which they
operate before they can develop
and implement effective strategy.
Critical environment Factors
• Macroenvironment –
technological, social, and
ethical/legal/political factors
• Microenvironment – focuses
on competitors and customers
 Competitors
• Intratype Competition – competition
between the same type of retailers.
• Variety – number of different
merchandise categories within a store or
department.
• Scrambled merchandising – offering of
merchandise not typically associated with
the store type.
Customers
• Customers needs are changing
and ever-increasing rate.
 Retail Strategy – plans to focus its resources
to accomplish it objectives

1. It identifies the target market/s,

towards which the retailer will direct
its efforts.
2. It identifies the nature of the
merchandise and services the retailer
will offer to satisfy the need of the TM
3. How the retailer will build a long term
advantage over its competitors.
Ethical & Legal Considerations
• Ethics – the principles governing the
behavior of individuals and companies
to establish appropriate behavior and
indicate what is right or wrong.
• Laws – dictate which activities society
has deemed wrong, those acts. for
which retailers and their employee will
be punished through federal or state
legal system.
Checklist for Making Ethical Decisions
1. Would I be embarrassed if a customer
found out about my behavior?
2. Would my supervisor disapprove of this
B?
3. Would most coworkers fell that this B. is
unusual?
4. Am I about to do this because I think I
can get away with it?
5. Would I be upset if a company did this to
me?
6. Would my family or friends think less of
me if I told them about engaging in this
act.?
7. Am I concerned about the possible
consequences of this B?
8. Would I be upset if this behavior were
publicized in a newspaper article?
9. Would society be worse off if everyone
engaged in this B. or act?
 Choices when you view your firms
policies/request as improper
1. Ignore your personal values & do what
your C ask you to do. (self respect
suffers)
2. Take a stand & tell your employer what
you think. Influence the decisions and
policies of your C and supervisor.
3. Refuse to compromise your principles.
(might get fired or forced to quit)
Prepare for a test next week
on what we have discussed
today.Read chapter 2 of
Retailing Management by
Levy/Weitz, might be
included in the test.
Have a Blessed Weekend!