Retail marketing

THE WORLD OF RETAILING:

1. Introduction to the World of Retailing 2. Types of Retailers 3. Multichannel Retailing 4. The Retail Customer 5. Customer Buying Behavior

RETAILING STRETEGY:
6. Retail Marketing Strategy 7. Financial Strategy 8. Retail Locations 9. Site Location 10. Organization Structure & Human Resource Management 11. Information System and Supply Chain Management

MERCHANDISING
MANAGENENT: 12. Planning Merchandise Assortments 13. Buying Systems 14. Buying Merchandise 15. Pricing 16. Retail Communication Mix

STORE MANAGEMENT:
17. Managing the Store 18. Store Layout, Design, and Visual Merchandising 19. Customer Service

Introduction to the World of Retailing

outline What Is Retailing? Economic Significance of Retailing Opportunities in Retailing The Retail Management Decision process What Is Retailing Retailing is a set of business activities that adds value to the products and services sold to consumers for their personal or family use". Often people think of retailing only as the sale of products in stores. But retailing also involves the sale of services : overnight lodging in a motel, a doctor's exam, a haircut, a videotape rental, or a home-delivered pizza. What Is Retailing 1- A Retailer's Role in Distribution Channel: A retailer is a business that sells products & services to consumers for their personal or family use. Retailers are the final business in distribution channels and links manufacturers with consumers. Manufacturer Wholesaler Retailer Consumer

2- Functions Performed by Retailers: Retailers undertake business activities and perform functions that increase the value of the products and services they sell to consumers. These functions are: a. b. c. d. Providing an Assortment of Product /Services. Breaking Bulk. Holding Inventory. Providing Services.

a. Providing Assortments: Supermarkets typically carry 20,000 to 30,000 different items made by over 500 companies. Offering an assortment enables their customers to choose from wide selection of brands, designs, sizes, colors, and prices in one location. If each of manufacturer had its own stores that only sold its own products, consumers would have to go to many different stores to buy groceries to prepare a single meal.

b. Breaking Bulk: To reduce transportation costs manufacturers and wholesalers typically ship cases of frozen food or cartons of mineral water to retailers. Retailers then offer the products in smaller quantities tailored to individual consumers' and households' consumption patterns. This is called breaking bulk. c. Holding Inventory: A major function of retailer is to keep inventory so that products will be available when consumers want them. By maintaining an inventory, retailers provide a benefit to consumers they reduce the consumer's cost of storing products. This is particularly important to consumers with limited storage space and for purchasing perishable merchandise like meat, fresh vegetables and fruits. d. Providing Services: Retailers provide services that make it easier for customers to buy and use products. They even provide credit to consumers. They display products so consumers can see and sometimes test them before buying. Some retailers have salespeople on hand to answer questions and provide additional information about products. Customers can choose whether they want to pick merchandise up at store or have it shipped to their home. 3- Organization of Distribution Channels: In some distribution channels, the manufacturing, wholesaling, and retailing activities are performed by independent firms. But sometimes distribution channels have some vertical integration. Which means that a firm performs more than one set of activities in the channel such as investments by retailers in wholesaling and / or manufacturing. for example: most large retailers- such as Hyperstar, Metro, and Gourmet do both wholesaling and retailing activities. They buy directly from manufacturers, have merchandise shipped to their warehouses for storage, and then distribute the merchandise to their stores. Other retailers, such as Chen One and Hang Ten are even more vertically integrated. They design the merchandise, manufacture it and then they sell it exclusively. 4- Structure of Retailing & Distribution Channels Around the World: The U.S. distribution system has the greatest retail density with the greatest concentration of large retail firms. Some people think that the U.S. is over stored. Many U.S. retail firms are large enough to operate their own warehouses eliminating the need of wholesalers. In contrast the Japanese distribution system is having small stores operated by relatively small firms and a large independent wholesale industry. The European distribution system falls between the U.S. and Japanese system, the Northern European being the most similar to the U.S. system. Top priority of the Japanese economic policy is to reduce unemployment by protecting small retail business. The population density in the U.S is much lower than in Europe and Japan. Thus Europe and Japan have less low- cost real estate available for building large stores.

Economic Significance of Retailing - Economic Significance of Retailing: Because activities performed by retailers are important to consumers, retailing is a significant economic institution and a big business in the society. - Retail Sales: Retailing affects every facet of life. Just think of how many contacts you have with retailers when you eat meals, furnish your apartment, have your car fixed, and buy clothing for job interview. US retail sales in 2001 were $3 trillion. These official statistics include only store and catalog sales; they don't include other types of non store retail such as Internet etc. Employment: Retailing is also one of the largest industries in terms of employment, in 2010 there were 26 million people employed in retailing. Retailing-approximately have 17% of U.S. workforce. Over the next eight years, it is estimated that employment in retail trades will grow 3 million jobs. Opportunities in Retailing 1- Management Opportunities: Retailers raise capital from financial institutions; purchase goods and services; develop accounting and MIS to control operations; manage warehouse and distribution system; and design and develop new products as well as undertake marketing activities such as advertising, promotions, sales force management, and market research. Thus retailers employ people with expertise and interest in finance, accounting, HRM, logistics, and computer system as well as marketing. 2- Entrepreneurial Opportunities: Retailing also provides opportunities for people wishing to start their own business. Many retail entrepreneurs are among the Forbes 400 wealthiest people in the U.S. highly successful retail entrepreneurs include Jeffrey Bezos (Amazon.com) Dave Thomas (Wendy's), and Donald Fisher (The Gap). The Retail Management Decision Process The retailing concept emphasizes that high-performance retailers must be strong competitors. They cannot achieve high performance by simply satisfying customers' needs. They must also keep a close watch to ensure that competitors don't attract their customers. 1- Competitors: At first glance, identifying competitors appears easy. Retailer's primary competitors are those with the same retail format. Thus, department stores competes against other department stores and super markets compete with other supermarkets. The competition between the same type of retailers is called intra type competition.

By offering greater variety in one store, retailers can offer one stop shopping to satisfy most of the needs of their target market. For Example, clothing and food are now available in grocery, department, discount, and drugstores. The offering of merchandise not typically associated with the store type, such as clothing in a drugstore, is called scrambled merchandising. Scrambled merchandising increases intertype competition, competition between retailer that sell similar merchandising using different formats, such as discount and department stores. 2- Customers: Customers needs are continually changing at an ever increasing rate. Retailers need to respond demographic and lifestyle trends in the society. To develop and implement an effective strategy, retailers also need to know the information about why customers shop, how they select a store, and how they select among that stores merchandise. 3- Developing a Retail Strategy: The next stage in the retail management decision making process, is formulating and implementing a retail strategy, which is based on an understanding of macro and microenvironments. The retail strategy indicates how the firm plans to focus its resources to accomplish its objectives. It identifies (1) the target market towards which the retailer will direct its efforts, (2) the nature of the merchandise and services the retailer will offer to satisfy needs of the target market, and (3) how retailer will build a long term advantage over competitors. 4- Strategic Decision Areas: The key strategic decision areas involve determining a market strategy, financial strategy, location strategy, organizational structure and human resource strategy. When major environmental changes occur, the current strategy and the reasoning behind it are reexamined. The retailer then decide what if any, strategy changes are needed to take advantage of new opportunities or avoid new threats in the environment. 5- Implementing the Retail Strategy: To implement a retail strategy, management develops a retail mix that satisfies the needs of its target market better than its competitors. The retail mix is the combination of factors retailers use to satisfy customers needs and influence their purchase decisions. Elements in the retail mix include the types of merchandise and services offered, merchandise pricing, advertising and promotional programs, store design, merchandise display, assistance to customers provided by salespeople, and convenience of the store's location. Managers in the buying organization must decide how much and what types of merchandise to buy, the vendors to use and the purchase terms, the retail prices to set, and how to advertise and promote the merchandise. Store manager must determine how to recruit, select and motivate sales associates, where and how merchandise will be displayed, and nature of services provided to the customers.

Whole Foods Market: An Organic and Natural Food Supermarkets: Whole Foods Market, one of the fastest growing supermarket chain, illustrates the use of merchandise and store management activities to implement a retail strategy. Whole foods stores, at 26,000 square feet, are much larger and carry a much broader assortments than the typical natural and organic grocery store. To ensure the quality of its private labels. The stores sells non vegetarians food, such as red meats and coffee, so the health conscious non vegetarians can have one stop shopping experience. The assortment includes two lines of private label products and are free of artificial sweeteners, colorings, artificial flavorings, and preservatives. Buyers work with food producers and organic farmers for products sold under Whole Food premium label. To ensure the quality, three inspectors fly over 100,000 miles away a year visiting farms and checking the crops. Few People Know "The word retail is diverted from the French word retailer, meaning to cut a price off or break bulk". "In 1999, total expenditures on goods sold by retailers were greater than expenditures on medical care, housing, and recreation combined". "One out of every five U.S workers is employed in retailing".