Post on 03-Jun-2018
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Building andSustaining
Relationships inRetailing
BERMAN EVANS
1
RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH11th Edition
BERM N EV NS
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Chapter ObjectivesTo explain what value really means and to
highlight its pivotal role in retailers
building and sustaining relationshipsTo describe how both customer
relationships and channel relationships maybe nurtured in todays highly competitive
marketplace
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Chapter Objectives (cont.)To examine the differences in relationship
building between goods and services retailers
To discuss the impact of technology onrelationships in retailing
To consider the interplay between retailersethical performance and relationships in retailing
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What is Value?The bottom line:
Consumers will demand more for less from the
shopping experienceThey will spend less time shopping
They will split the commodity-shopping trip from thevalue-added shopping trip
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What is Value? (cont.)Channel Perspective
Value is a series ofactivities andprocesses (the valuechain) that provide acertain value for theconsumer.
Customer Perspective
Value is a perceptionthat the shopper has of
the value chain.
It is the view of all thebenefits from a purchaseversus the price paid.
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Retail Value ChainRepresents the total bundle of benefits offered to
consumers through a channel of distribution
Store location and parking, retailer ambience,customer service, brands/products carried,product quality, retailers in-stock position,shipping, prices, image, and other elements
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Three Aspects of Value-Oriented
Retail Strategy
Expected
Augmented
Potential
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Potential Pitfalls to Avoid in Planning a Value-
Oriented Retail Strategy
Planning value solely from a price perspective
Providing value-enhanced services that customersdo not want or will not pay extra for
Competing in the wrong value/price segment
Believing augmented elements alone create value
Paying lip service to customer service
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Figure 2-2: A Value-Oriented Retailing
Checklist
Is value defined from a consumer perspective?
Does the retailer have a clear value/price point?
Is the retailers value position competitively defensible?
Are channel partners capable of value-enhancingservices?
Does the retailer distinguish between expected andaugmented value chain elements?
Has the retailer identified potential value chain elements? Is the retailers value-oriented approach aimed at a
distinct market?
Is the retailers value-oriented approach consistent?
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Figure 2-2: A Value-Oriented Retailing
Checklist (cont.)
Is the retailers value-oriented approach effectivelycommunicated?
Can the target market clearly identify the retailers
positioning?Does the retailers positioning consider sales versus
profits?
Does the retailer set customer satisfaction goals?
Does the retailer measure customer satisfaction levels? Is the retailer careful to avoid the pitfalls in value-oriented
retailing?
Is the retailer always looking out for new opportunitiesthat will create customer value?
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Customer Service Expected customer
service is the service
level that customerswant to receive fromany retailer such asbasic employee
courtesy.
Augmented customerservice includes the
activities thatenhance theshopping experienceand give retailers a
competitiveadvantage.
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Figure 2-4: Classifying Customer Services
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Fundamental DecisionsWhat customer services are expected and what
customer services are augmented for a particular
retailer?What level of customer service is proper to
complement a firms image?
Should there be a choice of customer services?
Should customer services be free? How can a retailer measure the benefits of providing
customer services against their costs?
How can customer services be terminated?
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Figure 2-5: H-E-B Going Above and
Beyond
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Table 2-1a: Typical Customer Services
Credit
Delivery
Alterations/Installations
Packaging/giftwrapping
Complaints/Returnhandling
Gift certificates
Trade-ins
Trial purchasesSpecial sales
Extended store hours
Mail/phone orders
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Table 2-1b: Miscellaneous Customer Services
Bridal registry
Interior designers
Personal shoppersTicket outlets
Parking
Water fountains
Payphones
Baby strollers
Restrooms
Restaurants
BabysittingFitting rooms
Beauty salons
Fur storage
Shopping bags
Information
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2-Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publ ishing as Prentice Hall2-1818
Figure 2-6: Turning Around Weak Customer
Service
Focus on
Customer Concerns
Empower Frontline
Employees
Show That You Are
Listening
Express Sincere
Understanding
Apologize and Rectify
the Situation
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Principles of Category Management
Retailers listen more to customers
Profitability is improved because inventory moreclosely matches demand
By being better focused, each department is moredesirable for shoppers
Retail buyers are given more responsibilities andaccountability for category results
Retailers and suppliers must share data and bemore computerized
Retailers and suppliers must plan together
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Figure 2-7: Elements Contributing to Effective
Channel Relationships
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Four Characteristics of
Services Retailing
Intangibility
Inseparability
Perishability
Variability
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Figure 2-8a: Characteristics of
Service Retailing
Intangibility
No patent protection possible
Difficult to display/communicate service benefits
Service prices difficult to set Quality judgment is subjective
Some services involve performances/experiences
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Figure 2-8b: Characteristics of
Service Retailing
Inseparability
Consumer may be involved in service production
Centralized mass production difficult Consumer loyalty may rest with employees
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Figure 2-8c: Characteristics of
Service Retailing
Perishability
Services cannot be inventoried
Effects of seasonality can be severe
Planning employee schedules can be complex
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Figure 2-8d: Characteristics of
Service Retailing
Variability
Standardization and quality control hard to achieve
Services may be delivered in locations
beyond control of management Customers may perceive variability
even when it does not actually occur
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Figure 2-9: Consumer Perceptions of
Service Retailing
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Figure 2-11: Eddie Bauer: Strong Ethical
Sensibilities
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Figure 2-12: Understanding the Americans with
Disabilities Act
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Figure A2-1: Lessons in Service Retailing
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