Retailing of U S A MARKET BY BABASAB PATIL

Retailing

04/10/23 babasabpatilfreepptmba.com 1

Learning Objectives

1. Discuss the importance of retailing in the economy

2. Explain the dimensions by which retailers can be classified

3. Describe the major types of retail operations

Learning Objectives (continued)

4. Discuss nonstore retailing techniques

5. Define franchising and describe its two basic forms

6. List the major tasks involved in developing a retail marketing strategy

7. Describe new developments in retailing

Learning Objective

Discuss the importance of retailing in the economy11

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Retailing

RetailingRetailing

All the activities directly related to

the sale of goods and services to

the ultimate consumer for

personal, non-business use.

The Role of Retailing

Retailers account for 11.7 percent of U.S. employment

Retailing accounts for 13 percent of U.S. businesses

Retailers ring nearly 40 percent of the U.S. GDP

Industry is dominated by a few giant organizations, such as Wal-Mart

Ten Largest Retailers2004 rank Company Revenue # of stores1 Wal-Mart $258.6 billion 4906

2 Home Depot $64.8 billion 1707

3 Kroger $53.7 billion 3774

4 Target $48.1 billion 1553

5 Costco $42.5 billion 420

6 Sears $41.4 billion 1970

7 Safeway $35.6 billion 1817

8 Albertson’s $35.4 billion 2305

9 Walgreen $32.5 billion 4227

10 Lowe’s $30.8 billion 9521 babasabpatilfreepptmba.com 7

Learning Objective

Explain the dimensions by which retailers can be classified

Classification of Retail Operations

OwnershipOwnership

Level of ServiceLevel of Service

Product AssortmentProduct Assortment

PricePrice

Classification of Ownership

IndependentRetailers

Chain StoresChain Stores

FranchisesFranchises

Level of Service

Full ServiceFull Service Self Service Self Service

Discount storesDiscount stores Exclusive storesExclusive storesFactory outlets Warehouse clubs

Factory outlets Warehouse clubs

Types of Stores and Their Characteristics

Type of RetailerType of RetailerType of RetailerType of Retailer

Department StoreDepartment Store

Specialty StoreSpecialty Store

SupermarketSupermarket

Convenience StoreConvenience Store

DrugstoreDrugstore

Full-line DiscounterFull-line Discounter

Specialty DiscounterSpecialty Discounter

Warehouse ClubsWarehouse Clubs

Off-price RetailerOff-price Retailer

RestaurantRestaurant

Service Service LevelLevel

Mod Hi-HighMod Hi-High

HighHigh

LowLow

Low-ModLow-Mod

Mod-LowMod-Low

LowLow

Low-HighLow-High

Assort-Assort-mentment

Assort-Assort-mentment PricePricePricePrice GrossGross

MarginMarginGrossGrossMarginMargin

BroadBroad

NarrowNarrow

BroadBroad

Med-NarrowMed-Narrow

MediumMedium

Med-BroadMed-Broad

BroadBroad

Med-NarrowMed-Narrow

Mod-HighMod-High

ModerateModerate

Mod HighMod High

ModerateModerate

Mod LowMod Low

Mod Lo-lowMod Lo-low

Low-lowerLow-lower

LowLow

Low-HighLow-High

Mod HighMod High

HighHigh

LowLow

Mod HighMod High

LowLow

Mod LowMod Low

LowLow

Low-HighLow-High

Gross Margin

Gross MarginGross Margin

The amount of money the retailer

makes as a percentage of sales

after the cost of goods sold is

subtracted.

Learning Objective

Describe the major types of retail operations33

Major Types of Retail Operations

Department StoresDepartment Stores

Specialty StoresSpecialty Stores

SupermarketsSupermarkets

DrugstoresDrugstores

Convenience StoresConvenience Stores

Discount StoresDiscount Stores

RestaurantsRestaurants

Categories of Discount Stores

Full-LineDiscounters

Specialty Discount Stores

WarehouseClubs

Off-PriceDiscount Retailers

Mass Merchandising

Mass MerchandisingMass Merchandising

Retailing strategy using moderate

to low prices on large quantities of

merchandise and lower service to

stimulate high turnover of

products.

Supercenters and Extreme Value Retailing

SupercenterSupercenter Retail store combining groceriesand general merchandise goods

with a wide range of services.

Retail store combining groceriesand general merchandise goods

with a wide range of services.

Extreme-valueExtreme-value Smaller stores with a narrower product selection emphasizing daily necessities at rock bottom prices.

Smaller stores with a narrower product selection emphasizing daily necessities at rock bottom prices.

Learning Objective

Discuss nonstore retailing techniques44

Nonstore Retailing

Automatic VendingAutomatic Vending

Direct RetailingDirect Retailing

Direct MarketingDirect Marketing

Electronic RetailingElectronic Retailing

Direct Retailing

Door-to-DoorDoor-to-Door

Office-to-OfficeOffice-to-Office

Home SalesParties

Direct RetailersDirect Retailerssell products:sell products:

Types of Direct Marketing

TelemarketingTelemarketing

Catalogs & Mail OrderCatalogs & Mail Order

Direct MailDirect Mail

Electronic RetailingElectronic Retailing

Types of Electronic Retailing

On-Line RetailingOn-Line Retailing

Shop-at-Home NetworksShop-at-Home Networks

Learning Objective

Define franchising and describe its two basic forms55

Basic Forms of Franchising

Business FormatFranchising

Product and Trade Name Franchising

Largest U.S. Franchisers

1 McDonald’s 6 Pizza Hut

2 Southland (7-Eleven) 7 Tandy (Radio Shack)

3 Subway 8 Jani-King

4 Burger King 9 Taco Bell

5 KFC 10 Dairy Queen

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Basic Forms of Franchising

Product and Trade Name Franchising

BusinessFormat

Franchising

BusinessFormat

Franchising

Dealer agrees to sell certain products provided by a

manufacturer or wholesaler.

Dealer agrees to sell certain products provided by a

manufacturer or wholesaler.

An ongoing business relationship between a franchiser

and a franchisee.

An ongoing business relationship between a franchiser

and a franchisee.

Learning Objective

List the major tasks involved in developing a retail marketing strategy

Retail Marketing Strategy

Define & Select a Target Market

Develop the “Six Ps”

Defining a Target Market

STEP 1:Segment the Market

DemographicsDemographics

GeographicsGeographics

PsychographicsPsychographics

Choosing the Retailing Mix

STEP 2:Choose the Retailing Mix

ProductProduct

PricePrice

PromotionPromotion

PlacePlace

PersonnelPersonnel

PresentationPresentation

The Retailing Mix

TargetTargetMarketMarket

ProductProduct

PricePrice

PromotionPromotion

PlacePlace

PersonnelPersonnel

PresentationPresentation

Product Offering

Product OfferingProduct Offering

The mix of products offered to the

consumer by the retailer; also

called the product assortment or

merchandise mix.

Retail Promotion Strategy

AdvertisingAdvertising

Public RelationsPublic Relations

PublicityPublicity

Sales PromotionSales Promotion

Factors to Consider in Site Selection

Economic growth potential

Area competitionArea competition

GeographyGeography

Location Decisions

Freestanding StoreFreestanding Store

Shopping Center TenantShopping Center Tenant

Mall TenantMall Tenant

Shopping Center and Mall Locations

• Design attracts shoppers• Activities and anchor stores

draw customers• Ample parking• Unified image

• Expensive leases• Failure of common

promotion efforts• Lease restrictions• Anchor store domination• Direct competitors

Advantages Disadvantages

QualityImage

High PriceHigh Price Low Price Low Price

Good ValueGood Value

Presentation of the Retail Store

Employee type and densityEmployee type and density

Merchandise type and densityMerchandise type and density

Fixture type and densityFixture type and density

SoundSound

OdorsOdors

Visual factorsVisual factors

Personnel and Customer Service

Suggestion SellingSuggestion Selling

Trading UpTrading Up

Two Common Two Common SellingSelling

TechniquesTechniques

Two Common Two Common SellingSelling

TechniquesTechniques

Customer Service for On-Line Retailers

Easy-to-use Web site Easy-to-use Web site

Product availabilityProduct availability

Simple returnsSimple returns

Learning Objective

Describe new developments in retailing77

New Developments in Retailing

InteractivityInteractivity

m-Commercem-Commerce

Thank you

Retailing of U S A MARKET BY BABASAB PATIL

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