01 Nature Retailing

7/31/2019 01 Nature Retailing

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THE NATURE

OF RETAILING


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THE NATURE OF RETAILING

What is Retailing

Retail Careers and Job Skills

The Retailer in the Channel ofDistribution

The Retailer as an Image Creator

Retailers and the Marketing Concept A Retail Challenge: The Right

Merchandising Blend


3/23

DEFINITIONS

RETAILING is the business activity of sellinggoods and services to the final consumer

RETAILER is any business which directs itsmarketing effort towards the final consumerfor the purpose of selling goods or services -

-greater than 50% of the total sales mustbe retail sales to be a retailer

-many types of retailers


4/23

CONTRASTING RETAIL AND

WHOLESALE OPERATION

RETAILERS

Sell smaller product quantities on a morefrequent basis

Store facilities open to the general public Higher per unit price due to individual unit

sales

Almost exclusive reliance on one price policy

Ultimate consumers makes initial salescontact

Considerable emphasis placed on storeatmosphere


5/23

CONTRASTING RETAIL AND

WHOLESALES OPERATION

WHOLESALERS

sell larger product quantities on a lessfrequent basis

over-the-counter sales seldom made togeneral public

lower per unit price due to bulk package

sales more extensive use of variable price structure

sales representatives make initial salescontract

little or no emphasis on facility atmospherics


6/23

RETAILING IS:

educational, exciting

dynamic, demanding

small town, big city

local, regional, national, internationalthe management of change

the most imp link in the distribution channel

a major economic force

a significant area for career opportunities


7/23

CHARACTERISTICS OF RETAIL CAREERS

Many job opportunities in smallest towns orlargest urban center

High job security, even in times of economicstagnation

Many opportunities for advancement

Many opportunities for women Salaries vary significantly; often low pay at

start

Skills gained in retailing are transferable to

other job opportunities The downsides of retail careers are: image problems

constant evaluation


8/23

JOB SKILLS NEEDED IN RETAIL

1. Merchandising

buying

supplier management selling

relationship building

advertising & promotion

display building

2. Operations

warehousing

receiving

delivery

security

customer service store management


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JOB SKILLS NEEDED IN RETAIL

3.Sales Promotion

advertising display

publicity

sales promoactivities

4.Control

asset management credit

A/P, A/R, auditing

data processing

5.Personnel

recruiting

selecting

training compensation

union issues


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RETAIL CHALLENGE

You are given the job to head a committee toselect a new president for a retail chain.

Rank the following criteria on a scale of 1-10(where 10 is high) on the importance of

each criteria in evaluating candidates.1. hard work 6. initiative

2. analytical skills 7. leadership

3. creativity 8. organization

4. decisiveness 9. risk taking

5. flexibility 10. stress tolerance


11/23

RETAILERS ARE AN IMPORTANT LINK

IN THE CHANNEL OF DISTRIBUTION

Retailer provide services for manufacturers

buying

selling

assortment creating stocking

delivering

credit extending informing

consulting

transferring ownership


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RETAILERS ARE AN IMPORTANT LINK

IN THE CHANNEL OF DISTRIBUTION

Retailers provide services for consumers buying

selling

bulk breaking

assortment creating

stocking

delivering

credit extending informing

consulting

transferring ownership


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RETAILER AS A

PRODUCER/CONSUMER LINK

Assortment GapQuantity gap

Space Gap

Time gap

Retailers create utility!!


14/23

Retailers are intermediaries

who are very interested inchannel relationships.

Improved channelrelationships often involve

forming vertical marketingsystems.


15/23

VERTICAL MARKETING SYSTEMS

Professionally managedand centrally

programmednetworks, pre-engineered toachieve operating economies and maximummarket impact

Allows the channel team to achieve

technological, managerial, and promotionalleverage

Achieved through

persuasive administrative powers

legally binding contractualagreements

partial or total ownership of channel

members

A AS A AG


16/23

THE RETAILER AS AN IMAGE

CREATOR

Retailing is an image creating activity!! Imageis a mental picture that forms in the

human mind as a result of many differentstimuli

Retail imageis the impression, personality,or mental picture that is called to mind whena consumer is asked to describe a particular

retail organization Retail image is created by many

components!!


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THE COMPONENTS OF A RETAIL IMAGE

product factors service factors

price factors location factors

atmosphere factors layout and display factors

communication factors


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RETAIL IMAGES ARE IMPORTANT BECAUSE

1. Simplify the consumers decision making andshopping process.

2. Attract shoppers who have a self image close

to the retailers image.

3. Help segment consumer markets and

improve targeting.

4. Differentiate the retailer from competing

retailers and other businesses.


19/23

THE PROBLEM OF RETAILING

Must balance ability of the firms merchandising programs

to meet the needs of targeted consumers

With ability of the firms administrative plans to

meet the retailers need to operate effectivelyand efficiently

*See Key Performance Measures forRetail Businesses

S


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RETAILERS IMPLEMENT THE

MARKETING CONCEPT

Retailers strive to sell customers what theywant rather than what the retailer has bought

Retailers who adopt the marketing conceptare neither exclusively customer driven orprofit driven, they seek a workable balance

between these two goals.

Relationship marketing and retention retailingare important concepts


21/23

RETENTION RETAILING IS IMPORTANT

1. Most customers do not complain

60 90% switch stores/brands

2. Cost 5X more to attract a new customer thanit does to retain an existing one

3. Customers become more valuable over time

less wasted retail effort as retailer knowsthe customer and what s/he wants

greater price advantage as customer isless price sensitive

lower transactional cost

lower communication costs

THE RETAIL CHALLENGE IS


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THE RETAIL CHALLENGE IS

TO OFFER THE RIGHT

MERCHANDISING BLEND the right product

in the right quantities in the right place

at the right time

at the right price by the right appeal

with the right service

QUOTE FROM SAM WALTON


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QUOTE FROM SAM WALTON

FOUNDER OF WALMARTFor my whole retail career, I have stuck to

one guiding principlegive your customerswhat they want, and customers wanteverything: a wide assortment of good qualitymerchandise; the lowest possible prices;

guaranteed satisfaction with what you buy;friendly, knowledgeable service; convenienthours; free parking; a pleasant shoppingexperience.

You love it when you visit a store thatsomehow exceeds your expectations, andyou hate it when a store inconveniences you,or gives you a hard time, or just pretends

youre invisible

01 Nature Retailing

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