Total Retail Glossary

8/13/2019 Total Retail Glossary

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RETAIL GLOSSARYAcquisition The takeover of a retail operation by another company.

AnchorA business, usually a department store, that is particularly important toa shopping center because it attracts a great deal of traffic.

Audit Tape

A record kept by the cash register of all the transactions entered on theregister. Describes the extent to which customers are familiar with aproduct or company

Bill of Lading A contract between a freight company and a shipper regardingtransportation, which includes the exact contents of the delivery.

Branch StoreA smaller store operated by a department store that carries a limitedrange of merchandise.

Button Ticket A pricing ticket with a hook at the top that can be attached to a button.

Buying OfficeA central office where buyers purchase merchandise for all stores in adepartment store chain.

hain StoresTwo or more stores with similar characteristics, owned by the samecompany.

lassic A style that does not lose popularity over time.

on!enience "roducts

Merchandise that is purchased frequently, without advance planning,

including staples, impulse items, and emergency items.

ooperati!eA group in which several retailers pool their resources to buy productsat a discount from manufacturers also called group buying.

#eli!ery ReceiptA receipt from a delivery driver that indicates a delivery was made to astore.

#epart$ent StoreA large retail store that sells a variety of merchandise, organi!ed intodepartments according to the kind of merchandise.

#ifferentiation The process of distinguishing services or products through design.

#irectory A list of the departments of a department store and their locations.

#iscount StoreA self"service retail store with low markups. #xample$ %al"Mart,&mart.

#ollar ontrolA buying method that depends on the amount of purchases, rather thanthe number of items purchased.

#ura%le Goods'roducts that can be used frequently and have a long life expectancy,such as furniture, (ewelry, and ma(or appliances.

Electronic Shopping )hopping over the *nternet or through a T+ cable channel.

E$ergency Ite$s'roducts that are purchased in an unusual situation when need issuddenly high, such as umbrellas during a rainstorm.

&ad A fashion that gains and loses popularity very quickly.

&ashion The popularity of a certain product, style, or appearance.

&ashion ycle The process of a fashion gaining and losing mass acceptance.

&I&Oirst in"first out a system of stock rotation in which the merchandisethat is received first by a store is the merchandise that is sold first.

&lying Squad A group of employees, especially in a department store, who are notassigned to any specific department, but work wherever they areneeded.

&or'ard Reser!e Stock -eserve stock that is kept in a stock room near the selling floor.

&or'ard Stock Merchandise that is kept on the selling floor.

&ull BackgroundThe rear of a window display that completely covers the display,closing it off from the store.

&ull(Line Describes department stores that carry a full line of merchandise, fromappliances and hardware to clothing and (ewelry.

Good )ith I$portant Ser!ices A productservice mix that offers a good that needs or is enhanced byservices, such as a service contract or warranty.


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Goods. Tangible products for sale that can be held or touched

Grade La%eling 'roduct labeling that includes a quality rating for the product.

Group Buying A group in which several retailers pool their resources to buy productsat a discount from manufacturers also called a cooperative.

Gu$$ed La%el A pricing ticket with adhesive on the back, used on cloth, leather, and

unpainted wood.*ard Line. Describes all nontextile merchandise

*eterogenous "roducts Durable products that are different in quality, appearance, and otherfeatures.

*ole "in Ticket A pricing ticket used on paired items such as gloves.

*o$e &urnishings-efers to all furniture and accessories for the home, including dishesand glassware, rugs, and furniture.

*o$ogenous "roductsDurable products that are similar in quality, but different in price andrequire comparisons.

*yper$arketA huge retail store that is a combination of a drugstore, supermarket,and discount store.

I$age The impression customers have of a company or service.

I$pulse Ite$s'roducts that people purchase without planning for it, such asmaga!ines or candy bars.

Infor$ati!e La%eling 'roduct labeling that includes the product/s performance in tests.

Leased #epart$ent

A part of a department store that is actually leased out to anothercompany and operated as an independent store within the departmentstore common with cosmetics companies.

Li$ited Line

Describes a department store that carries a limited amount ofmerchandise, usually concentrating on clothing, accessories, andbeauty supplies.

+erchandising "lan A strategy for actual and pro(ected sales for a specific period of time.

+erger The combining of two or more retail organi!ations into one company.

+ultiline #rugstore A store that sells a variety of health and beauty products, plus somesmall appliances and household items, in addition to prescriptiondrugs.

,ondura%le Goods'roducts that are purchased frequently and used in a short period oftime, such as beauty supplies and cosmetics.

,on$arkingA pricing system in which each individual item does not have a pricetag, instead a price is labeled on a bin or a shelf.

Open BackgroundDescribes a window display with a completely unobstructed view ofthe interior of the store.

O!ererrA mistake made when an employee enters an amount into the registerthat is more than the sale price.

"artial BackgroundThe rear of a window display that is partially covered, but allows

customers to see through the display into the store.

"atronage Buying +oti!eA reason customers will shop at one store instead of another, can berational or emotional.

"in TicketThe sort of price ticket used on towels and washcloths that is attachedwith a pin.

"oint(Of(Sale Ter$inalAn electronic machine at a checkout station that feeds informationfrom product tags directly into a computer.

"re$arkingA system in which the manufacturer, rather than the retailer, marksmerchandise with the retail price.

"reretailing A system in which a duplicate purchase order is sent to receiving whenmerchandise is ordered so that as soon as the merchandise is received,


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it can be marked with the correct prices.

"roduct-Ser!ice +i.The number and kind of products and services a general merchandiseretailer will offer.

"roduct-Ser!ice "lanning The process of deciding what the productservice mix will be.

"rofit enter A section of a store that earns money for the retailer.

"ro.e$icsThe nonverbal communication suggested by the space between twopeople.

"ull "olicy A promotional policy aimed at building strong consumer demand for aproduct.

"ush "olicyA promotional policy aimed at markets with the intention of gettingretailers to stock a product in order to build supply in the marketplace.

Reser!e Stock Merchandise that is kept somewhere other than the selling floor.

Resident Buying OfficeAn office located in a central merchandising area where buyers canreceive information about products from a variety of manufacturers.

Retailers0usinesses that buy goods from wholesalers or manufacturers andresell them to customers.

Retailing StrategyA strategic plan to adapt to changing technology and markets, andmeet company goals and ob(ectives through retailing.

Returns "ercentage

The relationship between returns and allowances, and sales, calculated

by dividing returns and allowances by gross sales.

Ringseal TicketA pricing ticket shaped like a butterfly bandage, used on (ewelry andlampshades.

Scri$

A sheer fabric onto which pictures can be painted to be used as atransparent backdrop in the theater and as a visual merchandising propin stores.

Ser!iceA productservice mix that offers only a service, with noaccompanying product needed or wanted, such as an insurance policy.

Ser!ice )ith Acco$panying

"roducts

A productservice mix in which a service is the primary offering, suchas interior decorating, and products, such as curtains and carpet, areoffered to accompany and augment the service.

Ser!ices

*ntangible items for purchase, such as haircuts or tax advice, that

provide customer satisfaction without the ownership of a tangible item.

Shoplifting #etection )aferA small device attached to goods, especially clothing, that sets off analarm if it leaves the store.

Shopping Ite$sDurable goods that require a great deal of comparison before purchase,such as appliances and furniture.

Soft Line Describes textile products.

Specialty "roducts'roducts that solve a specific want or need for specific customers,often expensive products with special characteristics or brand identity.

Specialty Store A store that speciali!es in selling a specific kind of product.

Specification BuyingDemands made by retailers and wholesalers to manufacturers of theproducts they sponsor and sell.

Staples

'roducts that are purchased routinely for everyday use, with littledecision"making, and that must be in stock at all times, such ascleaning supplies and food.

Stock keeping /nit 0S1/2 #ach item or group of related items in a unit control inventory system.

Store Operations*ncludes all functions of operating a store except merchandising, suchas customer service, protection, maintenance, and distribution.

String Ticket A pricing ticket attached with a piece of string.

Supporti!e Ser!icesree services offered to customers to increase convenience, makeshopping easier, and entice customers to buy more.

Tangi%le "roduct A productservice mix that offers only a tangible product for which thecustomer needs no assistance and no other services are offered, such as


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most groceries and back"to"school items.

Te.tile +erchandise'roducts made from natural or manmade fibers, including clothing,curtains, and bedding.

T'ig

A small store operated by a department store that carries only a verylimited amount of merchandise, usually focusing on a few relateditems.

/nder(The(ounter StockMerchandise that is kept in drawers or cabinets where customers

cannot reach them, common with cosmetics counters.

/ndererrA mistake that occurs when an employee enters an amount into thecash register that is less than the sale price.

/nit ontrolA buying method in which the buyer makes buying decisions based oninventory and sales records, rather than the cost of items purchased.

/ni!ersal "roduct ode 0/"2 0ar code used for electronic entry.

/ni!ersal 3endor +arketing

0/3+2

'roduct code that appears as a series of numbers across the top of aprice tag.

/nsought "roducts 'roducts that consumers don/t know about and aren/t asking for.

3ariety StoreA store that focuses on low"cost, stock merchandise, with a limitedselection of low"cost furniture and appliances.

)arehouse lu%

A giant store that sells merchandise in bulk at low prices, and in which

customers must buy a membership in order to shop.

)arehouse Reser!e Stock-eserve stock that is stored in a warehouse, with only one exampleitem on display.


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Glossary

0inDisplay 0in A large box in which products for sale are kept on the shop floor

0ricks and mortar storeA shop that is in a building as opposed to an internet shopping site, a streetmarket stall, party sales, van sales or door"to"door sales

0uying 'ower The ability to negotiate favorable terms due to the proposition of highvolume purchases

1atchment 2area3 The area from where the ma(ority of a shop/s customers are located

1hainAs in 4chain stores4. A chain is a group of stores operated under oneorgani!ation or brand

1heckout The point where customers declare and pay for their goods

1ombination )tore A store that combines two or more specialist product areas

1o"operativeAn organi!ation that is (ointly owned and or managed by its members andis run for the mutual benefit of members

1o"op 1o"operative

1oncessionaire A store within a store

1ourier )hipper Dedicated 2vehicle3Delivery

A vehicle delivering to one location only

Delivery 1onsolidation 1ollating products in order to produce appropriate delivery batches

Distance -etailing)ales of goods between two distant parties where the deliverer has nodirect interest in the transaction

Distributor )hipper

Downstream Distribution orward movement of goods through the supply chain

Dress 1ode -ules on what clothes can and can/t be worn

Dry 5rocery 5enerally food that is not fresh

inished 5oods 5enerally products that are ready to be consumed

ranchiseA trading entity such as a marketing tool or method, a product or group ofproducts or simply a trade brand

ranchiseeThe party that sells goods and services within the framework of thefranchise

ranchisor The party that established 2manages3 the franchise

5alvani!ed Metal Metal that is coated with an anti"corrosive material such as !inc

5arment 1overA protective cover for clothes, ranging from a simple polythene garmentcover to a heavy duty !ipped bag

5arment 'rocessorThe function that receives finished clothes and steams, folds, hangs orpacks them, ready for sale

5eneral )tore A shop that sells a variety of goods including food5ondola 2fixture3 A free standing display fixture where all sides are accessible to customers

6aulier )hipper

6ub Distribution7sing a central location to collate and consolidate products prior to onwarddispatch

8ogistics The planning and execution of product distribution

Margin 'rofit

Merchandising The way that products are displayed in a shop

Multiple 2store3 -etail 1hain
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9ne"stop"shop-etail outlet that caters for virtually every need within a product or servicegroup or across all products and services

9utlet )hop

'allet A large flat board that is used to hold and move products

'itch

A plot of land used by street traders

As insales pitch, the approach, emphasis and nuances used whenarticulating the virtues of a service or product

'olyester )ynthetic polymer often used to coat household goods such as refrigerators

'olyhook 0agA bag that contains a small plastic hangar as an integral part of the top ofthe bag

'rice %arA colloquial phrase denoting aggressive price reductions on the same 2orsimilar3 products by competing retailers

'rimary 'ackaging The immediate packaging around the finished product

'rocurement 9btaining 5oods

'roduct 9ffer 'roduct/s attributes, including price

-etail 1hain A group of shops operated by the same organi!ation

-everse 8ogistics -everse movement of goods through the supply chain

)ales 'romotionA time"limited period when a product or group of products are given extrapublicity and intense marketing

)econdary 'ackagingThe container in which several finished packs would be distributed 2andsometimes displayed in3

)elf")erviceA store where customers can pick the goods directly from the display andtake them to the checkout for payment

)hadow 0ox A cabinet display built into a wall

)pot Delivery A single one"off delivery

)taple 5oods 'roducts that are regularly purchased and are a necessity

)upply 1hainThe route that products take from their production through to theirconsumption

Tertiary 'ackaging The carrier for the secondary packagingTransporter )hipper

7pper 5arments 1lothes worn on the upper part of the body

7pstream Distribution -everse movement of goods through the supply chain

+olume The amount of stock being sold
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Back orderA system used by suppliers when stock is not available at the timeof order to save a store from having to place another order.

Balanced stock

Merchandise that is offered by a store in sufficient quantities,colours, styles, si!es and assortment characteristics to meet thecustomers/ needs.

BarcodeA series of stripes located on a product which allows a scanning

device to recognise the product.

Barcode scanner

An electronic device used to read barcodes. May be and individualunit for stock processing or attached to 'oint of )ale systems forsales recording.

BrandA name, term, sign, symbol, or a combination of these used toidentify the products of one seller or group of sellers anddifferentiate them from those of competitors.

Brand i$age

The total of all the impressions the consumer receives from thebrand. These include actual experience, hearsay from otherconsumers, its packaging, its name, the kind of store in which it issold, advertising, the tone and form of advertising, the media usedfor advertising, and the types of people seen using, buying or

recommending the brand.

Brand loyaltyThe degree of consumer preference for one brand compared toclose substitutes it is often measured statistically in consumermarketing research.

Buying po'erThe ability to buy in large quantities and thereby attract specialprice or discount.

apti!e Brands

#xclusive merchandise assortments where the brand mark is ownedby someone other than the company selling the merchandise andthe design, product development and sourcing is either completedin house or with an external partner.

apti!e $arketThe potential clientele of retail or service businesses located inareas where consumers may have no reasonable alternative sources

of supply.

arry(o!er $erchandise5oods left over from one season that are carried over to the nextseason.

losing in!entoryThe value of stock on hand at the end of an accounting period,either at cost or retail value.

ode of 3endor onductA regulatory document used to monitor labour and safetyconditions of factories used by vendors manufacturers of acompany.

o$petitionAny store which sells or provides similar products or services.*nvolves any other store selling full or part ranges of the sametypes of products.

onsu$er

*ndividual, household or family as purchaser and user of goods as

distinguished from business or industrial user who may buy forresale or re"manufacturing.

ost of goods sold

The amount which the retailer has paid for goods actually resold. *tincludes the invoice cost, discounts, rebates, shrinkage and freightcharges. ormula$ opening stock 2at cost3 plus purchases 2at cost3less closing stock 2at cost3.

ost price An amount which the retailer pays to the suppliervendor for goods

#epart$ent storeA retail organi!ation which carries a wide range of merchandisethat is organi!ed into separate departments for the purpose ofpromotion, service and control.


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#irect %uying 0uying directly from a manufacturer.

E#L"#veryday 8ow 'ricing. A pricing policy based on the lowest priceseveryday rather than sale markdowns.

&lagship store

The leading store within a group, usually the biggest in si!e andstock holding and used as a benchmark against which other storesare measured. *.e. The 0ay :ueen )treet is the flagship 0ay store in9ntario.

&lyer An advertising brochure inserted in newspapers, maga!ines ordirectly mailed to customers.

Gross $arginThe difference between net sales and the cost of goods sold. *t isalso referred to as gross profit.

Leased- Licensed depart$entA small externally owned department that leases space within a "department store. *.e. ;ellers/ 9ptical is a licensed department.

Loss pre!entionA term used to describe a number of methods used to reduce theamount of all losses and shrinkage.

+argin The amount of gross profit made when an item is sold.

+arkdo'n The reduction of an item/s selling price.

+arket leaderThe company, product or brand of product that has the largest salesto the consumer in a particular market

+arket share 6ow much of the total market a company, product or brand ofproduct attracts.

+arkupThe amount added to the cost price of goods to give the requiredselling price.

+erchandise $i.The ratio of the types, styles, si!es, colours, prices, etc. to thequantities of the merchandise kept in a store to satisfy its targetmarket.

,ational Brands


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RefundThe return of payment to the customer for goods that have been "returned.

RetailingAll activities directly related to the sale of goods and services to theultimate consumer for personal, non"business use.

Sales floorThe area in which products and services are displayed and the salestransaction is processed.

Sales forecastAn estimate of sales 2in dollars, units, etc.3 for a specified future

period.Sales !olu$e The quantity of total sales achieved in units or dollars, etc.

Sa$e store sales)ame store sales 2or comparable store sales3 are sales of stores thathave been opened for one year or more.

Seasonal $erchandiseA line of goods sold in a specific season or period, e.g. summer,winter, 1hristmas and #aster.

Shopping centre

A geographical cluster of retail stores collectively stocking anassortment of goods varied enough to satisfy most of themerchandise wants of consumers within convenient traveling time,and thereby attracting a general shopping trade.

Specialty storeA store which handles a limited variety of goods which haveunique characteristics.

Target $arket The potential group of customers to which all retail activities are "directed in an effort to attract them.

Trade$arkA brand or part of a brand that is given legal protection because itis capable of exclusive appropriation and is used in a distinctiveway.

Traffic flo' The number and direction of customers in and around a store.

TransactionAny exchange process of stock and payment to and from asupplier, retailer or customer.

)rite(off The reduction of a product/s value to !ero.


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Additional +arkup

An increase in a retail price above the original markup that isused when demand is unexpectedly high or when costs arerising.

Additional +arkup

"ercentage

8ooks at total dollar additional markups as a percentage ofnet sales$

Addition to Retail

"ercentage

Measures a price rise as a percentage of original price$

Ad!ertisingAny paid, nonpersonal communication transmitted throughout"of"store mass media by an identified sponsor.

Affinity

#xists when the various stores at a given locationcomplement, blend, and cooperate with one another, and eachbenefits from the others/ presence.

All(You(an(Afford

+ethod

A promotional budgeting technique in which a retailer firstallots funds for each element of the retail strategy mix exceptpromotion. %hatever funds are left over are placed in apromotional budget.

Analog +odel

A computer site"selection tool in which potential sales areestimated on the basis of existing store revenues in similarareas, the competition at a prospective location, the newstore/s expected market shares at that location, and the si!eand density of the location/s primary trading area.

Ancillary usto$er

Ser!ices

#xtra elements that enhance a retail strategy mix. They do nothave to be provided.

Application Blank

The first tool used to screen applicants. *t provides data oneducation, experience, health, reasons for leaving prior (obs,

organi!ational memberships, hobbies, and references.Assets Any items a retailer owns with a monetary value.

Asset Turno!erA performance measure based on a retailer/s net sales andtotal assets. *t is equal to net sales divided by total assets.

Assort$ent #isplayAn interior display in which a retailer exhibits a wide rangeof merchandise for the customer. *t may be open or closed.

At$osphere-efers to a store/s physical characteristics that are used todevelop an image and draw customers.

At$ospherics SeeAtmosphere.

Attitudes 0Opinions2The positive, neutral, or negative feelings a person has aboutthe economy, politics, goods, services, institutions, and so on.

Audit &or$ 8ists the area2s3 to be examined and the exact informationrequired in evaluating each area.

Auto$atic +arkdo'n

"lan

1ontrols the amount and timing of markdowns on the basis ofthe length of time merchandise remains in stock.

Auto$atic Reordering

Syste$

9rders merchandise when stock"on"hand reaches a pre"determined reorder point. An automatic reorder can begenerated by a computer on the basis of a perpetual inventorysystem and reorder point calculations.

Bait Ad!ertising An illegal practice whereby a retailer lures a customer byadvertising goods and services at exceptionally low prices


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then, once the customer contacts the retailer, he or she is toldthe goodservice of interest is out of stock or of inferiorquality. A salesperson tries to convince the customer topurchase a better, more expensive substitute that is available.The retailer has no intention of selling the advertised item.

Bait(and(S'itch

Ad!ertising

See0ait Advertising.

Balanced Tenancy

9ccurs when stores in a planned shopping center complementeach other in the quality and variety of their productofferings. The kind and number of stores are linked to theoverall needs of the surrounding population.

Balance Sheet

*temi!es a retailer/s assets, liabilities, and net worth at aspecific point in time it is based on the principle that assetsequal liabilities plus net worth.

Basic Stock List

)pecifies the inventory level, color, brand, style category,si!e, package, and so on for every staple item carried by theretailer.

Basic Stock +ethodAn inventory"level planning tool wherein a retailer carriesmore items than it expects to sell over a specified period$

Battle of the Brands

%hen retailers and manufacturers compete for shelf spaceallocated to various brands and for control over displaylocations.

Bench$arking

9ccurs when the retailer sets its own standards and measuresperformance based on the achievements of its sector ofretailing, specific competitors, high"performance firms,andor the prior actions of the company itself.

Bifurcated Retailing

Denotes the decline of middle"of"the"market retailing due tothe popularity of both mass merchandising and positioned

retailing.

Book In!entory Syste$

&eeps a running total of the value of all inventory on hand atcost at a given time. This is done by regularly recordingpurchases and adding them to existing inventory value salestransactions are then subtracted to arrive at the new currentinventory value 2all at cost3.

Botto$(/p Space

+anage$ent Approach

#xists when planning starts at the individual product leveland then proceeds to the category, total store, and overallcompany levels.

Bo. 0Li$ited(Line2 Store

A food"based discounter that focuses on a small selection ofitems, moderate hours of operation 2compared to

supermarkets3, few services, and limited national brands.B"I See0uying 'ower *ndex.

Budgeting9utlines a retailer/s planned expenditures for a given timeperiod based on its expected performance.

Bundled "ricing*nvolves a retailer providing a number of services for onebasic price.

Business &or$at

&ranchising

An arrangement in which the franchisee receives assistanceon site location, quality control, accounting systems, startuppractices, management training, and responding to problems"" besides the right to sell goods and services.


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Buying "o'er Inde. 0B"I2

A measure of a geographic area/s market characteristics,expressed in terms of the area/s percentage of 7.). effectivebuying income, the area/s percentage of 7.). retail sales, andthe area/s percentage of 7.). population3.

anned Sales "resentationA memori!ed, repetitive speech given to all customersinterested in a particular item.

apital E.penditures-etail expenditures that are long"term investments in fixedassets.

ase #isplay #mployed to exhibit heavier, bulkier items than racks hold.

ash &lo'

-elates the amount and timing of revenues received to theamount and timing of expenditures made during a specifictime period.

ategory 1iller Store

An especially large specialty store featuring an enormousselection in its product category and relatively low prices. *tdraws consumers from wide geographic areas.

ategory +anage$ent

A relationship"oriented technique that some firms, especiallysupermarkets, are beginning to use to improve shelf"space

productivity.B# See1entral 0usiness District.

ensus of "opulation

)upplies a wide range of demographic data for all 7.). citiesand surrounding vicinities. Data are organi!ed on ageographic basis.

entral Business #istrict

0B#2

The hub of retailing in a city. *t is the largest shopping area inthat city and is synonymous with the term 4downtown.4 The10D exists where there is the greatest concentration of officebuildings and retail stores.

entrali4ed Buying

Organi4ation

9ccurs when a retailer has all purchase decisions emanatingfrom one office.

hain Multiple retail units under common ownership that engage insome level of centrali!ed 2or coordinated3 purchasing anddecision making.

hannel ontrol

9ccurs when one member of a distribution channel candominate the decisions made in that channel by the power itpossesses.

hannel of #istri%ution

1omprises all of the businesses and people involved in thephysical movement and transfer of ownership of goods andservices from producer to consumer.

lass onsciousnessThe extent to which a person desires and pursues socialstatus.

lassification+erchandising

Allows firms to obtain more financial data by subdividingeach specified department into further categories for relatedtypes of merchandise.

O# 0ollect on #eli!ery28ets customers have products delivered to them beforepayment is made.

ogniti!e #issonance

Doubt that occurs after a purchase is made, which can bealleviated by customer after"care, money"back guarantees,and realistic sales presentations and advertising campaigns.

ollect on #eli!ery See19D.

o$%ination Store 7nites supermarket and general merchandise sales in one


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facility, with general merchandise typically accounting for =>percent to ?@ percent of total store sales.

o$$unity Shopping

enter

A moderate"si!ed, planned shopping facility with a branchdepartment store, a variety store, andor a category killerstore, in addition to several smaller stores. About =@,@@@ to@@,@@@ people, who live or work within @ to =@ minutes ofthe center, are served by this location.

o$parati!e Ad!ertisingMessages comparing a retailer/s offerings with those ofcompetitors.

o$pensation

*ncludes direct monetary payments 2such as salaries,commissions, and bonuses3 and indirect payments 2such aspaid vacations, health and life insurance benefits, andretirement plans3.

o$petition(Oriented

"ricing

An approach in which a retailer sets its prices in accordancewith competitors/.

o$petiti!e Ad!antages The distinct competencies of a retailer relative to competitors.

o$petiti!e "arity

+ethod

A promotional budgeting technique by which a retailer/s

budget is raised or lowered based on the actions ofcompetitors.

o$petiti!e "ricingA marketing"oriented strategy whereby a service retailer setsits prices on the basis of the prices charged by competitors.

o$puteri4ed heckout

#nables retailers to efficiently process transactions and havestrict inventory control. *n a 7'1"based system, cashiersmanually ring up sales or pass items over or past opticalscanners. 1omputeri!ed registers instantly record and displaysales, customers get detailed receipts, and all inventory dataare stored in a computer memory bank.

oncentrated +arketing )elling goods and services to one specific group.

onsign$ent "urchase *tems not paid for by retailer until they are sold. The retailercan return unsold merchandise. Title is not taken by theretailer until the final sale is completed.

onstrained #ecision

+aking

#xcludes franchisees from or limits their involvement in thestrategic planning process.

onsu$er Beha!ior

*nvolves the process by which people determine whether,what, when, where, how, from whom, and how often topurchase goods and services.

onsu$er ooperati!e

A retail firm owned by its customer members. A group ofconsumers invests in the company, receives stock certificates,elects officers, manages operations, and shares the profits or

savings that accrue.

onsu$er #ecision

"rocess

The stages a consumer goes through in buying a good orservice$ stimulus, problem awareness, information search,evaluation of alternatives, purchase, and post"purchasebehavior. Demographics and life"style factors affect thisdecision process.

onsu$eris$

*nvolves the activities of government, business, andindependent organi!ations that are designed to protectindividuals from practices infringing upon their rights asconsumers.


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ontingency "ricing

An arrangement whereby the retailer does not get paid untilafter the service is performed. and payment is contingent onthe service/s being satisfactory.

ontrol

The phase in the evaluation of a firm/s strategy and tactics inwhich a semiannual or annual review of the company takesplace.

ontrolla%le 3aria%lesThose aspects of business that the retailer can directly affect2such as hours of operation and sales personnel3.

ontrol /nits Merchandise categories for which data are gathered.

on!enience Store

A food"oriented retailer that is well located, is open longhours, and carries a moderate number of items. *t is small, hasaverage to above"average prices, and average atmosphere andcustomer services.

on!entional

Super$arket

A departmentali!ed food store that emphasi!es a wide rangeof food and related products sales of general merchandise arerather limited.

ooperati!e Ad!ertising9ccurs when a manufacturer or wholesaler and a retailer, or

two or more retailers, share advertising costs.ooperati!e Buying

The procedure used when a group of independent retailersgets together to make quantity purchases from a supplier.

ore usto$ers1onsumers with whom retailers should seek to nurture longrelationships. They should be singled out in a firm/s data base.

orporation

A retail firm that is formally incorporated under state law. *tis a legal entity apart from individual officers 2orstockholders3.

ost o$ple$entThe average relationship of cost to retail value for allmerchandise available for sale during a given time period.

ost +ethod ofAccounting

-equires the retailer/s cost of every item to be recorded on an

accounting sheet andor coded on a price tag or merchandisecontainer. %hen a physical inventory is conducted, everyitem/s cost must be ascertained, the quantity of every item instock counted, and the total inventory value at cost calculated.

ost of Goods Sold

The amount a retailer has paid to acquire the merchandisesold during a given time period. *t equals the cost ofmerchandise available for sale minus the cost value of endinginventory.

ost(Oriented "ricing

An approach in which a retailer sets a price floor, theminimum price acceptable to the firm so it can reach aspecified profit goal. A retailer usually computes merchandise

and retail operating costs and adds a profit margin to thesefigures.

ost("lus "ricing9ccurs when a retailer adds its costs to desired profit marginsto derive selling prices.

redit +anage$ent*nvolves the policies and practices retailers follow inreceiving payments from their customers.

ross(Training#nables personnel to learn tasks associated with more thanone (ob.

ulture A distinctive heritage shared by a group of people. *tinfluences the importance of family, work, education, and


15/39

other concepts by passing on a series of beliefs, norms, andcustoms.

ur!ing 0&ree(&lo'ing2

Traffic &lo'

'resents displays and aisles in a free"flowing pattern.

usto$ary "ricingA pricing strategy whereby a retailer sets prices for goods andservices and seeks to maintain them for an extended period.

usto$er Loyalty

0&requent Shopper2

"rogra$s

*ntended to reward a retailer/s best customers, the ones withwhom it wants to form long"lasting relationships.

usto$er Ser!ice

-efers to the identifiable, but sometimes intangible, activitiesundertaken by a retailer in con(unction with the basic goodsand services it sells.

usto$er Space

The area required by shoppers that contributes greatly to astore/s atmosphere. *t can include a lounge, benches andorchairs, dressing rooms, rest rooms, a restaurant, verticaltransportation, a nursery, parking, and wide aisles.

ut aseAn inexpensive display, in which merchandise is left in the

original carton.

#ata Analysis

The stage in the research process which assesses secondaryandor primary data and relates it to the defined issue orproblem.

#ata(Base +anage$ent

The procedure used to gather, integrate, apply, and storeinformation related to specific sub(ect areas. *t is a keyelement in a retail information system.

#ata(Base RetailingA way of collecting, storing, and using relevant informationon customers.

#ata )arehousing

A new advance in data"base management whereby copies ofall the data bases in a company are maintained in one location

and can be assessed by employees at any locale.#ead Areas Awkward spaces where normal displays cannot be set up.

#ealer Brands See'rivate 0rands.

#e%it(ard Syste$

A computeri!ed system whereby the price of a good orservice is immediately deducted from a consumer/s bankaccount and entered into a retailer/s account.

#ecentrali4ed Buying

Organi4ation

8ets purchase decisions be made locally or regionally.

#eferred Billing#nables customers to make purchases and not pay for themfor several months, without interest.

#e$and(Oriented "ricing

An approach by which a retailer sets prices based on

consumer desires. *t determines the range of prices acceptableto the target market.

#e$ographics9b(ective and quantifiable population data that are easilyidentifiable and measurable.

#epart$ent Store

A large retail unit with an extensive assortment 2width anddepth3 of goods and services that is organi!ed into separatedepartments for purposes of buying, promotion, customerservice, and control.

#epth of Assort$ent-efers to the variety in any one goodsservice category withwhich a retailer is involved.


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#estination RetailerA retailer to whom consumers will make a special shoppingtrip. The destination may be a store, a catalog, or a %eb site.

#estination Store

A retail outlet with a trading area much larger than that of acompetitor with a less unique appeal to customers. *t offers abetter merchandise assortment in its product category2ies3,promotes more extensively, and creates a stronger image.

#ifferentiated +arketingAiming at two or more distinct consumer groups, withdifferent retailing approaches for each group.

#irect +arketing

A form of retailing in which a customer is first exposed to agood or service through a nonpersonal medium and thenorders by mail or phone "" sometimes, by computer.

#irect "roduct

"rofita%ility 0#""2

1alculated when a retailer finds the profitability of eachcategory or unit of merchandise by computing ad(usted per"unit gross margin and assigning direct product costs forexpense categories such as warehousing, transportation,handling, and selling. *t equals an item/s gross profit less itsdirect retailing costs.

#irect Selling

*ncludes both personal contact with consumers in their homes2and other nonstore locations such as offices3 and phonesolicitations initiated by a retailer.

#irect Store #istri%ution

#xists when retailers have at least some goods shippeddirectly from suppliers to individual stores. *t works best withretailers that also utili!e #D*.

#iscretionary Inco$e Money left after paying taxes and buying necessities.

#isguised Sur!eyA technique in which the respondent is not told the realpurpose of a research study.

#istri%uted "ro$otion

Effort

7sed by retailers that promote throughout the year.

#i!ersification The way in which retailers become active in business outsidetheir normal operations "" and add different goods andorservice categories.

#i!ersified RetailerA multiline merchandising firm under central ownership. *t isalso known as a retail conglomerate or conglomerchant.

#i!ersionary "ricing

A practice used by deceptive service firms. A low price isstated for one or a few services 2emphasi!ed in promotion3 togive the illusion that all prices are low.

#ollar ontrol*nvolves planning and monitoring a retailer/s financialinvestment in merchandise over a stated time period.

#o'nsi4ing#xists when unprofitable stores are closed or divisions are

sold off by retailers dissatisfied with their performance.#"" SeeDirect 'roduct 'rofitability.

#S# SeeDirect )tore Distribution.

#ual 3ertical +arketing

Syste$

*nvolves firms involved in more than one type of distributionarrangement. This enables those firms to appeal to differentconsumers, increase revenues, share some of their costs, andmaintain a good degree of control over their strategy.

#u$p BinA case display that houses piles of sale clothing, marked"down books, or other products.

Ease of Entry 9ccurs for retailers due to low capital requirements and no, or


17/39

relatively simple, licensing provisions.

EBI See#ffective 0uying *ncome.

Econo$ic Base

-efers to an area/s industrial and commercial structure "" thecompanies and industries that residents depend on to earn aliving.

Econo$ic Order 5uantity

0EO52

The quantity per order 2in units3 that minimi!es the total costsof processing orders and holding inventory.

ER See#fficient 1onsumer -esponse.

E#I See#lectronic Data *nterchange.

Editor 6 "u%lisher

+arket Guide

'rovides considerable economic base data for cities on ayearly basis. *t also contains statistics on population si!e andtotal households by city.

E#L" See#veryday 8ow 'ricing.

Effecti!e Buying Inco$e

0EBI2

'ersonal income 2wages, salaries, interest, dividends, profits,rental income, and pension income3 minus federal, state, andlocal taxes and nontax payments 2such as personalcontributions for social security insurance3. *t is commonly

known as disposable personal income.Efficient onsu$er

Response 0ER2

A form of logistics management through which supermarketsare incorporating aspects of quick response inventoryplanning, electronic data interchange, and logistics planning.

Electronic Article

Sur!eillance

*nvolves attaching specially designed tags or labels toproducts.

Electronic Banking*nvolves both the use of automatic teller machines 2ATMs3and the instant processing of retail purchases.

Electronic #ata

Interchange 0E#I2

8ets retailers and suppliers regularly exchange informationthrough their computers with regard to inventory levels,delivery times, unit sales, and so on, of particular items.

Electronic "oint(of(Sale

Syste$

'erforms all tasks of a computeri!ed checkout and alsoverifies check and charge transactions, provides instantaneoussales reports, monitors and changes prices, sends intra" andinterstore messages, evaluates personnel and profitability, andstores data.

E$ployee E$po'er$ent

A method of improving customer service in which workershave discretion to do what they believe is necessary "" withinreason "" to satisfy the customer, even if this means bendingsome company rules.

Ense$%le #isplayAn interior display whereby coordinated merchandise isgrouped and displayed together.

EO5 See#conomic 9rder :uantity.Equal Store Organi4ation

1entrali!es the buying function. The branches become salesunits with equal operational status.

Ethics8et a retailer act in a trustworthy, fair, honest, and respectfulmanner with each of its constituencies.

E!aluation of Alternati!esThe stage in the decision process where a consumer selectsone good or service to buy from a list of alternatives.

E!eryday Lo' "ricing

0E#L"2

A version of customary pricing, whereby a retailer strives tosell its goods and services at consistently low pricesthroughout the selling season.


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E.clusi!e #istri%ution

Takes place when suppliers enter into agreements with one ora few retailers that designate the latter as the only companiesin specified geographic areas to carry certain brands andorproduct lines.

E.peri$entA type of research in which one or more elements of a retailstrategy mix are manipulated under controlled conditions.

E.tended #ecision +aking

9ccurs when a consumer makes full use of the decisionprocess, usually for expensive, complex goods and serviceswith which the consumer has had little or no experience.

E.ternal Secondary #ata Available from sources outside a firm.

&actory Outlet

A manufacturer"owned store selling that firm/s closeouts,discontinued merchandise, irregulars, canceled orders, and,sometimes, in"season, first"quality merchandise.

&a$ily Life ycleDescribes how a traditional family evolves frombachelorhood to children to solitary retirement.

&eed%ack)ignals or cues as to the success or failure of part of a retailstrategy.

&I&O +ethod 8ogically assumes old merchandise is sold first, while neweritems remain in inventory. *t matches inventory value withthe current cost structure.

&inancial Le!erage

A performance measure based on the relationship between aretailer/s total assets and net worth. *t is equal to total assetsdivided by net worth.

&inancial +erchandise

+anage$ent

9ccurs when a retailer specifies exactly which products arepurchased, when products are purchased, and how manyproducts are purchased.

&i.ed "ricing

#xists in situations where a branch of government has somedegree of control and retailers must conform to a stated price

structure.&lat Organi4ation A firm with many subordinates reporting to one supervisor.

&lea +arket

6as many retail vendors offering a range of products atdiscount prices in plain surroundings. Many flea markets arelocated in nontraditional sites not normally associated withretailing. They may be indoor or outdoor.

&le.i%le "ricing

A strategy that allows consumers to bargain over sellingprices those consumers who are good at bargaining obtainlower prices than those who are not.

&loor(Ready +erchandise*tems that are received at the store in condition to be putdirectly on display without any preparation by retail workers.

&ood(Based Superstore

A retailer that is larger and more diversified than aconventional supermarket but usually smaller and lessdiversified than a combination store. *t caters to consumers/complete grocery needs and offers them the ability to buy fill"in general merchandise.

&or$al Buying

Organi4ation

+iews the merchandise"buying function as a distinct retailtask a separate department is set up.

&ranchising *nvolves a contractual arrangement between a franchisor 2amanufacturer, a wholesaler, or a service sponsor3 and a retailfranchisee, which allows the franchisee to conduct a given


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form of business under an established name and according toa given pattern of business.

&ree(&lo'ing Traffic &lo' See1urving Traffic low.

&requencyThe average number of times each person who is reached isexposed to a retailer/s ads in a specific period.

&requent Shopper

"rogra$s

See1ustomer 8oyalty 'rograms.

&ringe Trading Area*ncludes the customers not found in primary and secondarytrading areas. These are the most widely dispersed customers.

&ull(Line #iscount Store

A type of department store characteri!ed by 23 a broadmerchandise assortment 2=3 centrali!ed checkout service 2B3merchandise normally sold by self"service with minimalassistance 2?3 no catalog order service 2>3 private"brandnondurable goods and well"known manufacturer"branddurable goods 2C3 hard goods accounting for a much greaterpercentage of sales than at traditional department stores 23 arelatively inexpensive building, equipment, and fixtures and2E3 less emphasis on credit sales than in full"service stores.

&unctional "roduct

Groupings

1ategori!e and display a store/s merchandise by common enduses.

Gap Analysis

#nables a company to compare its actual performance againstits potential performance, and then determine the areas inwhich it must improve.

Generic Brands


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Gray +arket Goods

0rand"name products purchased in foreign markets or goodstransshipped from other retailers. They are often sold at lowprices by unauthori!ed dealers.

Gridiron Traffic &lo' See)traight Traffic low.

Gross +arginThe difference between net sales and the total cost of goodssold. Also known as 5ross 'rofit.

Gross +argin Return onIn!est$ent 0G+ROI2

)hows the relationship between total dollar operating profitsand the average inventory investment 2at cost3 by combiningprofitability and sales"to"stock measures.

Gross "rofitThe difference between net sales and the cost of goods sold.Also known as 5ross Margin.

*er4%erg8s Theory

)ays the factors involved in producing (ob satisfaction andmotivation 2satisfiers3 differ from those leading to (obdissatisfaction 2dissatisfiers3.

*idden Assets

Depreciated assets, such as store buildings and warehouses,that are reflected on a retailer/s balance sheet at low valuesrelative to their actual worth.

*ierarchy of Authority 9utlines the (ob relationships within a company by describingthe reporting relationships among employees. 1oordinationand control are provided.

*ierarchy(of(Effects

+odel

The sequence of steps a consumer goes through in reacting toa retailer/s communication efforts that leads him or her fromawareness to knowledge to liking to preference to convictionto a purchase.

*ori4ontal ooperati!e(

Ad!ertising Agree$ent

#nables two or more retailers 2usually small, situatedtogether, or franchisees of the same company3 to share an ad.

*ori4ontal "rice &i.ing

*nvolves agreements among manufacturers, amongwholesalers, or among retailers to set prices. This is,

regardless of how 4reasonable4 resultant prices may be.

*ori4ontal Retail Audit

*nvolves analy!ing a retail firm/s overall performance, fromits organi!ational mission to goals to customer satisfaction tobasic retail strategy mix and its implementation in anintegrated, consistent way.

*ousehold Life ycle*ncorporates life stages of both family and nonfamilyhouseholds.

*uff8s La' of Shopper

Attraction

Delineates trading areas on the basis of the productassortment carried at various shopping locations, travel timesfrom the consumer/s home to alternative shopping locations,and the sensitivity of the kind of shopping to travel time.

*u$an Resource+anage$ent

*nvolves the recruitment, selection, training, compensation,and supervision of personnel in a manner consistent with theretailer/s organi!ation structure and strategy mix.

*u$an Resource

+anage$ent "rocess

1onsists of these interrelated personnel activities$recruitment, selection, training, compensation, andsupervision. The goals are to obtain, develop, and retainemployees.

I$age-epresents how a given retailer is perceived by consumersand others.

I$ple$entation The stage in the research process during which


21/39

recommendations are put into practice.

I$pulse "urchases

9ccur when consumers purchase products andor brands theyhad not planned on buying before entering a store, reading amail"order catalog, seeing a T+ shopping show, tuning to the%orld %ide %eb, and so on.

Inco$e State$ent See'rofit"and"8oss )tatement.

Incre$ental Budgeting

The process whereby a firm uses current and past budgets asguides and adds or subtracts from these budgets to arrive atthe coming period/s expenditures.

Incre$ental +ethod

A promotional budgeting technique by which a percentage iseither added to or subtracted from one year/s budget todetermine the next year/s.

Independent A retailer that owns only one retail unit.

Info$ercial

A program"length T+ advertisement 2most often, B@ minutesin length3 for a specific good or service that airs on cabletelevision or on broadcast television at a fringe time. *t isparticularly worthwhile for products that benefit from visual

demonstrations.Infor$al Buying

Organi4ation

Does not view merchandising as a distinct retail function thesame personnel handle both merchandising and other retailtasks.

Infor$ation Search

1onsists of two parts$ determining the alternative goods orservices that will solve the problem at hand 2and where theycan be bought3 and ascertaining the characteristics of eachalternative. )earch may be internal or external.

Initial +arkup 0at Retail2

0ased on the original retail value assigned to merchandiseless the merchandise costs, expressed as a percentage of theoriginal retail price.

Inside BuyingOrgani4ation )taffed by a retailer/s own personnel merchandise decisionsare made by permanent employees of the firm.

Intensi!e #istri%ution

Takes place when suppliers sell through as many retailers aspossible. This arrangement usually maximi!es suppliers/sales and it enables retailers to offer many brands andproduct versions.

Internal Secondary #ata Available within a company.

Internet

A global electronic superhighway of computer networks thatuse a common protocol and are linked by telecommunicationslines and satellite.

In!entory +anage$ent

*nvolves a retailer seeking to acquire and maintain a proper

merchandise assortment while ordering, shipping, handling,and related costs are kept in check.

In!entory Shrinkage*nvolves employee theft, customer shoplifting, and vendorfraud.

Isolated Store

A freestanding retail outlet located on either a highway or astreet. There are no ad(acent retailers with which this type ofstore shares traffic.

Issue 0"ro%le$2 #efinitionA step in the marketing research process that involves a clearstatement of the topic to be studied.

Ite$ "rice Re$o!al A practice whereby prices are marked only on shelves or


22/39

signs and not on individual items. This practice is banned inseveral states and local communities.

7o% Analysis

1onsists of gathering data about each (ob/s functions andrequirements$ duties, responsibilities, aptitude, interest,education, experience, and physical condition.

7o% +oti!ation The drive within people to attain work"related goals.

7o% Standardi4ation

&eeps the tasks of personnel with similar positions indifferent departments, such as cashiers and stockpeople inclothing and candy departments, rather uniform.

Laya'ay "lanAllows customers to give a retailer deposits to hold products.%hen customers complete payments, they take the items.

LBO See8everaged 0uyout.

Leader "ricing

9ccurs when a retailer advertises and sells selected items inits goodsservice assortment at less than usual profit margins.The goal is to increase customer traffic in the hope of sellingregularly priced goods and services in addition to thespecially priced items.

Leased #epart$ent A department in a retail store "" usually a department,discount, or specialty store "" that is rented to an outsideparty.

Le!eraged Buyout 0LBO2An ownership change that is mostly financed by loans frombanks, investors, and others.

Lia%ilitiesAny financial obligations a retailer incurs in operating abusiness.

Life(StylesThe ways in which individual consumers and families2households3 live and spend time and money.

LI&O +ethod

Assumes new merchandise is sold first, while older stockremains in inventory. *t matches current sales with the current

cost structure.

Li$ited #ecision +aking

9ccurs when a consumer uses each of the steps in thepurchase process but does not need to spend a great deal oftime on each of them.

Li$ited(Line Store See0ox )tore.

Logistics

The total process of moving goods from a manufacturer to acustomer in the most timely and cost"efficient mannerpossible.

Loss Leaders*tems priced below cost to lure more customer traffic. 8ossleaders are restricted by state minimum"price laws.

+aintained +arkup 0at

Retail2

0ased on the actual prices received for merchandise sold

during a time period less merchandise cost, expressed as apercentage.

+aintenance(Increase(

Recoup$ent Lease

6as a provision allowing for rent increases if a propertyowner/s taxes, heating bills, insurance, or other expenses risebeyond a certain point.

+anufacturer 0,ational2

Brands

'roduced and controlled by manufacturers. They are usuallywell known, supported by manufacturer ads, somewhat pre"sold to consumers, require limited retailer investment, andoften represent maximum product quality to consumers.

+arkdo'n A reduction from selling price to meet the lower price of


23/39

another retailer, adapt to inventory overstocking, clear outshopworn merchandise, reduce assortments of odds and ends,and increase customer traffic.

+arkdo'n "ercentageThe total dollar markdown as a percentage of net sales 2indollars3.

+arketing Research in

Retailing

#ntails the collection and analysis of information relating tospecific issues or problems facing a retailer.

+arketing Research

"rocess

#mbodies a series of activities$ defining the issue or problemto be studied, examining secondary data, generating primarydata 2if needed3, analy!ing data, making recommendations,and implementing findings.

+arket "enetrationA pricing strategy in which a retailer seeks to achieve largerevenues by setting low prices and selling a high unit volume.

+arket(Seg$ent "roduct

Groupings

'lace various products appealing to a given target markettogether.

+arket Ski$$ing

A pricing strategy wherein a firm charges premium prices andattracts customers less concerned with price than service,

assortment, and status.+arkup

The difference between merchandise costs and retail sellingprice.

+arkup "ercentage 0at

ost2

The difference between retail price and merchandise costexpressed as a percentage of merchandise cost.

+arkup "ercentage 0at

Retail2

The difference between retail price and merchandise costexpressed as a percentage of retail price.

+arkup "ricing

A form of cost"oriented pricing in which a retailer sets pricesby adding per"unit merchandise costs, operating expenses,and desired profit.

+arquee A sign used to display a store/s name andor logo.

+assed "ro$otion Effort 7sed by retailers that promote mostly in one or two seasons.+ass +arketing )elling goods and services to a broad spectrum of consumers.

+ass +erchandising

A positioning approach whereby retailers offer a discount orvalue"oriented image, a wide andor deep merchandiseassortment, and large store facilities.

+a4ur "lan

Divides all retail activities into four functional areas$merchandising, publicity, store management, and accountingand control.

+ega$all

An enormous plan ed shopping center with "million"plussquare feet of retail space, multiple anchor stores, up toseveral hundred specialty stores, food courts, and

entertainment facilities.+e$%ership lu%

Aims at price"conscious consumers, who must be members toshop.

+e$orandu$ "urchase

9ccurs when items are not paid for by the retailer until theyare sold. The retailer can return unsold merchandise.6owever, it takes title on delivery and is responsible fordamages.

+erchandise A!aila%le for

Sale

#quals beginning inventory, purchases, and transportationcharges.

+erchandise Buying and 1omprised of an integrated and systematic sequence of steps


24/39

*andling "rocess!from establishing a buying organi!ation through regular re"evaluation.

+erchandise SpaceThe area where nondisplayed items are kept in stock orinventory.

+erchandising

1onsists of the activities involved in acquiring particulargoods andor services and making them available at theplaces, times, and prices and in the quantity to enable aretailer to reach its goals.

+ergers *nvolve the combination of separately owned retail firms.

+icro(+erchandising

A strategy whereby a firm ad(usts shelf"space allocations torespond to customer and other differences among localmarkets.

+ini$u$("rice La's

)tate regulations preventing retailers from selling certainitems for less than the cost plus a fixed percentage to coveroverhead. These laws restrict predatory pricing and lossleaders.

+odel Stock ApproachA method of determining the amount of floor space to carry

and display a proper merchandise assortment.

+odel Stock "lan

The planned composition of fashion goods, which reflects themix of merchandise available based on expected sales. Themodel stock plan indicates product lines, colors, and si!edistributions.

+onthly "ay$ent redit

Account

-equires the consumer to pay for a purchase in equal monthlyinstallments. *nterest is usually charged.

+onthly Sales Inde.

A measure of sales seasonality that is calculated by dividingeach month/s actual sales by average monthly sales and thenmultiplying the results by @@.

+other *en 'ith Branch

Store hickensOrgani4ation

#xists when headquarters executives oversee and operate the

branches. This works well if there are few branches and thebuying preferences of branch customers are similar tocustomers of the main store.

+oti!es The reasons for consumers/ behavior.

+ultidi$ensional Scaling

A statistical technique that allows attitudinal data to becollected for several attributes in a manner that allows dataanalysis to produce a single overall rating of a retailer 2ratherthan a profile of individual characteristics3.

+ultiple(/nit "ricingA policy whereby a retailer offers discounts to customers whobuy in quantity.

+ystery Shoppers

'eople hired by retailers to pose as customers and observe

their operations, from sales presentations to how welldisplays are maintained to in"home service calls.

,ational Brands SeeManufacturer 0rands.

,ational Brands SeeManufacturer 0rands.

,B# See


25/39

and a one"time price must be agreed upon.

,eigh%orhood Business

#istrict 0,B#2

An unplanned shopping area that appeals to the convenience"shopping and service needs of a single residential area. Theleading retailer is typically a supermarket, a large drugstore,or a variety store and it is situated on the ma(or street2s3 of itsresidential area.

,eigh%orhood Shopping

enter

A planned shopping facility with the largest store being asupermarket andor a drugstore. *t serves B,@@@ to >@,@@@people who are within > minutes/ driving time 2usuallyfewer than @ minutes3.

,et Lease

1alls for all maintenance costs, such as heating, electricity,insurance, and interior repair, to be paid by the retailer ""which is responsible for their satisfactory quality.

,et "rofit #quals gross profit minus retail operating expenses

,et "rofit Before Ta.es The profit earned after all costs have been deducted.

,et "rofit +arginA performance measure based on a retailer/s net profit and netsales. *t is equal to net profit divided by net sales.

,et Sales The revenues received by a retailer during a given time periodafter deducting customer returns, markdowns, and employeediscounts.

,et )orth 1omputed as a retailer/s assets minus its liabilities.

,e!er(Out List

7sed when a retailer plans stock levels for best"sellers. *temsaccounting for high sales volume are stocked in a manner thatensures they are always available.

,iche Retailing#nables retailers to identify customer segments and deployunique strategies to address the desires of those segments.

,ondisguised Sur!eyA technique in which the respondent is told the real purposeof a research study.

,ongoods Ser!ices The area of service retailing in which intangible personalservices 2rather than goods3 are offered to consumers "" whoexperience services rather than possess them.

,onpro%a%ility Sa$ple

An approach in which stores, products, or customers arechosen by the researcher "" based on (udgment orconvenience.

,onstore Retailing

7tili!es strategy mixes that are not store"based to reachconsumers and complete transactions. *t occurs via directmarketing, direct selling, and vending machines.

O%9ecti!e(and(Task

+ethod

A promotional budgeting technique by which a retailerclearly defines its promotional goals and then prepares a

budget to satisfy these goals.

O%9ecti!es

The long"run and short"run performance targets that a retailerhopes to attain. 5oals can involve sales, profit, satisfaction ofpublics, and image.

O%ser!ation

A form of research in which present behavior or the results ofpast behavior are observed and recorded. *t can be human ormechanical.

Odd "ricingA strategy in which retail prices are set at levels below even"dollar values, such as F@.?G, F?.GE, and FGG.

Off("rice hain eatures brand"name apparel and accessories, footwear,


26/39

linens, fabrics, cosmetics, andor housewares and sells themat everyday low prices in an efficient, limited"serviceenvironment.

Off(Retail +arkdo'n

"ercentage

The markdown for each item or category of items as apercentage of original retail price.

One(*undred "ercent

Location

The optimum site for a particular store. A location labeled as@@ percent for one firm may be less than optimal for another.

One("rice "olicyA strategy wherein a retailer charges the same price to allcustomers buying an item under similar conditions.

Open redit Account-equires a consumer to pay his or her bill in full when it isdue.

Open(to(Buy

The difference between planned purchases and the purchasecommitments already made by a buyer for a given timeperiod, often a month. *t represents the amount the buyer hasleft to spend for that month and is reduced each time apurchase is made.

Operating E.pendituresThe short"term selling and administrative costs of running a

business.Operating E.penses The cost of running a retail business.

Operations +anage$ent

The efficient and effective implementation of the policies andtasks necessary to satisfy a firm/s customers, employees, andmanagement 2and stockholders, if a publicly ownedcompany3.

Opinions SeeAttitudes.

Opportunistic Buying


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Organi4ation hart5raphically displays the hierarchal relationships within afirm.

Outshopping %hen a person goes out of his or her hometown to shop.

Outside Buying

Organi4ation

A company or person external to the retailer that is hired tofulfill the buying function, usually on a fee basis.

O!erstored Trading Area

A geographic area with so many stores selling a specific goodor service that some retailers will be unable to earn anadequate profit.

O'ned(Goods Ser!icesThe area of service retailing in which goods owned byconsumers are repaired, improved, or maintained.

"arasite StoreAn outlet that does not create its own traffic and that has noreal trading area of its own.

"artnershipAn unincorporated retail firm owned by two or more persons,each of whom has a financial interest.

"ercei!ed Risk

The level of risk a consumer believes exists regarding thepurchase of a specific good or service from a specific retailer,whether or not that belief is factually correct.

"ercentage Lease )tipulates that rent is related to the retailer/s sales or profits."ercentage(of(Sales+ethod

A promotional budgeting technique whereby a retailer ties itspromotion budget to sales revenue.

"ercentage 3ariation

+ethod

An inventory"level planning method where beginning"of"month planned inventory level during any month differs fromplanned average monthly stock by only one"half of thatmonth/s variation from estimated average monthly sales.

"erfor$ance +easures

The criteria used to assess retailer effectiveness. They includetotal sales, average sales per store, sales by goodsservicecategory, sales per square foot, gross margins, gross marginreturn on investment, operating income, inventory turnover,

markdown percentages, employee turnover, financial ratios,and profitability.

"erpetual In!entory

Syste$

See0ook *nventory )ystem.

"erpetual(In!entory /nit(

ontrol Syste$

&eeps a running total of the number of units handled by aretailer by ongoing record"keeping entries that ad(ust forsales, returns, transfers to other departments or stores, receiptof shipments, and other transactions. *t can be done manually,use tags processed by computers, or rely on point"of"saledevices.

"ersonalityThe sum total of an individual/s traits, which make that

individual unique."ersonal Selling

*nvolves oral communication with one or more prospectivecustomers for the purpose of making sales.

"ersonnel SpaceThe area required for employees for changing clothes, lunchand coffee breaks, and rest rooms.

"hysical In!entory Syste$

*nvolves an actual counting of merchandise. A retailer usingthe cost method of inventory valuation and relying on aphysical inventory system can derive gross profit only asoften as it conducts a full physical inventory.

"lanned Shopping enter 1onsists of a group of architecturally unified commercial


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establishments built on a site that is centrally owned ormanaged, designed and operated as a unit, based on balancedtenancy, and surrounded by parking facilities.

"lanogra$

A visual 2graphical3 representation of the space to beallocated to selling, merchandise, personnel, and customers ""as well as to product categories.

"+s

A manufacturer/s payments for retail salespeople selling thatmanufacturer/s brand. 'Ms are in addition to thecompensation received from the retailer.

"oint of Indifference

The geographic breaking point between two cities2communities3, so that the trading area of each can bedetermined. At this point, consumers would be indifferent toshopping at either area.

"oint(of("urchase 0"O"2

#isplay

An interior display that provides consumers with information,adds to store atmosphere, and serves a substantialpromotional role.

"O" #isplay See'oint"of"'urchase Display.

"ositioning #nables a retailer to devise its strategy in a way that pro(ectsan image relative to its retail category and its competitors,and elicits consumer responses to that image.

"ost("urchase Beha!ior urther purchases or re"evaluation based on a purchase.

"o!erty of Ti$e

9ccurs when greater striving for financial security leads toless rather than more free time since the alternativescompeting for consumers/ time rise considerably.

"o'er enter

A shopping site with 2a3 up to a half"do!en or so categorykiller stores and a mix of smaller stores or 2b3 severalcomplementary stores speciali!ing in a product category.

"o'er Retailer

The status reached by a company that is dominant in some

aspect of its strategy. 1onsumers view the company asdistinctive enough to become loyal to it and go out of theirway to shop there.

"redatory "ricing

*nvolves large retailers that seek to destroy competition byselling goods and services at very low prices, thus causingsmall retailers to go out of business. The practice is restrictedby federal and state laws.

"restige "ricingAssumes consumers will not buy goods and services at pricesdeemed too low. *t is based on the price"quality association.

"re(training

An indoctrination on the history and policies of the retailerand a (ob orientation on the hours, compensation, chain of

command, and (ob duties."rice Elasticity of #e$and

-elates to the sensitivity of customers to price changes interms of the quantities they will buy.

"rice Guarantees

'rotect retailers against possible price declines. *f a retailercannot sell an item at a given price, the manufacturer pays itthe difference between planned retail and actual retail sellingprices.

"rice Line lassifications#nable retail sales, inventories, and purchases to be analy!edby retail price category.

"rice Lining23 A practice whereby retailers sell merchandise at a limited


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range of price points, with each price point representing adistinct level of quality.

"rice Lining 2=37sed by service retailers providing a wide selection ofservices. A range of prices is matched to service levels.

"rice(5uality AssociationA concept stating that many consumers feel high pricesconnote high quality and low prices connote low quality.

"ri$ary usto$er

Ser!ices

Those considered basic components of the retail strategy mixthey must be provided.

"ri$ary #ata

1ollected to address the specific issue or problem understudy. These data can be gathered internally or externallythough surveys, observations, experiments, and simulation.

"ri$ary Trading Area

#ncompasses >@ percent to E@ percent of a store/s customers.*t is the geographic area closest to the store and possesses thehighest density of customers to population and the highestper"capita sales.

"ri!ate 0#ealer2 Brands

1ontain names designated by wholesalers or retailers, aremore profitable to retailers, are better controlled by retailers,

are not sold by competing retailers, are less expensive forconsumers, and lead to customer loyalty to retailers.

"ro%a%ility 0Rando$2

Sa$ple

An approach whereby every store, product, or customer hasan equal or known chance of being chosen for study.

"ro%le$ A'areness

The stage in the decision process where the consumer notonly has been aroused by social, commercial, andor physicalstimuli, but also recogni!es the good or service underconsideration may solve a problem of shortage or unfulfilleddesire.

"ro%le$ #efinition See*ssue Definition.

"roducti!ity The efficiency with which a retail strategy is carried out.

"roduct Life ycle )hows the expected behavior of a good or service over itslife. The traditional cycle has four stages$ introduction,growth, maturity, and decline.

"roduct-Trade$ark

&ranchising

An arrangement in which franchised dealers acquire theidentities of their suppliers by agreeing to sell the latter/sproducts andor operate under suppliers/ names.

"rofit(and(Loss 0Inco$e2

State$ent

-epresents a summary of a retailer/s revenues and expensesover a particular period of time, usually on a monthly,quarterly, andor yearly basis.

"rototype Stores

9ccur with an operations strategy that requires multipleoutlets in a chain to conform to relatively uniform

construction, layout, and operations standards."sychological "ricing -efers to consumer perceptions of retail prices.

"u%licity

Any nonpersonal form of public relations whereby messagesare transmitted through mass media, the time or spaceprovided by the media is not paid for, and there is noidentified commercial sponsor.

"u%lic Relations

#ntails any communication fostering a favorable image for aretailer among its publics 2consumers, investors, government,channel members, employees, and the general public3.

"urchase Act An exchange of money or a promise to pay for ownership or


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use of a good or service. 'urchase variables include the placeof purchase, terms, and availability of merchandise.

"urchase(+oti!ation

"roduct Groupings

Appeal to the consumer/s urge to buy a product and the timehe or she is willing to spend in shopping.

5R In!entory "lanning See:uick -esponse *nventory 'lanning.

5uick Response 05R2

In!entory "lanning

#nables a retailer to reduce the amount of inventory it keepson hand by ordering more frequently and in lower quantity.

Rack #isplay An interior display that hangs or presents products neatly.

Rando$ Sa$ple See'robability )ample.

Rationali4ed Retailing

A strategy involving a high degree of centrali!edmanagement control combined with strict operatingprocedures for every phase of business.

ReachThe number of distinct people exposed to a retailer/s ads in aspecified period.

Reco$$endationsThe stage in the research process during which the alternativeapproach to best solve a problem or issue is presented.

Recruit$entThe activity whereby a retailer generates a list of (ob

applicants.Reference Groups

*nfluence people/s thoughts andor behavior. They may beclassified as aspirational, membership, and dissociative.

Regional Shopping enter

A large, planned shopping facility appealing to ageographically dispersed market. *t has at least one or twofull"si!ed department stores and >@ to >@ or more smallerretailers. The market for this center is @@,@@@"plus people,who live or work up to B@ minutes/ driving time from thecenter.

Regression +odel

A computer site"selection model that develops a series ofmathematical equations showing the association between

potential store sales and various independent variables at eachlocation under consideration.

Reilly8s La' of Retail

Gra!itation

The traditional means of trading area delineation thatestablishes a point of indifference between two cities orcommunities, so the trading area of each can be determined.

Relationship Retailing

#xists when retailers seek to establish and maintain long"termbonds with customers, rather than act as if each salestransaction is a completely new encounter with them.

Rented(Goods Ser!icesThe area of service retailing in which consumers lease anduse goods for specified periods of time.

Reorder "oint The stock level at which new orders must be placed.

Resident Buying OfficeAn inside or outside buying organi!ation that is usuallysituated in important merchandise centers 2sources of supply3and provides valuable data and contacts.

Retail Audit

The systematic examination and evaluation of a firm/s totalretailing effort or some specific aspect of it. *ts purpose is tostudy what a retailer is presently doing, appraise how well thefirm is performing, and make recommendations for futureactions.

Retail Balance-efers to the mix of stores within a district or shoppingcenter.


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Retail Infor$ation Syste$

Anticipates the information needs of retail managers collects,organi!es, and stores relevant data on a continuous basis anddirects the flow of information to the proper retail decisionmakers.

Retailing

1onsists of those business activities involved in the sale ofgoods and services to consumers for their personal, family, orhousehold use.

Retailing oncept1omprises these four elements$ customer orientation,coordinated effort, value"driven, and goal orientation.

Retailing Effecti!eness

hecklist

8ets a firm systematically assess its preparedness for thefuture.

Retail Institution

-efers to the basic format or structure of a business.*nstitutions can be classified by ownership, store"based retailstrategy mix, service versus goods retail strategy mix, andnonstore"based retail strategy mix.

Retail Life ycle

A theory asserting that institutions "" like the goods andservices they sell "" pass through identifiable life"cycle stages$innovation, accelerated development, maturity, and decline.

Retail +ethod of

Accounting

A way by which the closing inventory value is determined bycalculating the average relationship between the cost andretail values of merchandise available for sale during aperiod.

Retail Organi4ation

6ow a firm structures and assigns tasks 2functions3, policies,resources, authority, responsibilities, and rewards so as toefficiently and effectively satisfy the needs of its targetmarket, employees, and management.

Retail "erfor$ance Inde.#ncompasses five"year trends in revenue growth and profitgrowth, and a six"year average return on assets.

Retail "ro$otion Any communication by a retailer that informs, persuades,andor reminds the target market about any aspect of thatfirm.

Retail Reductions

-epresent the difference between beginning inventory pluspurchases during the period and sales plus ending inventory.They should encompass anticipated markdowns, employeeand other discounts, and stock shortages.

Retail Strategy

The overall plan guiding a retail firm. *t has an influence onthe firm/s business activities and its response to market forces,such as competition and the economy.

Return on Assets 0ROA2A performance ratio based on a retailer/s net sales, net profit,

and total assets.Return on ,et )orth

A performance measure based on a retailer/s net profit, netsales, total assets, and net worth.

Re!ol!ing redit AccountAllows a customer to charge items and be billed monthly onthe basis of the outstanding cumulative balance.

ROA See-eturn on Assets.

Ro%inson("at$an Act

0ars manufacturers and wholesalers from discrimination inprice or sales terms in selling to individual retailers if theseretailers are purchasing products of 4like quality4 and theeffect of such discrimination would be to in(ure competition.


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Routine #ecision +akingTakes place when a consumer buys out of habit and skipssteps in the purchase process.

Safety Stock

The extra inventory kept on hand to protect against out"of"stock conditions due to unexpected demand and delays indelivery.

Sale(Lease%ack

The practice of retailers building new stores and then sellingthem to real"estate investors who lease the property back tothe retailers on a long"term basis.

Sales &orecasting8ets a retailer estimate expected future sales for a given timeperiod.

Sales Opportunity Grid-ates the promise of new goods, services, procedures, andorstore outlets across a variety of criteria.

Sales("roducti!ity RatioA method for assigning floor space on the basis of sales orprofit per foot.

Sales "ro$otion#ncompasses the paid marketing communication activities other thanadvertising, public relations, and personal selling that stimulate consumer purchases anddealer effectiveness.

Saturated Trading AreaA geographic area having a proper amount of retail facilities tosatisfy the needs of its population for a specific good or service, as well as to let retailersprosper.

SB#See )econdary 0usiness District.

Scenario Analysis8ets a retailer pro(ect the future by examining the key factors that will

affect its long"run performance and then preparing contingency plans based on alternatescenarios.

Scra$%led +erchandising9ccurs when a retailer adds goods and services that areunrelated to each other and to the firm/s original business.

Secondary Business #istrict 0SB#2An unplanned shopping area in a city or town that isusually bounded by the intersection of two ma(or streets. *t has at least a (uniordepartment store, a variety store, andor some larger specialty stores "" in addition tomany smaller stores.

Secondary #ataThose that have been gathered for purposes other than addressing theissue or problem currently under study.

Secondary Trading AreaA geographic area with an added > percent to => percent of astore/s customers. *t is located outside a primary trading area, and customers are morewidely dispersed.

Selecti!e #istri%utionTakes place when suppliers sell through a moderate number ofretailers. This allows suppliers to have higher sales than in exclusive distribution and letsretailers carry some competing brands.


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Self(&ulfill$entA life"style concept whereby people express their growing sense ofuniqueness through goods and services purchases.

Selling Against the BrandThe practice of retailers carrying manufacturers/ brands andplacing high prices on them so rival brands 2such as private"label goods3 can be soldmore easily.

Selling SpaceThe area set aside for displays of merchandise, interactions betweensalespeople and customers, demonstrations, and so on.

Se$antic #ifferentialA disguised or nondisguised survey technique, whereby arespondent is asked to rate one or more retailers on several criteria each criterion isevaluated along a bipolar ad(ective scale.

Separate Store Organi4ationTreats each branch as a separate store with its own buyingresponsibilities. 1ustomer needs are quickly noted, but duplication by managers in themain store and the branches is possible.

Ser!ice Blueprint)ystematically lists all the service functions to be performed and theaverage time expected for each one/s completion.

Ser!ice Retailing*nvolves transactions between companies or individuals and finalconsumers where the consumers do not purchase or acquire ownership of tangibleproducts. *t encompasses rented goods, owned goods,

Total Retail Glossary

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