CH 13

Retailing
Chapter 13
Prepared by
Deborah Baker
Texas Christian University
Chap. 13 Marketing 7e Lamb Hair McDaniel 1

©2004 South-Western College Publishing
Learning Objectives
1. Discuss the importance of retailing in the

U.S. 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.

Learning Objectives (continued)
7. Discuss the challenges of expanding

retailing operations into global markets.
8. Describe future trends in retailing.

1 Learning Objective
On Line
http://www.target.com
http://www.walmart.com
http://www.sears.com
Discuss the
importance of
retailing in the
U.S. economy.

1 Retailing
All the activities directly

related to the sale of goods
and services to the ultimate
consumer for personal,
non-business use.

1 The Role of Retailing
 Retailing is one of the largest

employers
 Retailers ring up almost a third of

the U.S. GDP
 Industry is dominated by a
few giant organizations,
such as Wal-Mart

Ten Largest
1
U.S. Retailers

Explain the
dimensions by
which retailers
can be classified.

2 Classification of Retail Operations
Ownership
Level of Service
Classification Product Assortment

of
Retail
Establishments Price

2 Classification of Ownership
Independent
Retailers
Chain Stores
Franchises

2 Level of Service
Self Service Full Service
Factory outlets Discount stores Exclusive stores

Warehouse clubs

Types of Stores and
2
Their Characteristics
Type of Retailer Service Assort- Gross
Price
Level ment Margin
Department Store Mod Hi-High Broad Mod-High Mod High
Specialty Store High Narrow Mod-High High
Supermarket Low Broad Moderate Low
Convenience Store Low Med-Narrow Mod High Mod High
Drugstore Low-Mod Medium Moderate Low
Full-line Discounter Mod-Low Med-Broad Mod Low Mod Low
Specialty Discounter Mod-Low Med-Broad Mod Lo-low Mod Low
Warehouse Clubs Low Broad Low-lower Low
Off-price Retailer Low Med-Narrow Low Low
Restaurant Low-High Med-Narrow Low-High Low-High

2 Gross Margin
The amount of money the

retailer makes as a
percentage of sales after
the cost of goods sold is
subtracted.

Describe the major

types of retail
operations.

3 Major Types of Retail Operations
On Line
http://www.walgreens.com
Department Stores
Specialty Stores
Supermarkets
Drugstores
Convenience Stores
Discount Stores
Chap. 13 Marketing 7e Lamb Hair McDaniel Restaurants 16
3 Categories of Discount Stores
Full-Line
Discounters
Discount Specialty
Categories Stores
of Discount
Stores
Warehouse
Clubs
Off-Price
Discount Retailers
3 Mass Merchandising
Retailing strategy using

moderate to low prices on
large quantities of
merchandise and lower
service to stimulate high
turnover of products.

3 Hypermarket and Supercenter
A large retail store combining

Hypermarket a supermarket and
a full-line discount store.
Retail store combining groceries

Supercenter and general merchandise goods
with a wide range of services.

Discuss nonstore
retailing techniques.

4 Nonstore Retailing
Automatic Vending
Direct Retailing
Direct Marketing
Major Forms
of
Nonstore Electronic Retailing
Retailing
4 Direct Retailing
Direct Retailers
sell products:
Home Sales
Door-to-Door
Parties
Office-to-
Office

4 Direct Marketing
On Line
http://www.avon.com
Direct Mail
Types Catalogs & Mail Order

of
Direct
Marketing Telemarketing
Electronic Retailing

4 Electronic Retailing
On Line
http://www.gap.com
http://www.jcrew.com
Shop-at-Home Networks
Types
of
Electronic
Retailing
On-Line Retailing

Define franchising
and describe its two
basic forms.

5 Basic Forms of Franchising
On Line
http://www.sylvanlearning.com
Product and Trade Name

Franchising
Basic Forms
of
Franchising
Business Format
Franchising

5 Largest U.S. Franchisers

5 Basic Forms of Franchising
Product and Dealer agrees to sell certain

Trade Name products provided by a
Franchising manufacturer or wholesaler.
Business An ongoing business relationship

Format between a franchiser
Franchising and a franchisee.

List the major tasks

involved in
developing a retail
marketing strategy.

6 Retail Marketing Strategy
Define & Select

Key Tasks a Target Market
in
Strategic
Retailing
Develop the “Six Ps”

6 Defining a Target Market
Demographics
STEP 1:
Geographics
Segment the Market
Psychographics

6 Choosing the Retailing Mix
Product Place
STEP 2:
Choose the Price Personnel
Retailing Mix
Promotion Presentation

6 The Retailing Mix
Product
Personnel Promotion
Target
Market
Presentation Place
Price
6 Product Offering
On Line
http://www.kroger.com
The mix of products offered

to the consumer by the
retailer; also called the
product assortment or
merchandise mix.

6 Retail Promotion Strategy
Advertising
Public Relations
Publicity
Retail
Promotion
Strategy Sales Promotion

6 Factors to Consider in Site Selection
Economic growth
potential
Area competition
Geography

6 Location Decisions
On Line
http://www.mallofamerica.com
Freestanding Store
Shopping Center
Tenant
Mall Tenant

Shopping Center and
6
Mall Locations
Advantages Disadvantages
 Design attracts  Expensive leases

shoppers  Failure of common
 Activities and anchor promotion efforts
stores draw  Lease restrictions
customers
 Anchor store
 Ample parking domination
 Unified image  Direct competitors
6 Price
Low Price High Price
Good Value Quality

Image

6 Presentation of the Retail Store
Employee Type & Density
Merchandise Type & Density
Fixture Type & Density
Factors Sound
in
Creating Odors
Store’s
Atmosphere Visual Factors

6 Personnel and Customer Service
Trading Up
Two Common
Selling
Techniques
Suggestive Selling

Customer Service for
6
On-Line Retailers
Easy-to-use Web Site
Product Availability
Simple Returns

Discuss the
challenges of
expanding retailing
operations into
global markets.

The Top Ten
7
Global Retailers

7 Global Retailing
Reasons for
Global Expansion
Spread of Growth potential

communication in underserved
and mass media markets
Lowering of trade
barriers and
tariffs
Factors Used to Analyze
7
Global Retail Markets
Market Size & Economics
Infrastructure & Distribution
Competition
Operations
Financial & Tax Reporting
Merchandise Acceptability
Partnering Capability
7 Global Retailing
On Line
http://www.walmartstores.com
Secure
Domestic
Position
Prerequisites for
Going Global
Long-Term
Perspective
Consistent
Global and
Corporate
Strategies
Describe future
trends in retailing.

8 Trends in Retailing
Entertainment
Trends in Convenience
Retailing and Efficiency
Customer Management

8 Customer Management Strategies
Customer Relationship
Marketing
Loyalty
Programs
Clienteling


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Retailing

Chap. 13 Marketing 7e Lamb Hair McDaniel 1

1. Discuss the importance of retailing in the

2. Explain the dimensions by which retailers

3. Describe the major types of retail

Chap. 13 Marketing 7e Lamb Hair McDaniel 2

4. Discuss nonstore retailing techniques.

5. Define franchising and describe its two

6. List the major tasks involved in developing

Chap. 13 Marketing 7e Lamb Hair McDaniel 3

7. Discuss the challenges of expanding

8. Describe future trends in retailing.

Chap. 13 Marketing 7e Lamb Hair McDaniel 4

Chap. 13 Marketing 7e Lamb Hair McDaniel 5

All the activities directly

Chap. 13 Marketing 7e Lamb Hair McDaniel 6

 Retailing is one of the largest

 Retailers ring up almost a third of

Chap. 13 Marketing 7e Lamb Hair McDaniel 7

Chap. 13 Marketing 7e Lamb Hair McDaniel 8

Chap. 13 Marketing 7e Lamb Hair McDaniel 9

Classification Product Assortment

Chap. 13 Marketing 7e Lamb Hair McDaniel 10

Chap. 13 Marketing 7e Lamb Hair McDaniel 11

Self Service Full Service

Factory outlets Discount stores Exclusive stores

Chap. 13 Marketing 7e Lamb Hair McDaniel 12

Chap. 13 Marketing 7e Lamb Hair McDaniel 13

The amount of money the

Chap. 13 Marketing 7e Lamb Hair McDaniel 14

Describe the major

Chap. 13 Marketing 7e Lamb Hair McDaniel 15

Retailing strategy using

Chap. 13 Marketing 7e Lamb Hair McDaniel 18

A large retail store combining

Retail store combining groceries

Chap. 13 Marketing 7e Lamb Hair McDaniel 19

Chap. 13 Marketing 7e Lamb Hair McDaniel 20

Chap. 13 Marketing 7e Lamb Hair McDaniel 22

Types Catalogs & Mail Order

Chap. 13 Marketing 7e Lamb Hair McDaniel 23

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Chap. 13 Marketing 7e Lamb Hair McDaniel 25

Product and Trade Name

Chap. 13 Marketing 7e Lamb Hair McDaniel 26

Chap. 13 Marketing 7e Lamb Hair McDaniel 27

Product and Dealer agrees to sell certain

Business An ongoing business relationship

Chap. 13 Marketing 7e Lamb Hair McDaniel 28

List the major tasks

Chap. 13 Marketing 7e Lamb Hair McDaniel 29

Define & Select

Chap. 13 Marketing 7e Lamb Hair McDaniel 30

Chap. 13 Marketing 7e Lamb Hair McDaniel 31

Chap. 13 Marketing 7e Lamb Hair McDaniel 32

The mix of products offered

Chap. 13 Marketing 7e Lamb Hair McDaniel 34

Chap. 13 Marketing 7e Lamb Hair McDaniel 35

Chap. 13 Marketing 7e Lamb Hair McDaniel 36

Chap. 13 Marketing 7e Lamb Hair McDaniel 37

 Design attracts  Expensive leases

Low Price High Price

Good Value Quality