Retail Marketing Exam 3: Flashcard Study Guide

Flashcards covering key concepts from Retail Marketing, including merchandise management, buying merchandise, pricing strategies, communication, and customer service.

Merchandise Management

Process by which a retailer offers the appropriate quantity of the right merchandise, in the right place, and at the right time.

GMROI

Gross Margin Return on Investment; a ratio measuring the gross margin dollars earned for every dollar invested in inventory.

Inventory Turnover

Net Sales divided by Average Inventory at Retail; measures how quickly inventory is sold and replaced.

Staple Merchandise

Categories in continuous demand over an extended period; easy to forecast.

Fashion Merchandise

Categories in demand for a relatively short period of time; forecasting is complex.

Buffer (Backup) Stock

Extra inventory kept to prevent stockouts caused by fluctuations in demand or supply.

National Brands

Products produced and marketed by a vendor and sold by many different retailers.

Private Label (Store) Brands

Products developed and marketed by a retailer available only from that retailer.

Chargebacks

Deductions a retailer makes from the amount they owe a vendor, often for vendor errors.

Buybacks

When a retailer forces a vendor to buy back slow-moving merchandise or a vendor buys a competitor's stock.

Tying Contract

Agreement where a vendor requires a retailer to take an unwanted product to get one they want.

Price Elasticity

Measure of customer price sensitivity; (Inelastic = insensitive, Elastic = sensitive).

EDLP (Everyday Low Pricing)

Strategy stressing continuity of retail prices at a level between regular and deep-discount prices.

High/Low Pricing

Strategy where prices are higher than EDLP competitors but frequent sales lower prices.

Leader Pricing

Pricing certain items lower than normal to increase traffic and boost sales of complementary goods.

Markdown (Clearance)

Permanent price reduction to move slow-selling or obsolete merchandise.

Markdown (Promotional/POS)

Temporary price reduction for a specific event, reverting to normal after the sale.

IMC (Integrated Marketing Communications)

Providing a consistent message across all communication channels used by the retailer.

Paid Media

Communication for which the retailer pays a fee, such as TV ads or Search Engine Ads.

Earned Media

Exposure gained through word-of-mouth, PR, or viral content not directly paid for.

Shrinkage

The difference between book inventory and physical inventory, caused by theft or error.

Intrinsic Rewards

Non-monetary rewards such as a feeling of accomplishment or personal growth.

Standardized Service

Service based on rules and procedures to ensure consistency and lower costs.

Personalized Service

Service tailored to meet each customer's specific needs; higher cost but higher benefit.

Knowledge Gap

Difference between customer expectations and the retailer's perception of those expectations.

Standards Gap

Difference between the retailer's knowledge of customer expectations and the service standards it sets.

Delivery Gap

Difference between the retailer's service standards and the actual service provided.

Communication Gap

Difference between the service provided and the service promised by the retailer's promotion.