Marketing 4250 (Retail Marketing Mizzou) Exam 1 Chapter 1-5

Retailing

Adding value to products sold to customers. This is not always in stores

Retailer

seller of goods and services to customers. A middle man between manufacturer and customer that adds value to the products.

Breaking Bulk

The idea that manufacturers sell to retailers in large quantities, and then the retailers divide the orders into smaller ones that better fit customer needs.

Vertical Integration

the combination in one company of two or more stages of production normally operated by separate companies. Like when a steel mill also owns the iron mine.

Backward Integration

refers to the process in which a company purchases or internally produces segments of its supply chain. In other words, it is the acquisition of controlled subsidiaries aimed at the creation or production of certain inputs that could be utilized in the production. Amazon becoming a publisher and book store.

Forward Integration

is a business strategy that involves a form of vertical integration whereby business activities are expanded to include control of the direct distribution or supply of a company's products. This type of vertical integration is conducted by a company moving down the supply chain.

intratype competition

competition between the same type of retailers

scrambled merchandising

offering several unrelated product lines in a single store, this allows intratype competition to gain advantages.

1,100,000

The amount of retailers in the united states.

NAICS (North American Industry Classification System)

system of classification to harness business data. Stores are assigned codes based on what merchandise they carry.

Variety (Breadth)

Number of different merchandising categories within a store.

Assortment (Depth)

The number of SKUs within an individual category.

SKU (Stock Keeping Unit)

A distinct type of item for sale. An individual unique item used in inventory.

Inventory Costs

Stocking a high variety and assortment leads to high _________.

power perimeter

The idea that fresh products line the outerwalls of a supermarket. Like fruit and meat locations at walmart.

fair trade

trade in which fair prices are paid to producers, like liveable wages paid to supermarket employees and the unionization of them.

Category Killers

Retaielrs that offer a wide assortment in a small variety so that they can control an entire category. Also offer the lowest prices in that category. Staples in office supply is a good example, think how they killed Dunder Mifflin

Resale Stores

A type of specialty store retailer that acquires used goods and sells them for lower prices.

Thrift Store

A type of resale store in which the proceeds go to charity. St Vincent De Paul is an example. Do

Consignment Shop

Retail store where people sell or donates items and the company makes a profit. Goodwill is an example.

Dollar Store

Type of retailer that offers a wide variety but low assortment and charges very low prices, targeting lower income customers.

Showrooming

The idea that customers are coming into a retailer in order to see and feel a product, but that they will then go online and buy it at the lowest price possible.

Buying Process

a series of steps a customer goes through when making a purchase. Steps are as follows:

1 Need Recognition

2 Information Search

3 Evaluation of Alternatives

4 Purchase

5 Postpurchase Evaluation

Need Recognition

The first stage of the buying decision process, in which the consumer recognizes a problem or need

Information Search

the second stage of the buying process in which the consumer is motivated to search for more information

Unsatisfied Need

This is the initial trigger of the buying process

utilitarian need

a need that is rooted in some functional or practical benefit, like better gas mileage on a car.

hedonic need

need that relates to sensory pleasure, like status and power or adventure.

Internal Source

Source of information that comes from yourself like past experience.

External Sources

Source of information from anywhere not yourself.

Time Pressure and amount of brands

Two factors determining the size of the information search.

Evaluation of Alternatives

stage of the buying process where customers analyze product attributes, use cutoff criteria, rank attributes by importance

multiattribute attitude model

a model that combines a number of pieces of information about belief and evaluations of attributes of an object

consideration set

the set of alternatives a consumer considers when making a choice of what to purchase. If i want food, how many restaurants do i think of.

postpurchase evaluation

The stage of the buying process where a customer determines whether a purchase has been a satisfactory or unsatisfactory one

Retail Market Segments

A group of customers who are attracted to the same retail mix because they have similar needs.

actionable, identifiable, substantial, reachable

a retail market segement must be these 4 things:

actionable

Characteristic of a retail market segment that focuses on the idea that a retailer must be able to know how to satisfy the segment.

identifiable

characteristic of a retail market segment that focuses on the idea that a retailer must be able to easily identify that segment.

substantial

characteristic of a retail market segment that focuses on the idea that a retailer must be large enough in purchase power to justify targeting.

reachable

characteristic of retail market segment that focuses on the idea that a retailer can target it with promotions and other elements of the retail mix.

Retail Strategy

A statement that indicates a target market, a format and a plan for a retailer.

Target Market

one or more market segments toward which an organization directs its marketing program

sustainable competitive advantage

an advantage that cannot be copied by the competition

3 keys to sustainable competitive advantage

Building strong relationships with customers, suppliers and operating efficiently internally are...

Location

The most important factor determining what store a consumer uses

related diversification strategy

A corporate-level strategy through which a company expands its operations into areas that are similar to its existing operations, like charter expanding cable or internet operations.

unrelated diversification strategy

Corporate strategy in which a firm derives less than 70 percent of its revenues from a single business and there are few, if any, linkages among its businesses.

Strategic Planning Process

A 7 step process that retailers go through to select target markets, determine retailer format and build sustainable competitive advantage. Steps are:

1 Define Mission

2 Conduct SWOT

3 Identify strategic opportunities

4 Evaluate Strategic Opportunities

5 Establish Specific Objectives Allocate Resources

6 Develop Retail Mix to implement Strategy

7 Evaluate performance and adjust

Single-Channel Retailing

When a retailer sells and delivers merchandise through one channel, likely a brick and mortar store.

Cross-channel Retailing

The use of multiple channels to make a purchase, such as using an email coupon in store.

Omni-channel retailing

refers to a coordinated cross channel retail offering that that provides a seamless and synchronized customer experience using all the channels a company has.

Market Penetration Growth Opportunity

A growth opportunity directed toward existing customers using a retailers present retailing format. Example is opening more stores or expanding hours

market expansion growth opportunity

growth opportunity using the retailers existing format in a new market segment. Example is acquiring new stores that focus on different customer bases.