Retail industry exam 1

retailing

The set of business activities that adds value to products and services sold to consumers for their personal or family use

how do retailers create value

• providing an assortment of products and services

• breaking bulk

• holding inventory

• providing services

how retailers function as wholesalers

Wholesalers buy and store merchandise in large quantities from manufacturers and then resell the merchandise to retailers

vertical integration

that a firm performs more than one set of activites in the channel, as occurs when a retailer engages in wholesaling activites by operating its own distribution centers to supply its stores

corporate social responsibility

an organization voluntarily engaging in buisness practices that meet or exceed the ethical and legal expecatations of its stakeholders

conscious marketing

entails a sense of purpose for the firm, higher than simply making a profit by selling products and services

intratype competition

A reatiler’s primary competitors are other retailers that use the same retail approachcrambled merchandisings

scrambled merchandising

when retailers offer merchandise not typically associated with their type of store

• increases intertype competition

retail strategy

1. identifies the target market, towards which the retailer willd direct its efforts

2. the nature of the merchandise and services the retailer will offer to satisfy the needs of the target market

3. how the retailer will develop unique assets that enable it to achieve long term advantage over its competitors

retail mix

a set of decisions retailers make to satisfy customer needs and influence their purchase decisions

a retailers role in a supply chain

add value to products and services sold to customers

assortment

• also called depth

  The number of different items offered in a merchandise category

variety

• also called breadth

the number of merchandise categories a retailer has to offer

warehouse clubs

• are large and typically located in low-rent distracts

• aisles are wide so that forklifts can pick up pallets of merchandise and arrange them on selling floor

• little service is offered

• offer low prices because they use low-cost locations, have inexpensive store design

• buy merchandise opportunilistically

department stores

retailers that carry a broad variety and deep assortment, offer customer service, and organize their stores into distinct department for displaying merchandise.

• often resemble a collection of specialty shops

off price retailers

offers an inconsistent assortment of brand-name merchandise at a significant discount off the manufactures suggested reatil price

• ex: TJ Maxx, marshalls, Home Goods

extreme value retailers

• also called dollar stores

  small scout stores that offer a broad variety but shallow assortment of household goods, health and beauty care products, and groceries.

drugstore

specialty stores that concentrate on health and beauty care products.

full-line discount stores

reatilers that offer a broad variety of merchandise, limited service and low prices.

ex: walmart, target, and Kmart

category specialist

big-box stores that offer a deep assortment but a narrow variety of merchandise.

• Use a self-service approach, but they offer assistance to customers in some areas of the store.

• also called category killers because they can dominate a category of merchandise making it difficult for other retailers to compete

specialty stores

concentrate on a limited number of complementary merchandise categories and provide a high level of service

ex: abercombie and fitch, apple, Tiffany and co, sephora

difference between service and merchandise retailers

1. intangability

2. simultaneous production and consumption

3. perishability

4. inconsistency of the offering to customers

single store retailers

tailor their offerings to their customers need,

corporate retail chain

a company that operates multiple retail units under common ownership and usually has centralized decision-making for defining and implementing its strategy

franchising

a contractual agreement in which the franchisor sells the rights to use its business trademark, service mark, or trade name, or another commercial symbol of that company, to the franchise for a one-time franchise fee and ongoing royalty fee that is expressed as a percentage of gross monthly sales

North American Indusry classification system

• was created to collect data on business activity in Canada, the United States, and Mexico

multichannel retailing

when retailers offer more than one chance to sell and deliver merchandise and services to consumers. They operate without integrating operations between them

Omnichannel retailing

refers to a coordinated multichannel retail offering that provides a seamless and synchronized customer experience, using all of the retailers shopping channels. these various channels run in collaboration and effectively ensure that the customer is the center of the retail managament process.

in store retailing

• touch and smell of products\

• personal service

• risk reduction

• immediate gratification

• entertainment and social experience

• cash payment

internent retailing

involves retailers interacting with consumers through the internet

mobile retailing

accessing the internet using a tablet or iPhone. They produce a different interface experience with the user

social retailing

involves conducting purchase transactions through a social media site.

catalog channel

a nonstore retail channel in which the retail offering is communicated to customers through a catalog mailed to customers.

direct selling

a retail channel in which salespeople interact with customers face-to-face in a convenient location, either at the customer’s home or at work. They demonstrate merchandise benefits and explain the service, take an order, and deliver merchandise

automated retailing

retailing channel in which merchandise or services are stored in a machine and dispensed to customers when they deposit cash or use a credit vard

• also known as vending machines

multichannel and omnichannel opportunites and challenges

can struggle to provide an integrated shopping experience because the various channels demand various skills as well as unique resources.

channel migration

a customer practice in which customers search for information from a retailer’s channel, then purchase in a different channel maintained by a competitor

showrooming

occurs when a consumer goes into a store to learn about different brands and products, and then searches the internet for the same product sold at a lower price.

• retailers can reduce showrooming and channel migration by promoting private label merchandise that can be purchased only from the retailer

utiliarian

a style of clothing characterized by functionality, practicality

hedonic

consumers go shopping for their needs for entertaining, emotional, and recreational experiences

multi attribute model

based on the notion that customers see a retailer, a product, or a channel as a collection of attributes or characteristics. This model is designed to predict a customer’s evaluation of a product on the basis of its performance on relevant attributes and the importance of those attributes to the customers

extended problem solving

a purchase decision process in which customers devote considerable time and effort to analyze their alternatives

limited problem solving

a purchase decision process involving a moderate amount of effort and time. Customers engage in this type of buying process when they have had some prior experience with the product or service

habitual decision making

a purchase decision process involving little or no conscious effort

impulse buying

A buying decision made by customers on the spot after seeing the merchandise. Using prominent point-of-purchase displays to attract customers’ attention

brand loyalty

means that customers like and consistently buy a specific brand in a product category. They are reluctant to switch to other brands

evaluating market segments

actionable

identifiable

substantial

reachable

geographic

group customers according to where they live. Can be separated by countries or states, cities, or neighborhoods, because customers typically shop at stores convenient to where they live and work

demographic

groups consumers on the basis of easily measured, objective characteristics such as age, gender, income, and education.

geodemographic

use both geographic segmentation and demographic characteristics to classify consumers. This segmentation scheme is based on the principle that birds of a feather flock together; consumers in the same neighborhood buy the same things.

psychographic

method of segmenting customers based on how they spend their time and money, what activites they pursure, and their attiudes and opinions about the world.

buying situation

The buying behavior of customers with the same demographics or lifestyle can differ depending on their buying situation.

benefit

defining a target segment is to group customers seeking similar benefits