Retail Marketing Vocabulary Exam#1

Backward Intergration

A form of vertical integration in which a retailer owns some or all of its suppliers.

Breaking Bulk

A function performed by retailers or wholesalers in which they receive large quantities of merchandise and sell them in smaller quantities.

Conscious Retailing

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

Corporate Social Responsibility (CSR)

Voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operation and the concerns of its stakeholders.

Forward Intergration

A form of vertical integration in which a manufacturer owns wholesalers or retailers.

Holding Inventory

A major value-providing activity performed by retailers whereby products will be available when consumers want them.

Intertype Competition

Competition between retailers that sell similar merchandise using different formats, such as discount and department stores.

Intratype Competition

Competition between the same type of retailers (e.g., Kroger vs. Safeway).

Retail Analytics

The application of statistical data analysis techniques to improve retail decision making,

Retail Mix

The combination of factors used by a retailer to satisfy customer needs and influence their purchase decision; includes merchandise and service offered, pricing, advertising and promotions, store design and location, and visual merchandising.

Retail Strategy

A statement that indicates (1) the target market toward which a retailer plans to commit its resources, (2) the nature of the retail offering that the retailer plans to use to satisfy the needs of the target market, and (3) the bases on which the retailer will attempt to build a sustainable competitive advantage over.

Scrambled Merchandising

An offering of merchandise not typically associated with the store type, such as clothing in a drugstore.

Stakeholders

The broad set of people who might be affected by a firm’s actions, from current and prospective customers, to supply chain partners, to employees, to shareholders, to government agencies, to members of the communities in which the firm operates, and to society in general.

Supply Chain

A set of firms that make and deliver a given set of goods and services to the ultimate consumers.

Vertical Intergration

An example of diversification by retailers involving investments by retailers in wholesaling or manufacturing merchandise.

Wholesaler

Firm that buys products from manufacturing and resells them to retailers.

Breadth

The number of different merchandise categories within a store or department. Also known as variety.

Category Killer

A discount retailer that offers a narrow but deep assortment of merchandise in a category and thus dominates the category from the customers’ perspective. Also called category specialist.

Closeout

An offer at a reduced price to sell a group of slow-moving, discontinued, or end-of-season merchandise.

Consignment Shop

A store that sells used merchandise and reimburses the individuals who provide the items only after they sell.

Depth

The number of SKUs within a merchandise category. Also called assortment.

Durable Goods

Merchandise expected to last several years, such as appliances and furniture. Also known as hard goods.

Edge Computing

In this distribution computing design, necessary computation and data storage efforts take place in proximity to the location where these outputs are required, which shortens response times and makes more efficient use of required resources.

Exclusive Brand

A brand developed by a national brand vendor, often in conjunction with a retailer, and sold exclusively by the retailer.

Extreme-Value Food Retailer

A supermarket offering a limited number of SKUs. Also called limited assortment supermarket.

Extreme-Value Retailer

Small, full-line discount store that offers a limited merchandise assortment at very low prices. Also called dollar store.

Factory Outlet

Outlet store owned by a manufacturer.

Franchising

A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a retail outlet using a name and format developed and supported by the franchisor.

Full-Line Discount Store

Retailer that offers a broad variety of merchandise, limited service, and low prices.

Hypermarkets

Large stores, similar in design and size to supercenters; they carry both grocery and general merchandise categories, offer self-service, and are located in warehouse-type structures with large parking facilities.

Irregular

Merchandise that has mistakes in construction.

North American Industry Classification System (NAICS)

Classification of retail firms into a hierarchical set of six-digit codes based on the types of products and services they produce and sell.

Private-Label Brand

Products developed and marketed by a retailer and available for sale only by that retailer. Also called store brand, house brand, or own brand.

Resale Store

Retailer that sells secondhand or used merchandise.

Service Provider

Organization that offers consumers services rather than merchandise. Examples include banks, hospitals, health spas, doctors, legal clinics, entertainment firms, and universities.

Soft Goods

Merchandise with a relatively short life span, such as clothing or cosmetics.

Specialty Store

A type of store concentrating on a limited number of complementary categories and providing a high level of service.

Standard Industrial Classification (SIC)

A standard system that reflects government classification of industries, using four-digit codes. It was established in the United States in 1937 but has been used worldwide.

Stock-Keeping Unit (SKU)

The smallest unit available for keeping inventory control. In soft-goods merchandise, an SKU usually means a size, color, and style.

Warehouse Club

A retailer that offers limited assortment of food and general merchandise with little service and low prices to ultimate consumer and small businesses.

Wholesale-Sponsored Voluntary Cooperative Group

An organization operated by a wholesaler offering a merchandising program to small, independent retailers on a voluntary basis.

Bounce Rate

Estimated number or percentage of total visitors who leave after any particular page (usually the launch page) on a website.

Click Path

The order of the clicks used by a customer to navigate through a website.

Conversion Rate

Percentage of consumers who buy the product after viewing it.

Crowdsourcing

A task method that solicits contribution, whether for remuneration or not, from many participants online, such that a large group provides inputs or completes assigned tasks.

Earned Media

Media exposures that the firm has received without any effort or resource expenditure on its part.

Keyword Analysis

A method of assessment that seeks to determine which keywords effectively attract visitors to a site, whether organically or through paid search links.

Owned Media

Media exposures that are controlled and paid for by the firm, such as its e-commerce websites, blogs, social media pages, email marketing messages, or mobile apps.

Paid Media

Media that the firm has paid to obtain, such as conventional television or print advertising, advertisements pushed through social media, or paid endorsements by celebrities or influencers.

Push Notification

Message sent automatically to app users, regardless of whether or not they have the app open.

Return on Investment

Profit earned due to an investment, divided by the cost of that investment.

Search Engine Marketing (SEM)

Methods that marketers use to improve the visibility of their websites.

Search Engine Optimization (SEO)

Designing websites content to improve the positioning of the site on search engine results pages.

Sentiment Analysis

Assessments that monitor social media to determine how customers view the firm.

Automated Retailing

A retail channel in which merchandise or services are stored on a machine and dispensed and dispensed to customers when they deposit cash or use a credit card.

Catalog Channel

A nonstore retailer that communicates directly with customer using catalogs sent through the mail.

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.

Cross-Channel Retailing

A type of marketing channel in which customers use multiple channels to make purchases, such as when they receive an emailed coupon, download it onto their smartphone, and then go to a store redeem the coupon and buy the product.

Multichannel Retailing

Selling merchandise or services through more than one channel.

Omnichannel Retailing

Coordinated multichannel retail offering that ensures a seamless customer experience across all the retailer’s channels.

Retail Channel

The means by which a retailer sells and delivers merchandise t customers.

Single-Channel Retailing

Selling merchandise or services through inly one channel.

Social Retailing

Conducting purchase transactions through a social media site.

Benefit Segment

A method of segmenting a retail market on the basis of similar benefits sought in merchandise or services.

Brand Loyalty

Indicates customers like and consistently buy a specific brand in a product category. They are reluctant to switch to other brands if their favorite brand isn’t available.

Buying Process

The stages customers go through to purchase merchandise are service.

Buying Situation

A method of segmentation a retail market based on customer needs in a specific buying situation, such as a fill-in shopping trip vs. a weekly shopping trip.

Composite Segmentation

A method of segmenting a retail market using multiple variables, including benefits sought, lifestyles, and demographics.

Consideration Set

The set of alternatives the customer evaluates when making a merchandise selection.

Conversion Rate

Percentage of consumers who buy the product after viewing it.

Demographic Segmentation

A method of segmenting a retail market that groups consumers on the basis of easily measured, objective characteristics such as age, gender, income, and education.

Geodemographic Segmentation

A market segmentation system that uses both geographic and demographic characteristics to classify consumers.

Geographic Segmentation

Segmentation of potential customers by where they live. A retail market can be segmented by countries, states, cities, and neighborhoods.

Habitual Decision Making

A purchase decision involving little or no conscious effort.

Hedonic Need

A need motivating a consumer to go shopping for pleasure.

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 some prior experience with the product or service and their risk is moderate.

Postpurchase Evaluation

The evaluation of merchandise or service after the customer has purchased and consumed them.

Psychographic Segmentation

A method of segmenting customers based on how they spend their time and money, what activities they pursue, and their attitudes and opinions about the world in which they live.

Retail Market Segment

A group of customers whose needs will be satisfied by the same retail offering because they have similar needs and go through similar buying process.

Cross-Selling

When sales associates on one department attempt to sell complementary merchandise from other departments to their customers.

Customer Relationship Management (CRM)

The set of activities designed to identify and build the loyalty of the retailer’s most valuable customers. Also called ‘loyalty’ or ‘frequent-shopper program’

Franchising

A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a retail outlet using a name and format developed and supported by the franchisor.

Private-Label Brand

Products developed and marketing by a retailer and available for sale only by that retailer. Also called ‘store brand’, ‘house brand’, or ‘own brand’.

SWOT Analysis

An assessment of the retailer’s internal and external environment, as represented by strengths, weaknesses, opportunities, and threats.

Target Market

The market segment(s) toward which the retailer plans to focus its resources and retail mix.

Vertical Integration

An example of diversification by retailer involving investments by retailers in wholesaling or manufacturing merchandise.