Retailing: Chapter 13

National Brand

A line of products designed, produced, and marketed by a vendor. Also called a manufacturer’s brand.

Umbrella Brand

A product’s brand name associated with the company’s name. Also called a family brand.

Subbrand

Part of a branding strategy in which a product’s brand name is associated with the description of the product, such as Frosted Flakes, where the family brand is Kellogg’s.

Store Brand

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

Premium Store Brand

A branding strategy that offers the consumer a private label at a comparable manufacturer-brand quality, usually with a modest price savings.

Exclusive Brand

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

Copycat Brand

A brand that imitates the manufacturer’s brand in appearance and packaging but generally is perceived as lower quality and is offered at a lower price.

Generic Brand

Unbranded, unadvertised merchandise found mainly in drugstores and grocery and discount stores.

Representative Heuristic

See something that looks/acts like something so it’ll be just like something else.

Wholesale Market

A concentration of vendors within a specific geographic location, perhaps even under one roof or over the Internet.

Trade Show

A temporary concentration of vendors that provides retailers opportunities to place orders and view what is available in the marketplace.

Reverse Auction

Auction conducted by retailer buyers. Known as a reverse auction because there is one buyer and many potential sellers. In reverse auctions, retail buyers provide a specification for what they want to a group of potential vendors. The competing vendors then bid down the price at which they are willing to sell until the buyer accepts a bid.

Resident Buying Offices

An organization located in a major buying center that provides services to help retailers buy merchandise.

Markdown Money

Funds a vendor gives the retailer to cover lost gross margin dollars that result from markdowns and other merchandising issues.

Slotting Allowance

Fee paid by a vendor for space in a retail store. Also called slotting fee.

Strategic Relationship

Long-term relationship in which partners make significant investments to improve both parties’ profitability. Also called partnering relationship.

Chargeback

A practice used by retailers in which they deduct money from the amount they owe a vendor.

Free on Board (FOB)- Origination

It’s free if you pick it up from the back door of the manufacturing plant.

Free on Board (FOB)- Destination

The delivery price is included in the price; they bring it to you.

Buyback

A strategy vendors and retailers use to get products into retail stores, either when a retailer allows a vendor to create space for goods by “buying back” a competitor’s inventory and removing it from a retailer’s system or when the retailer forces a vendor to buy back slow-moving merchandise. Also called a stocklift or lift-out.

Exclusive Dealing Agreements

Restriction a manufacturer or wholesaler places on a retailer to carry only its products and no competing vendors’ products.

Tying Contract

An agreement between a vendor and a retailer requiring the retailer to take a product it does not necessarily desire (the tied product) to ensure that it can buy a product it does desire (the tying product).

Counterfeit Merchandise

Goods that are made and sold without permission of the owner of a trademark, a copyright, or a patented invention that is legally protected in the country where it is marketed.

Gray-Market Goods

Merchandise that possesses a valid U.S. registered trademark and is made by a foreign manufacturer but is imported into the United States without permission of the U.S. trademark owner. Also called parallel imports.

Diverted Merchandise

Merchandise that is diverted from its legitimate channel of distribution; similar to gray-market goods except there need not be distribution across international boundaries.

Black Market

The availability of merchandise at a high price when it is difficult or impossible to purchase under normal market circumstances; commonly involves illegal transactions.

BATNA

Best Alternative to a Negotiated Agreement

Power

Coercive, Legitimate, Expertise, Referent, Reward.

Reward Power

If you do ‘x' for me, I will reward you with ‘y.’

Referent Power

If you play along, you can hang out with me. Prestige and good image.

Expertise Power

Knowledge you need to successful.

Legitimate Power

Structured around contracts.

Coercive Power

You will do this, otherwise you will suffer repercussions.

Awareness

Finding out and learning more about a partner in a strategic relationship.

Exploration

Starting to once in a while trade with the partner in a strategic relationship.

Expansion

Beginning to trade largely and establish as official partners in a strategic relationship.

Robinson-Patman Act

If you sell goods to two retailers, you must sell like quantity and like quality to each retailer at the same price.