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Retail Strategy

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Overall plan guiding a retail firm. It influences the firm's business activities and its response to market forces, such as competition and the economy.

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Situation Analysis

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Candid evaluation of the opportunities and threats facing a prospective or existing retailer.

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Opportunities

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Marketplace openings that exist because other retailers have not yet capitalized on them.

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Threats

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Environmental and marketplace factors that can adversely affect retailers if they do not react to them (and sometimes, even if they do).

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Organizational Mission

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Retailer's commitment to a type of business and a distinctive marketplace role. It is reflected in the attitude to consumers, employees, suppliers, competitors, government, and others.

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Sole Proprietorship

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Unincorporated retail firm owned by one person.

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Partnership

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Unincorporated retail firm owned by two or more persons, each with a financial interest.

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Corporation

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Retail firm that is formally incorporated under state law. It is a legal entity apart from individual officers (or stockholders).

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Goods/Service Category

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Retail firm's line of business.

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Objectives

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Long-term and short-term performance targets that a retailer hopes to attain. Goals can involve sales, profit, satisfaction of publics, and image.

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Image

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Represents how a given retailer is perceived by consumers and others.

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Positioning

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Enables a retailer to devise its strategy in a way that projects an image relative to its retail category and its competitors, and elicits consumer responses to that image.

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Mass Merchandising

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Positioning approach whereby retailers offer a discount or value-oriented image, a wide and/or deep merchandise selection, and large store facilities.

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Niche Retailing

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Enables retailers to identify customer segments and deploy unique strategies to address the desires of those segments.

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Bifurcated Retailing

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Denotes the decline of middle-of-the-market retailing due to the popularity of both mass merchandising and niche retailing.

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Target Market

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Customer group that a retailer seeks to attract and satisfy.

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Mass Marketing

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Selling goods and services to a broad spectrum of consumers.

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Concentrated Marketing

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Selling goods and services to one specific group.

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Differentiated Marketing

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Aims at two or more distinct consumer groups, with different retailing approaches for each group.

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Competitive Advantages

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Distinct competencies of a retailer relative to competitors.

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Controllable Variables

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Aspects of business that the retailer can directly affect (such as hours of operation and sales personnel).

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Uncontrollable Variables

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Aspects of business to which the retailer must adapt (such as competition, the economy, and laws).

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Tactics

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Actions that encompass a retailer's daily and short-term operations.

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Control

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Phase in the evaluation of a firm's strategy and tactics in which a semiannual or annual review of the retailer takes place.

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Feedback

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Signals or cues as to the success or failure of part of a retail strategy.

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Value

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Embodied by the activities and processes (a value chain) that provide a given level of value for the consumer - from manufacturer, wholesaler, and retailer perspectives. From the customer's perspective, it is the perception the shopper has of a value chain.

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Value Chain

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Total bundle of benefits offered to consumers through a channel of distribution.

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Core Customers

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Consumers with whom retailers seek to nurture long relationships. They should be singled out in a firm's data base.

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Expected Customer Service

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Level of service that customers want to receive from any retailer, such as basic employee courtesy.

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Augmented Customer Service

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Encompasses the actions that enhance the shopping experience and give retailers a competitive advantage.

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Employee Empowerment

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Way of improving customer service in which workers have discretion to do what they feel is needed - within reason - to satisfy the customer, even if this means bending some rules.

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Revolving Credit Account

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Allows a customer to charge items and be billed monthly on the basis of the outstanding cumulative balance.

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Option Credit Account

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Form of revolving account that allows partial payments. No interest is assessed if a person pays a bill in full when it is due.

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Open Credit Account

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Requires a consumer to pay his or her bill in full when it is due.

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Customer Satisfaction

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Occurs when the value and customer service provided through a retailing experience meet or exceed consumer expectations.

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Consumer Loyalty (Frequent Shopper) Programs

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Reward a retailer's best customers, those with whom it wants long-lasting relationships.

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Value Delivery System

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All the parties that develop, produce, deliver, and sell and service particular goods and services.

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Goods Retailing

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Focuses on the sale of tangible (physical) products.

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Service Retailing

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Involves transactions in which consumers do not purchase or acquire ownership of tangible products. It encompasses rented goods, owned goods, and nongoods.

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Rented-Goods Services

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Area of service retailing in which consumers lease and use goods for specified periods of time.

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Owned-Goods Services

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Area of service retailing in which goods owned by consumers are repaired, improved, or maintained.

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Nongoods Services

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Area of service retailing in which intangible personal services are offered to consumers - who experience the services rather than possess them.

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Electronic Banking

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Includes both automatic teller machines (ATMs) and the instant processing of retail purchases.

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Ethics

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Involves activities that are trustworthy, fair, honest, and respectful for each retailer constituency.

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Social Responsibility

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Occurs when a retailer acts in society's best interests - as well as its own. The challenge is to balance corporate citizenship with fair profits.

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Consumerism

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Involves the activities of government, business, and other organizations that protect people from practices infringing on their rights as consumers.

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Americans with Disabilities Act (ADA)

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mandates that persons with disabilities be given appropriate access to retailing facilities.

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Retailing

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Business activities involved in selling goods and services to consumers for their personal, family, or household use.

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Channel of Distribution

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All of the businesses and people involved in the physical movement and transfer of ownership of goods and services from producer to consumer.

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Sorting Process

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Involves the retailer's collecting an assortment of goods and services from various sources, buying them in large quantity, and offering to sell them in small quantities to consumers.

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Multi-Channel Retailing

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A distribution approach whereby a retailer sells to consumers through multiple retail formats (points of contact).

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Exclusive Distribution

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Takes place when suppliers enter agreements with one or a few retailers to designate the latter as the only firms in specified geographic areas to carry certain brands or product lines.

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Intensive Distribution

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Takes place when suppliers sell through as many retailers as possible. This often maximizes suppliers' sales and lets retailers offer many brands and product versions.

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Selective Distribution

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Takes place when suppliers sell through a moderate number of retailers. This lets suppliers have higher sales than in exclusive distribution and lets retailers carry some competing brands.

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Retail Strategy

answer

Overall plan guiding a retail firm. It influences the firm's business activities and its response to market forces, such as competition and the economy.

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Retailing Concept

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An approach to business that is customer-oriented, coordinated, value-driven, and goal-oriented.

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Total Retail Experience

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All the elements in a retail offering that encourage or inhibit consumers during their contact with a retailer.

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Customer Service

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Identifiable, but sometimes intangible, activities undertaken by a retailer in conjunction with the basic goods and services it sells.

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Relationship Retailing

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Exists when retailers seek to establish and maintain long-term bonds with customers, rather than act as if each sales transaction is a completely new encounter with them.

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Retail Institution

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Basic format or structure of a business. Institutions can be classified by ownership, store-based retail strategy mix, and nonstore-based, electronic, and nontraditional retailing.

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Independent

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Retailer that owns one retail unit.

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Ease of Entry

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Occurs due to low capital requirements and no, or relatively simple, licensing provisions.

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Chain

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Retailer that operates multiple outlets (store units) under common ownership. It usually engages in some level of centralized (or coordinated) purchasing and decision making.

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Franchising

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Contractual arrangement between a franchisor (a manufacturer, a wholesaler, or a service sponsor) and a retail franchisee, which allows the franchisee to conduct a given form of business under an established name and according to a given pattern of business.

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Product/Trademark Franchising

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Arrangement in which the franchisee acquires the identity of the franchisor by agreeing to sell the latter's products and/or operate under the latter's name.

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Business Format Franchising

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Arrangement in which the franchisee receives assistance in site location, quality control, accounting, startup practices, management training, and responding to problems - besides the right to sell goods and services.

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Constrained Decision Making

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Limits franchisee involvement in the strategic planning process.

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Leased Department

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Site in a retail store - usually a department, discount, or specialty store - that is rented to an outside party.

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Vertical Marketing System

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All the levels of independently owned businesses along a channel of distribution. Goods and services are normally distributed through one of three types of systems: independent, partially integrated, and fully integrated.

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Dual Marketing

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Involves firms engaged in more than one type of distribution arrangement. This enables those firms to appeal to different consumers, increase sales, share some costs, and maintain a good degree of strategic control.

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Channel Control

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Occurs when one member of a distribution channel can dominate the decisions made in that channel by the power it possesses.

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Consumer Cooperative

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Retail firm owned by its customer members. A group of consumers invests in the company, elects officers, manages operations, and shares the profits or savings that accrue.

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Strategy Mix

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Firm's particular combination of store location, operating procedures, goods/services offered, pricing tactics, store atmosphere and customer services, and promotional methods.

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Destination Retailer

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Firm that consumers view as distinctive enough to become loyal to it. Consumers go out of their way to shop there.

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Wheel of Retailing

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Theory stating that retail innovators often first appear as low-price operators with low costs and low profit margins. Over time, they upgrade the products carried and improve facilities and customer services. They then become vulnerable to new discounters with lower cost structures.

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Scrambled Merchandising

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Occurs when a retailer adds goods and services that may be unrelated to each other and to the firm's original business.

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Retail Life Cycle

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Theory asserting that institutions - like the goods and services they sell - pass through identifiable life stages: introduction (early growth), growth (accelerated development), maturity, and decline.

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Mergers

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The combinations of separately owned retail firms.

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Diversification

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Way in which retailers become active in business outside their normal operations - and add stores in different goods/service categories.

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Downsizing

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Unprofitable stores closed or divisions sold off by retailers unhappy with performance.

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Convenience Store

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Well-located food-oriented retailer that is open long hours and carries a moderate number of items. It is small, with average to above-average prices and average atmosphere and services.

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Supermarket

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Self-service food store with grocery, meat, and produce departments and minimum annual sales of $2 million. The category includes conventional supermarkets, food-based superstores, combination stores, box (limited-line) stores, and warehouse stores.

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Conventional Supermarket

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Departmentalized food store with a wide range of food and related products; sales of general merchandise are rather limited.

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Food-Based Superstore

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Retailer that is larger and more diversified than a conventional supermarket but usually smaller and less diversified than a combination store. It caters to consumers' complete grocery needs and offers them the ability to buy fill-in general merchandise.

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Combination Store

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Unites supermarket and general merchandise sales in one facility, with general merchandise typically accounting for 25 to 40 percent of total sales.

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Supercenter

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Combination store blending an economy supermarket with a discount department store.

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Hypermarket

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Combination store pioneered in Europe that blends an economy supermarket with a discount department store. It is even larger than a supercenter.

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Box (Limited-Line) Store

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Food-based discounter that focuses on a small selection of items, moderate hours of operation (compared to supermarkets), few services, and limited manufacturer brands.

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Warehouse Store

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Food-based discounter offering a moderate number of food items in a no-frills setting.

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Specialty Store

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Retailer that concentrates on selling one goods or service line.

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Category Killer (Power Retailer)

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Very large specialty store featuring an enormous selection in its product category and relatively low prices. It draws consumers from wide geographic areas.

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Department Store

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Large store with an extensive assortment (width and depth) of goods and services that has separate departments for purposes of buying, promotion, customer service, and control.

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Traditional Department Store

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Type of department store in which merchandise quality ranges from average to quite good, pricing is moderate to above average, and customer service ranges from medium levels of sales help, credit, delivery, and so forth to high levels of each.

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Full-Line Discount Store

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Type of department store with a broad, low-priced product assortment; all of the range of products expected at department stores; centralized checkout service; self-service; private-brand nondurables and well-known manufacturer-brand durables; less fashion-sensitive merchandise; relatively inexpensive building, equipment, and fixtures; and less emphasis on credit.

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Variety Store

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Outlet that handles a wide assortment of inexpensive and popularly priced goods and services, such as apparel and accessories, costume jewelry, notions and small wares, candy, toys, and other items in the price range.

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Off-Price Chain

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Features brand-name apparel and accessories, footwear, linens, fabrics, cosmetics, and/or housewares and sells them at everyday low prices in an efficient, limited-service environment.

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Factory Outlet

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Manufacturer-owned store selling its closeouts, discontinued merchandise, irregulars, canceled orders, and, sometimes, in-season, first-quality merchandise.

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Membership (Warehouse) Club

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Appeals to price-conscious consumers, who must be members to shop.

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Flea Market

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Location where many vendors offer a range of products at discount prices in plain surroundings. Many flea markets are located in nontraditional sites not normally associated with retailing.

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Single-Channel Retailing

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A distribution approach whereby a retailer sells to consumers through one retail format.

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Multi-Channel Retailing

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Approach whereby a retailer sells to consumers through multiple retail formats (points of contact).

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Nonstore Retailing

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Utilizes strategy mixes that are not store-based to reach consumers and complete transactions. It occurs via direct marketing, direct selling, and vending machines.

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Direct Marketing

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Form of retailing in which a customer is first exposed to a good or service through a nonpersonal medium and then orders by mail, phone, or fax - and increasingly by computer.

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Data-Base Retailing

answer

Way to collect, store, and use relevant information on customers.

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Specialog

answer

Enables a retailer to cater to the specific needs of customer segments, emphasize a limited number of items, and reduce catalog production and postage costs.

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Infomercial

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Program-length TV commercial (most often, 30 minutes in length) for a specific good or service that airs on cable television or on broadcast television, often at a fringe time. It is particularly worthwhile for products that benefit from visual demonstrations.

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Direct Selling

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Includes both personal contact with consumers in their homes (and other nonstore locations such as offices) and phone solicitations initiated by a retailer.

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Vending Machine

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Format involving the cash- or card-operated dispensing of goods and services. It eliminates the use of sales personnel and allows around-the-clock sales.

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Internet

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Global electronic superhighway of computer networks that use a common protocol and that are linked by telecommunications lines and satellite.

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World Wide Web (Web)

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Way of accessing the Internet, whereby people work with easy-to-use Web addresses and pages. Users see words, colorful charts, pictures, and video, and hear audio.

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Video Kiosk

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Freestanding, interactive, electronic computer terminal that displays products and related information on a video screen; it often uses a touchscreen for consumers to make selections.

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A retail strategy consists of...

answer

situation analysis, objectives, identification of a customer market, broad strategy, specific activities, control, and feedback.

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A firm may pursue one or more of these objectives

answer

sales, profit, satisfaction of publics, and image/positioning.

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sales Objective

answer

growth, stability, and market share

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profit objectives

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level, return on investment, and efficiency

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satisfaction of publics

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stockholders, consumers, and others

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image/positioning objectives

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customer and industry perceptions

Retail Management: A Strategic Approach chp 1-6 – Flashcards

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