Retail Marketing Exam 1 – Chapter Questions – Flashcards

Much more than just the sale of products in stores. There are many different business activities that happen "behind the scenes" to add value to the products and services sold to the end consumer.

Retailers are the final business within a supply chain which links manufacturers to consumers. Retailers add value through: -Providing Assortment: Consumers can buy other products at the same time -Breaking Bulk: Consumers can buy products in the quantities they want, not just in bulk -Holding inventory: Consumers can buy a product at a convenient place WHEN they want it - the store keeps a reasonable stock of merchandise -Offering Services: Consumers value services like layaway, credit, seeing a product before purchasing, and personal shopping assistance from workers

Retail Sales: -over $5.2 trillion in annual U.S. sales in 2014 -2/3 U.S. GDP comes from retail Employment: -Supports 42 million jobs in U.S. -one of the largest sectors for job growth in U.S. Social Responsibility Global Player (?)

-entry level management positions -manage and have P&L responsibility on your first job -starting pay avg. with great benefits -some retailers pay graduate school

Strategic vs. tactical decisions Strategic -made infrequently -long-term -require significant investment -not easily reversed -ex: location, organization design, information and distribution systems, customer service Tactical -day-to-day decisions

Food retailers dominate as top retailers in the U.S.

Social & Political Objectives Geography Market Size

Competition from discount stores -Efficient distribution -lower costs -lower prices Changing Consumption patterns -Time pressure -Eating out more -meal solutions

Supermarkets Supercenters Warehouse Clubs Hypermarkets Convenience Stores Department Stores Full-Line Discount Stores Specialty Stores Drugstores Category Specialists Off-Price retailers

Retailers use different retail mixes. Differences in variety, assortment, SKU as well as choices to be made about trade-offs (ex: lower costs or higher customer service)

Service retailers face these issues: -Intangibility of product causes problems in evaluating the quality and performance -Simultaneous production and deliver -Perishability -Inconsistency of the offering (importance of HR management)

-Independent, single store establishments -Corporate retail chains -Franchises

The most basic characteristics of a retailer. the elements used to satisfy its customers' needs. Four elements: 1. The type of merchandise sold 2. The variety and assortment of merchandise sold 3. The level of customer service 4. The price of the merchandise

Stores -Touching & Feeling -Personal service -Risk reduction -Immediate gratification -Entertainment and social interaction -Browsing -Cash payment Catalogs -Safety -Convenience -Ease of use Internet -Safety -Convenience -Broad and deep assortment -Extensive and timely information -Personalization

Customers want to interact in different ways. Each channel offers a unique set of benefits for customers. Consumers buy what they want, when they want, wherever they want.

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Information search

Types of needs -Utilitarian needs - satisfied when purchases accomplish a specific task -Hedonic needs - satisfied when purchases accomplish a need for entertainment, emotional, and recreational experience as in department stores or specialty stores Conflicting needs -Customers make trade-offs between their conflicting needs Sources of Information -Internal - past experiences, memory -External - consumer reports, advertising, word of mouth Reference groups -one or more people whom a person uses as a basis of comparison for beliefs, feelings and behaviors Culture Family

-increase performance beliefs of your store -decrease performance beliefs about competitors -increase importance weight of attributes on which you have an advantage -add a new benefit on which you excel

Geographic -groups customers according to where they live Demographic -groups consumers on the basis of easy measured, objective characteristics such as age, gender, income, and education Geodemographic -uses both geographic and demographic characteristics to classify customers Lifestyle or psychographics -refers to how people live, how they spend their time and money, what activities they pursue, and their attitudes and opinions about the world in which they live Benefit -groups customers seeking similar benefits retail market -when a retailer caters their assortment to a specific group of customers

A statement identifying: -retail target market -format to satisfy market need -bases upon which retailer will build a sustainable competitive advantage

examples... -location -customer loyalty -customer service -exclusive merchandise -low cost supply chain management -information systems -buying power with vendors -committed employees SIMPLY LOWERING PRICES IS NOT SUSTAINABLE

1. Define the business mission 2. Conduct a situation audit 3. Identify strategic opportunities 4. Evaluate strategic alternatives 5. Establish specific objectives and allocate resources 6. Develop a retail mix to implement strategy 7. Evaluate performance and make adjustments

-market penetration -market expansion -retail format development -diversification