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Chapter 2,Types of Retailers,2-2,Retailer characteristics,Types of merchandiseVariety and assortmentService offeredPrices and the cost of offering breadthand depth of merchandise and services,2-3,NAICS Codes for Retailers,2-4,Merchandise Offering,Variety (breadth of merchandise) The number of merchandise categoriesAssortment (depth of merchandise)The number of items in a category (SKUs),Stockbyte/Punchstock Images,Jack Star/PhotoLink/Getty Images,C Squared Studios/Getty Images,Royalty-Free/CORBIS,Royalty-Free/CORBIS,Royalty-Free/CORBIS,Royalty-Free/CORBIS,2-5,Retail Mix,Retail Strategy,Customer Service,Location,MerchandiseAssortment,Pricing,Communication Mix,Store Designand Display,2-6,Food RetailersMom and Pop storesConvenience StoresSupermarketsSupercentersWarehouse club,General Merchandise RetailersDepartment StoresSpecialty StoresDiscount StoresCategory SpecialistsOff-Price RetailersDrug storeExtreme value retailers,Types of Retailers,2-7,Food Retailers,Primary Shopping Format for Food Sales Growth Rates by Retail Format,2-8,Characteristics of Food Retailers,2-9,Food Retailers,Supermarkets -Cars, highways and TV to build brands -Knowledgeable customers self service -Perishable vs. packaged goodsBig Box Retailers -Warehouse Clubs -Supercenters -Hypermarkets Convenience Stores,2-10,Conventional Supermarket,Emphasize Fresh PerishablesTarget health conscious and ethnic consumersProvide a better in-store experienceOffer more private label brands,2-11,Limited Assortment Supermarkets,Save-A-Lots limited assortment formatmeans that stores carry the mostfrequently purchased grocery items inthe most popular size and varietyThe company carries high qualityexclusive brands many produced by thesame manufacturers of leading namebrands and an assortment of nationallybranded items.This allows Save-A-Lot to offer savings of up to 40% compared to conventional grocery stores without asking shoppers to sacrifice quality.,Used by permission of Save-A-Lot,2-12,Convenience Stores Fight Competition,Stores are more convenient to shopOffers fresh foodFast, casual restaurantsFinancial services availableOpening smaller stores closer to consumers like airports,2-13,Types of General Merchandise Retailers,Department StoresSpecialty StoresCategory SpecialistsHome Improvement CentersDiscount StoresDrugstoresOff-Price retailersExtreme Value Retailers,2-14,Characteristics of General Merchandise Retailers,2-15,Issues in Department Store Retailing,Competition -Discount Stores on Price -Specialty Stores on Service, Depth of AssortmentLower Cost by Reducing Services (?) -Centralized Cash WrapsMore Sales (?) -Customers Wait for SaleFocus on Apparel and Soft HomeDevelop Private Labels and Exclusive Brands,2-16,Three Tiers of Department Stores,First Tier: upscale, high fashion chains with exclusive designer merchandise and excellent customer service.Example: Nordstrom, Neiman Marcus, Bloomingdales, Saks Second Tier: Retailers sell more modestlypriced merchandise with less customer service: Example: Macys Third Tier: Value oriented caters to more price conscious customerExample: JCPenney, Sears, Kohls,Rob Melnychuk/Getty Images,2-17,What To Do With an Eroding Market,To deal with an eroding market Department stores are:attempting to increase the amount of exclusive merchandise they sellundertaking marketing campaigns to develop strong images for their stores and brandsbuilding better relationships with their key customers,Royalty-Free/CORBIS,2-18,Issues in Discount Store Retailing,Only Big Three Left Wal-Mart, Kmart, TargetWal-Marts DominanceDifferentiate StrategyWal-Mart = Low Price and Good valueTarget = More Fashionable ApparelCompetition from Category SpecialistsToys-R-Us, Circuit City, Sports Authority,McGraw-Hill Companies, Inc./Gary He, photographer,2-19,Issues in Specialty Store Retailing,Mall-Based Apparel RetailersDecline in Mall Shopping and Apparel Sales-Lack of New Fashions-Less Interest in Fashion-Increase Price Consciousness,McGraw-Hill Companies, Inc./Gary He, photographer,2-20,Issues in Drug Store Retailing,Consolidation Walgreens, CVS, Rite-AidCompetition from Supermarkets, discount Stores and mail-in ordersEvolution to a New Format-Stand Alone Sites with Drive Thru Windows-offering more frequent purchase food itemsImproved systems provide personalized service in the pharmacy,Keith Brofsky/Getty Images,2-21,Category Specialists,Deep and Narrow Assortments Destination StoresLow Price and ServiceWholesaling to Business Customers and Retailing to ConsumersIncredible Growth,Ryan McVay/Getty Images,2-22,Issues in Home Improvement Centers,Home Depot and Lowes act as both: Retailer and Wholesaler,Consumer Business,2-23,Home Improvement Centers,Displays are warehousedCustomer Service: How to select and how to use merchandiseCompetition focuses on price, effort to differentiate and services provided,Ryan McVay/Getty Images,2-24,Issues in Extreme Value Retailing,Focuses on Lower Income ConsumersNames mostly imply good value not $1 price pointsLow Cost LocationLimited ServicesOne of the Fastest Growing Retail SegmentsDollar Tree Family DollarDollar General 99 Cents Only Store,Stockbyte/Punchstock Images,2-25,Off-price retailer,TJX including Marshalls and T.J.MaxxOutlet Stores,2-26,Non-store Retail Formats,Electronic RetailingCatalog and Direct MailDirect SellingTelevision Home ShoppingVending Machines,Royalty-Free/CORBIS,Ryan McVay/Getty Images,2-27,Electronic Retailing,History of frenzied investments and false predictions of retail dominancePrimarily used by traditional retailers to compliment store and catalog offeringsExclusive e-tailers target small and dispersed niche markets,Randy Allbritton/Getty Images,2-28,What are Amazon and eBay?,A Merchandise to consumers. Provides website development and fulfillment services to other retailerseBay Acts as a mall or other shopping center providing a “place” for buyers and sellers to meet,Don Farrall/Getty Images,2-29,Issues in Catalog Retailing,Low Start Up CostEvolution of Multi-Channel OfferingHard to compete with large well established firmsIncreasing Mail CostsClutter from other CatalogsGeneral merchandise catalogs like JC PenneySpecialty Catalogs like JC Whitney, Victoria Secret,2-30,Issues in Direct Selling,Providing information and demonstrations is costlyParty plan system: merchandise is demonstrated in a party atmosphereMulti-level network: Master distributors sell to distributors who sell merchandisePyramid schemes: Firm sells to other distributors and little if any merchandise goes to end users,2-31,Issues in Television Home Shopping,Consumers watch cable stations, infomercials or direct response adsFew consumers watch regularlyMost purchases made by small proportion of viewersCustomers cant examine merchandiseCustomers must wait for merchandise to come onSells mostly jewelry, apparel, cosmetics, kitchenware, exercise equipment,Royalty-Free/CORBIS,2-32,Issues in Vending Machine Retailing,Sales growth has been declining due to higher prices and healthier eating habitsNew technology may help sales growthVending machines are beginning to accept creditTrend of placing machines in captive consumer locations,Ryan McVay/Getty Images,2-33,Types of Nonstore Retailers,2-34,Sales by Catalog Retailers,2-35,Services vs. Merchandise Retailers,Intangibility -Problems in Evaluating Service Quality -Performance of Service ProviderSimultaneous Production and Delivery -Importance of Service ProviderPerishability -No Inventory, Must Fill CapacityInconsistency of the Offering -Importance of HR Management,2-36,Examples of Service Retailers,2-37,Examples of Service Retailers,2-38,Merchandise/Service Continuum,2-39,Types of Retail Ownership,Independent, Single Store Esta
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