LESSON 1 - RETAILING

Cards (25)

  • Retailing
    A set of business activities that adds value to the products and services sold to consumers for their personal or family use
  • Retailer
    A business that sells products and/or services to consumers for their personal or family use
  • Functions of a Retailer
    • Sells finished goods or services in the form that customer wants
    • Buys a wide range of products from different wholesalers and offers the best products under one roof
    • Keeps the products or services within easy reach of the customer by making them available at appropriate location
  • Differences between Retailers and Wholesalers
    • Social interaction and interpersonal sales techniques
    • Sell small quantities of items
    • Provide convenience in terms of location, payment and credit facilities, range of merchandise, after-sales service
    • Offer selection - an assortment of merchandise
    • Set up in business to trade with the general public
    • Normally charge higher unit prices
    • Pricing policy tends to be simpler
    • Bears a different kind of risk
  • Retail management
    The various processes which help the customers to procure the desired merchandise from the retail stores for their end use
  • Distribution channel
    A set of firms that facilitate the movement of products from the point of production to the point of sale to the ultimate consumer
  • Supply chain
    A set of firms that make and deliver goods and services to consumers
  • Logistics management
    Includes all activities involved in physically moving raw material, in-process inventory, and finished goods inventory from the point of origin to the point of use or consumption
  • Marketing channel system
    • Vertical Integration - firm performs more than one set of activities in the channel; operating its own distribution centers to supply its stores
    • Backward Integration - retailer performs some distribution and manufacturing activities; operating warehouses or designing private levels
    • Forward Integration - manufacturers undertake retailing activities
    • Balance Integration - a combination of both backward and forwards integration, where a company mergers' with both a company that is before it in the supply chain, as well as one that is after
  • Social and economic significance of retailing
    • Support for community
    • Retail sales
    • Employment
    • Management training opportunities
    • Entrepreneurial opportunities
  • How retailers add value
    • Provide assortments - buy other products at the same time; wide selection of brands, design, sizes, colors and prices at one location
    • Break bulk - buy it in quantities the customer wants
    • Holding inventory - products will be available when consumers want them
    • Providing services - consumers can see and test the product before buying; consumers can have the product now and pay it later
  • Opportunities in retailing
    • Management opportunities
    • Entrepreneurial opportunities
  • Critical environment factors of retailing
    • Macroenvironment: technological/social/ethical/legal/political factors
    • Microenvironment: competitors and customers
  • Retailers microenvironment
    • Competitors
    • Intratype competition - competition between the same type of retailers
    • Intertype competition - competition between retailers that sell similar merchandise using different formats
    • Variety - is the number of different merchandise categories within a store or department
    • Scrambled merchandising - the offering of merchandise not typically associated with the store type
  • Misconceptions about careers in retailing
    • Don't need college
    • Low pay
    • Long hours
    • Boring
    • Dead-end job
    • No benefits
    • Everyone is part-time
    • Unstable environment
  • Vertical Integration
    Firm performs more than one set of activities in the channel; operating its own distribution centers to supply its stores
  • Backward Integration
    Retailer performs some distribution and manufacturing activities; operating warehouses or designing private levels
  • Forward Integration
    Manufacturers undertake retailing activities
  • Balance Integration
    A combination of both backward and forwards integration, where a company mergers' with both a company that is before it in the supply chain, as well as one that is after
  • Intratype Competition
    Competition between the same type of retailers
  • Intertype Competition
    Competition between retailers that sell similar merchandise using different formats
  • Variety
    The number of different merchandise categories within a store or department.
  • Scrambled Merchandising
    The offering of merchandise not typically associated with the store type.
  • Competitors
    Intratype Competitors
    Intertype Competitors
  • Elements in Retail Mix
    A) Location
    B) Merchandise Management
    C) Pricing
    D) Customer Service
    E) Store design and display
    F) Communication Mix