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Ryerson University
Retail Management
RMG 200

Chapter 1 Retailing: set of business activities that add value to the products and services sold to consumers for personal or family use Retailer: business that sells products, services or both to consumers for personal or family use Distribution channel: set of firms that facilitate the movement of products from the point of production to point of sale Vertical integration: firms perform more than one set of activities in the channel Functions performed by retailers: 1. Providing and assortment of products and services 2. Breaking bulk 3. Holding inventory 4. Providing service and services Corporate social responsibility: describes the voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders Global Retailers: retailing is becoming a global industry as more and more retailers pursue growth by expanding their operations to more countries Opportunities in Retailing: 1. Management opportunities 2. Entrepreneurial opportunities Retailing Management Decision Process: 1. Understanding the world of retailing Competitors: a) Intratype competition: competition between retailers b) Variety: number of different merchandise categories within a store or department c) Scrambled merchandising: offering of merchandise not typically associated with the store type, such as clothing in a drugstore d) Intertype competition: competition between retailers that sell similar merchandise using different formats, such as discount and department stores Customers: customer needs are changing at an increasing rate 2. Developing a retail strategy Retail strategy: indicates how the firm plans to focus its resources to accomplish its objectives: a) The target market, or markets, toward which the retailer will direct its efforts b) The nature of the merchandise and/or services the retailer will offer to satisfy needs of the target market c) How the retailer will build a long term advantage over competitors Strategic Decision Areas: the key strategic decision areas for a retailer involve determining a market strategy, financial strategy, location strategy, organizational structure and human resource strategy, information systems and supply chain strategies, and customer relationship management strategies a) Customer relationship management (CRM): business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty with a firms most-valued customers. 3. Implementing the retail strategy: To implement a retail strategy, management develops a retail mix that satisfies the needs of its target market better than that of its competitors a) Elements in the retail mix: Product Intensity, assortment Types of merchandise/ services offered Place Size, layout and design, Store design, merchandise location display, and convenience of stores location Value Quality, price Value perception People Climate, knowledge, Climate is the measure of service what it is like to shop in the store, product knowledge policies. Get us customers in and out efficiently Communication Promotional mix Public relations, sales promotions, advertising, direct marketing, personal selling 4. Ethical and Legal Considerations a) Ethics: a system or code of conduct based on universal moral duties and obligations that indicate how one should behave Chapter 3 The Buying Process Buying process: stages customers go through to purchase merchandise or services 1. Need Recognition Types of needs: a) Utilitarian needs: needs motivation consumers to go shopping to accomplish a specific task b) Hedonic needs: needs motivating consumers to go shopping for pleasure Conflicting Needs a) cross-shopping: pattern of buying both premium and low-priced merchandise 2. Information Search a) Information search: stage in buying process in which a customer seeks additional information to satisfy a need b) Internal sources of information: information in a customers memory such as names, images and past experiences with different stores c) External sources: information provided by the media and other people d) Everyday low pricing strategy: strategy that stresses continuity of retail prices at a level somewhere between the regular non-sale price and the deep-discount sale price of the retailers competition e) Multi-attribute attitude model: based on the notion that customers see a retailer, a product, or a service as a collection of attributes or characteristics f) Consideration set: set of alternatives the customer values when making a merchandise selection 3. Purchasing the merchandise or service 4. Post-purchase Evaluation a) Satisfaction: post consumption evaluation of how well a store or product meets or exceeds customer expectations b) Post-purchase evaluation: evaluation of merchandise or services after the customer has purchased and consumed them 5. Family (Family decision Making) 6. Reference Groups Affected by: Offering information Providing rewards for specific purchasing behaviours Enhancing a consumers self-image a) Reference group: one or more people whom a person uses a basis of comparison for his or her beliefs, feelings, and behaviours b) Store advocates: customers who like a store so much that they actively share their positive experiences with friends and family 7. Canadas Multicultural Market a) Culture: the meaning and values shared by most members of a society b) Subcultures: distinctive group of people within a culture Market Segmentation Retail market segmentation: group of customers whose needs will be satisfied by the same detail offering because they have similar needs and go through similar buying processes 1) Criteria for evaluation market segments a) Actionability: means that the definition of a market segment must clearly indicate what the retailer should do to satisfy its needs b) Identifiability: permits a retailer to determine a market segments size and with whom the retailer should communication when promoting its retail offering c) Accessibility: the degree to which customers can easily get into and out of a shopping centre; the ability of the retailer to deliver the appropriate retail mix to the customers in the segment d) Size: target segment must be large enough to support a unique retailing mix 2) Approaches for segmenting markets a) Geographic segmentation: segmentation of potential customers by where they live. A retail market can be segmented by countries, provinces, cities and neighborhoods b) Demographic segmentation: a method of segmenting a retail market that groups consumers on the basis of easily measured objective characteristics, such as: age, sex, income and education 3) Retailing to tweens a) Geodemographic segmentation: a market segmentation system that uses both geographic and demographic characteristics to classify consumers
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