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RMG200 - Complete Textbook Notes

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Retail Management
RMG 200
Brent Bar

Chapter 1: Intro to Retail 1/14/2012 1:10:00 PM Growth strategies to confront current economic crisis: Cut costs Risk management Customer experience Human capital management Smaller stores Market segmentation Global Re-think supply chains You are a brand Multichannel * Key to failure trying to please everyone Retailing: Set of business activities that adds value to the products and services sold to consumers for their personal/family use Retailer: Business that sells products and services to consumers for their personal or family use Having the right merchandise, at the right price, at the right place, in the right quantities at the time Distribution Channel: Set of firms that facilitate the movement of products from the point of production to the point of sale to the ultimate consumer Vertical Integration: Example of diversification by retailers involving investments by retailers in wholesaling or manufacturing merchandise Backward integration: When a retailer performs some distribution and manufacturing activities such as operating warehousing or designing private label merchandise Forward integration: When a manufacturer undertakes retailing activities Functions Performed by Retailers Providing an assortment of products and services Breaking bulk Holding inventory Providing service & services Breaking Bulk: Function performed by retailers or wholesalers in which they receive large quantities of merchandise Corporate social responsibility: Voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders The Retail Management Decision Process * Retail managers need to understand their environment, especially their customers and competition before they can develop and implement effective strategies Intratype competition: Competition between retailers of the same type Scrambled merchandising: Offering of merchandise not typically associated with the store type, such as clothing in a drug store Increases intertype competition: between retailers that sell similar merchandise using different formats, such as discount and department stores Retail strategy: Indicates 1) the target market toward which a retailer plans to commit its resources, 2) the nature of the retail offering that the retailer plans to use to satisfy the needs of the target market, and 3) the bases upon which the retailer will attempt to build a sustainable competitive advantage over competitors Customer Relationship Management business philosophy and set of strategies, programs, and systems that focuses on identifying and building loyalty with a retailers most valued customers Must be consistent with financial objectives, location strategy, and organization design and HRM strategy Give customers a more complete selection of merchandise Increase awareness of inventory levels Decrease inventory investment Implementing the Retail Strategy Product, place, value, people, communication Six Tests of Ethical Action Publicity Test Moral Mentor Test Admired Observer Test Transparency Test Person in the Mirror Test Golden Rule Test Chapter 2: Types of Retailers 1/14/2012 1:10:00 PM Retail industry is changing rapidly; some important changes are Changing consumer preferences Increasing industry concentration Globalization of retail Use of multiple channels to interact with customers Increasing competition in the Canadian marketplace Growing importance of technology to retail success Blurring of retail channels Retail branding Survival of the fittest The retail mix: Type of merchandise sold Level of customer service Value is a combination of price and quality Communicate the stores position Place which includes location, store layout, and design North American Industry Classification Systems (NAICS): Classification of retail firms into a hierarchical set of six-digit codes based on the types of products and services they produce Variety: The number of different merchandise categories within a store or department Assortment: The number of SKUs within a merchandise category. Also called depth of merchandise/stock SKU: (Stock Keeping Unit) The smallest unit available for keeping inventory control. In soft goods merchandise, a SKU usually means size, colour, and style General Merchandise Retailers Discount Store / Mass Merchandiser: Offers a wide variety of merchandise, limited service, and low prices Specialty Store: Concentrates on a limited number of complementary merchandise categories and providing a high level of service in an area typically under 744 square metres Category Killer/Specialist: Offers a narrow but deep assortment of merchandise in a category and thus dominates the category from the customers perspective Home Improvement Centre: Offers equipment and material used by do-it-yourselfers and construction contractors to make home improvements Department Store: Carries a wide variety and deep assortment, offers considerable customer services, and is organized into separate departments for displaying merchandise Leased Department: Leased or rented to an independent company. The leaseholder is typically responsible for all retail mix decisions involved in operating the department and pays the store a percentage of its sales as rent Drugstores (face competition from supermarkets) Off-price retailers (Winners) Close-out retailers (Liquidation World) Outlet stores Conventional Supermarkets Superstores (Bigger supermarkets) Power perimeter areas around outside walls of supermarkets that have fresh merchandise categories) Fair trade Purchasing practices that require producers to pay workers a living wage and benefits Supercentre (Discount store + supermarket) Nonstore Retail Formats Electronic retailing Catalogue retailing Direct selling (To your home) Television Home Shopping Vending Machines
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