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Midterm

RMG 200 Study Guide - Midterm Guide: Identifiability, Subculture, Gentrification


Department
Retail Management
Course Code
RMG 200
Professor
Ken Wong
Study Guide
Midterm

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CHAPTER 1
Breaking bulk: A 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 stakeholders
Customer relationship management: A business philosophy and set of strategies,
programs, and systems that focuses on identifying and building loyalty with retailers most valued
customers
Distribution channel: A set of firms that facilitate the movement of products form the point of
production to the point of sale to the ultimate consumer
Ethics: A system or code of conduct based on universal moral duties and obligations that indicate
how one should behave
Intratype competition: Competition between retailers of the same type (eg. Loblaws vs. A&P)
Intertype competition: Competition between retailers that sell similar merchandise using
different formats, such as discounts and department stores
Retailer: A business that sells products and services to consumers for their personal or family use
Retailing: A set of business activities that adds value to the products and services sold to
consumers for their personal or family use
Retail strategy: A statement that indicates the following:
The target market toward which a retailer plans to commit its resources
The nature of the retail offering that the retailer plans to use to satisfy the needs of the target market
The bases upon the retailer will attempt to build a sustainable competitive advantage over competitors
Scrambled merchandising: The offering of merchandise not typically associated with the store
type such as clothing in a drugstore
Variety: The number of different merchandise categories within a store or department
Backward Integration: Arises when a retailer performs some distribution and manufacturing
activities, such as operating warehouses or designing private label merchandise
Forward integration: occurs when a manufacturer undertakes retailing activities such as Roots
operating its own retail stores
CHAPTER 2
Assortment: The number of skus within a merchandise category. Also called a dept. of
merchandise and dept. of stock
Big-box stores: large limited service retailers
Catalogue Retailing: Nonstore retail format in which the retail offering is communicated to a
customer through a catalogue
Category Killers: A discount retailer that offers a narrow but deep assortment of merchandise in a
category and this dominates the category from the customer’s perspective. (Aka category specialist)
Closeout retailer: Off-price retailer that sells a broad but inconsistent assortment of general
merchandise as well as apparel and soft home goods, obtained through liquidations and bankruptcy
proceedings
Combination store: A retailer that sells both food and nonfood items
Convenience store: A store that provides a limited variety and assortment of merchandise at a
convenient location in a 186 to 279m2 store with a speedy checkout
Conventional supermarket: A self-service food store that offers groceries, meat, and produce
with limited sales of nonfood items, such as health and beauty aids and general merchandise
Customization approach: An approach used by retailers to provide customer service that is
tailored to meet each customer’s personal needs
Department store: A retailer that carries a wide variety and deep assortment, offers considerable
customer services, and is organized into separate departments for displaying merchandise
Direct mail retailers: A non-store retailer that communicates directly with customers using mail
brochures and pamphlets to sell a specific product or service to customers at one point in time
Direct response advertising: Advertisements on TV and radio that describe products and
provide an opportunity for customers to order them
Direct selling: A retail format in which a salesperson, frequently an independent, distributor,
contacts a customer directly in a convenient location and demonstrates merchandise benefits, takes
an order and delivers the merchandise to the customer
Discount store: A general merchandise retailer that offers a wide variety of merchandise, limited
service, and low prices (aka Mass merchandiser)
Drugstore: Specialty retail store that concentrates on pharmaceuticals and health and personal
grooming merchandise
Electronic retailing: A retail format in which the retailers communicate with customers and offer
products and services for sale over the internet (aka e-tailing)
Factory outlet: Outlet store owned by a manufacturers
Fair trade: Purchasing practices that require producers to pay workers a living wage, well more than
the prevailing minimum wage, and offer other benefits like onsite medical treatment
Franchising: A contractual agreement between a franchisor and a franchisee that allows the
franchisee to operate a retail outlet using a name and format developed and supported by the
franchisor
Full line discount store: Retailers that offer a broad variety of merchandise, limited service and
low prices
General merchandise catalogue retailers: Nonstore retailers that offer a broad variety of
merchandise in catalogues that are periodically mailed to their customers
Home improvement Centre: A category specialist offering equipment and material used by DYI
and construction contractors to make home improvements.
Hypermarket: Large (9300 to 27900 square meters) combination food (60-70%) and general
merchandise (30-40%) retailer
Infomercials: TV programs typically 30min long that mix entertainment with product demonstrations
and solicit orders placed by consumers
In store- kiosks: Spaces located within stores containing a computer connected to the store’s
central offices or the internet
Leased department: An area in a retail store 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
Multi-channel retailer: Retailer that sells merchandise or services through more than one
channel
Multilevel network: A retail format in which people serve as master distributors, recruiting other
people to become distributors in their network
North American industry classification system: classification of retail firms into a
hierarchal set of six digit codes based on the types of products and services they produce and sell.
Off price retailer: A retailer that offers an inconsistent assortment of brand name fashion oriented
soft goods at low prices
Online retailing: A retail format in which the retailers communicate with customers and offer
products and services for sales over the internet
Outlet store: Off price retailer owned by a manufacturer or a department or specialty store chain
Party plan system: Sales people encourage people to act as hosts and invite friends or
coworkers to party at which the merchandise is demonstrated. The host receives commission for
arranging the meeting
Power perimeter: The areas around the outside wales of a supermarket that have fresh
merchandise categories
Pyramid scheme: when the firm and its program are designed to sell merchandise and services to
their distributors rather than to end users
Retail chain: A firm that consists of multiple retail units under common ownership and usually has
some centralization of decision making in defining and implementing its strategy
Services retailer: Organization that offers consumers services rather than merchandise. Eg.
Banks, hospitals, spas, Universities
SKU (Stock Keeping Unit): The smallest unit available for keeping inventory control. In soft
goods merchandise, a sku usually means size, color, and style
Specialty catalogue retailers:
Specialty store: Store concentrating on a limited number of complimentary merchandise
categories and providing a high level of service in an area typically under 744 square meters
Super Centre: Large store (13950-20460m2) combining a discount store with a supermarket
Superstore: A large supermarket between 1860-4650m2
Teleshopping: A retail format in which customers watch a TV program demonstrating merchandise
and then palace orders for merchandise by phone
Value retailers: General merchandise discount stores that are found in either low-income urban or
rural areas and are much smaller than traditional discount stores (less than 837m2)
Variety: The number of different merchandise categories within a store or department
Vending machine retailing: A Nonstore format in which merchandise or services are stored in
a machine and dispensed to customers when they deposit cash or credit
Warehouse club: A retailer that offers a limited assortment of food and general merchandise with
little service and low prices to ultimate consumers and small businesses
Wholesale-sponsored voluntary cooperative group: An organization operated by a
wholesaler offering a merchandising program to small, independent retailers on a voluntary basis
Chapter 3
Accessibility: The degree to which customers can easily get in and out of a shopping Centre./
Ability of the retailer to deliver the appropriate retail mix to the customers in the segment
Actionability: The definition of a market segment must clearly indicate what the retailer should do
to satisfy its needs
Benefit Segmentation: A method of segmenting a retail market on the basis of similar benefits
sought tin merchandise or services
Buying process: The stages customers go through to purchase merchandise or services
Buying situation segmentation: a method of segmenting a retail market based on customer
needs in a specific buying
Buzz: Genuine, street level excitement about a hot new product
Compatibility: The degree to which the fashion is consistent with existing norms, values and
behaviors
Complexity: Refers to how easy it is to understand and use a new fashion. Consumers have to
learn how to incorporate a new fashion into their lifestyle for it to be successful
Composite segmentation: A method of segmenting a retail market using multiple variables,
including benefits sought, lifestyles, and demographics
Consideration set: The set of alternatives the customer evaluates when making a merchandise
selection
Cross shopping: A pattern of buying both premium and low priced merchandise or patronizing
expensive, status oriented retailers and price oriented retailers
Culture: The meaning and values shared by most members of society
Demographic segmentation: Age, sex, income, and education
Everyday Low pricing: A Pricing strategy that stresses continuity of retail prices at a level
somewhere between nonsale price and the deep discount sale price of the retailer’s competitors
External sources of information:
Fashion: Category of merchandise that typically lasts several seasons; sales can vary dramatically
from one season to the next
Geographic segmentation: A market segmentation system that uses both geographic and
demographic characteristics to classify consumers
Hedonic needs: motivates consumers to go shopping for pleasure
Hype: Artificially generated word of mouth, by public relations people
Identifiability: Permits a retailer to determine a market segment’s size and with who m the retailer
should communicate when promoting its retail offering
Information search: The stage in the buying process which a customer seeks additional
information to satisfy a need
Internal sources of information: Information in a customer’s memory such a names, images,
and past experiences with different stores
Knock off: A copy of the latest styles displayed at designer fashion shows and sold in exclusive
specialty stores. Copies are sold at lower prices through retailers targeting a broader market
Lifestyle segmentation: A method of segmenting a retail market based on how consumers live,
how they spend their time and money, what activities they pursue, and their attitudes and opinions
about the world they live in
Mass market theory: A theory of how fashion spreads that suggests that each social class has
its own fashion leaders who play a key role in their own social networks. Fashion information trickles
across social classes rather than down from the upper classes to the lower classes.
Multi-attribute attitude model: A model of customer decision making based on the notion that
customers see a retailer or product as a collection of attributes. Can be used for evaluating a retailer,
product or vendor. Uses a weighted average score based o the importance of various issues and
performance on those issues.
Observability: Degree to which a new fashion is visible and easily communicated to others in a
social group
Post purchase evaluation: Evaluation of merchandise or services after customer has
purchased.
Psycho graphics: Refers to how people live, spend time and money, activities, and opinions
Reference group: One or more people whom a person uses a basis of comparison for his or her
beliefs, feelings, and behaviors
Retail market segment: A group of customers whose needs will be satisfied by the same retail
offering because they have similar needs and go through similar buying processes
Satisfaction: A post consumption evaluation of the degree to which a store meets or exceeds
expectations
Store advocates: Customers who like a store so much they actively share their positive
experiences w/friends and family
Subculture: A distinctive group of people within a culture. Share some customs and norms with the
overall society but have unique perspectives
Subculture theory: Fashion spreads that suggests that subcultures of mostly young and less
affluent consumers. Eg. Rappers, have started fashions for such things as t-shirts, sneakers, jeans etc.
Trialibity: The costs and commitment required to initially adopt a fashion
Trickledown theory: A theory of how fashion spreads that suggest that the fashion leaders are
consumers with the highest social status- wealthy, educated consumers. After they adopt a fashion,
the fashion trickles down to the consumers in lower social classes. When lowest class accepts it, it’s
no longer cool.
Utilitarian needs: Needs motivating consumers to go shopping to accomplish a specific task
Chapter 4
Bargaining power of vendors: A competitive factor that makes a market unattractive when a
few vendors control the merchandise sold in it. Vendors dictate prices and other terms
Barriers to entry: Conditions in a retail market that make it difficult for firms to enter the market
Competitive rivalry: The frequency and intensity of reactions to actions undertaken by
competitors
Cross selling: Sells complimentary merchandise from other dept.
Data warehouse: Coordinated and periodic copying of data from various sources, both inside and
outside enterprise, into an environment ready for analytical and information processing. Collected
from customers
Diversification opportunity: Strategic investment opportunity that involves an entirely new
retail format directed toward a market segment presently not served
Macro-environment: The external environment that the retailer cannot control. Eg. Competition,
economic stability, social trends, lifestyle
Market expansion opportunity: Investment opportunity that employs the existing retailing
format in new market segments
Market penetration opportunity: Focuses on increasing sales to present customers using the
present retailing format
Micro-environment: All of the things within the retailer’s control, including the retail product that
will be sold, the price, store location, promotion of visual image, store management decisions
Mission statement: Broad description of scope of activities and plans
Positioning: The design and implementation of retail mix to create in the customer’s mind an
image of the retailer relative to its competitiveness
Private label brands (AKA Store brand): Developed and marketed by a retailer and only
available for sale by that retailer (PC, No name)
Related diversification opportunity
Retail format: The retailer’s type of retail mix (services, pricing policy, approach to design, visual
merchandises)
Retail format development opportunity
Retailing concept:
Retail market: A group of consumers with similar needs (market segment) and a group of retailers
using similar retail format to satisfy those consumer needs.
Scale economies: Cost advantages due to size of retailer
Situation audit: Analysis of the opportunities and threats in the retail environment and the
strengths and weaknesses of the retail business relative to tis competitors
Strategic alliance: collaborative relationship between independent firms.
Strategic retail planning process:
Strengths and weaknesses analysis
Target Market: Market segment toward which the retailer plans to focus its resources and retail
mix
Unrelated diversification:
Chapter 5
Amount and quality of parking facilities: A stores’ having enough parking spaces, close
enough to the building, that he store is ideally accessible to customers, but not so many open spaces
that the store is viewed as being unpopular. 5.9 spaces/100m2 of a retail store
Analogue approach: Method of trade area analysis aka the similar store or mapping approach.
4 Steps: 1. Describing the current trade areas through technique of customer spotting 2: Plotting
the coasters on map. 3 primary, secondary, tertiary area zones. 4. Matching the characteristics of
stores in the trade areas with the potential new store to estimate its sales potential
Anchors: Major retailers located in a shopping Centre
Artificial barrier: in site evaluations for accessibly, barriers such as railroad tracks, major
highways, or parks
Central business district: The traditional DT business area
Congestion: The amount of crowding of either cars or people
Cumulative attraction: The principle that a cluster of similar complementary retailing activities
will generally have greater drawing power than isolated stores that engage in the same retailing
activities
Demalling: The activity of revitalizing a mall by demolishing a mall’s smaller shops, scrapping its
common space and food courts, enlarging the sites once occupied by department stores, and adding
more entrances to the parking lot
Destination store: A retail store in which the merchandise, selection, presentation, pricing, or
other unique features acts as a magnet or customers
Downtown location: Central business district located in traditional shopping area of smaller
towns, or secondary business district and suburb or within a larger city, generally featuring lower
occupancy costs, fewer people, stores, overall selection, and fewer entertainment and recreational
activities than more successful primary central business districts
Fashion specialty Centre: A shopping Centre that is composed mainly of upscale apparel
shops, and carrying selected fashions of high quality and price
Freestanding site: Retail location not connected to other retailers
Gentrification: A process in which old buildings are town down or restored to create new offices,
housing developments and retailers
Geographic information system: Computerized system that enables analysts to visualize
info about their customer’s demographics, buying behavior, and other data in map format
Huff gravity model: Trade area analysis model used to determine the probability that a customer
residing in a particular area will shop at a particular store or shopping Centre /
Ingress/egress: Refers to Entering exiting retail parking lot
Mall: A shopping Centre with a pedestrian focus where customers park in outlying areas and walk to
the store
Mixed use development: Development that combines several uses in one complex- Eg.
Shopping Centre, office tower, hotel, civic Centre
Natural barrier: River/mountain affecting accessibility of site
Outlet centers: Typically features stores owned by retail chains or manufactures that sell excess
and out of season merchandise at reduced prices
Overstored trade area: Area of having so many stores selling specific good or service that some
stores will fail
Polygon: trade area whose boundaries conform to streets and other map features other than being
concentric circles
Primary zone (Primary trade area): The geographic area from which the store or shopping
Centre derives 60 – 65% of customers
Power Centre: Shopping Centre that is dominated by several large anchors including discount
stores (Walmart), off price stores (winners) warehouse clubs (Costco) or category specialists such as
staples,
Reilly’s law of retail gravitation: A model used in a trade area analysis to define the relative
ability of two cities to attract customers from the area between them
Region: Refers to the part of country, city, Census metropolitan
Regional Centre: Shopping mall that provides general merchandise (mostly apparel) and services
in full depth and variety
Regression analysis: A statistical approach based on the assumption that factors that affected
sales of existing stores in a chain will have the same impact on the stores located on new sites
Road condition: Includes age, number of lanes, spotlights, congestion, general state of repair
Road pattern: Consideration used In measuring the accessibility of a retail location via major
arteries, highways, or roads
Saturated trade area: Trade area
Secondary zone: Geographic area of importance in terms of customer sales, generating about 20
percent of the stores sales
Shopping Centre: Group of retail and other commercial establishments that is planned devoted,
owned and managed as a single property
Strip Centre: Shopping Centre that usually has parking directly in front of the stores and does not
have enclosed walkways linking the stores
Superregional Centre symbiotic store
Tertiary zone: Outermost ring of trade are; customers who occasionally shop at the sore or
shopping Centre
Trade area: Geographic sector that contains potential customers for a particular retailer or shopping
Centre
Traditional strip Centre: Shopping Centre that is designed to provide convenience shopping for
the day to day needs of consumers in their immediate neighborhood
Understored trade area: Has two few stores selling a specific good or service to satisfy the
needs of the population
Visibility: Customer’s ability to see the store and enter the parking lot safely
Chapter 6
Atmospherics: The design of an environment via visual communications, lighting, colors, music
and scent to stimulate customer’s perceptual and emotional responses.
Cash-wrap areas: The places in a store where customers can purchase merchandise and have it
wrapped and placed in a bag (aka Checkout area)
Demand destination area: Department or area in a store which demand for the products or
services offered is created before customers get to their destination
End cap: Display fixture located at the end of an aisle
Feature area: Area designed to get the customer’s attention that includes end caps, promotional
aisles, or areas free standing fixtures, and mannequins that introduce a soft goods department,
windows, and point of sale areas.
Four way fixture (aka feature fixture): A fixture with two cross bars that sit perpendicular to
each other on a pedestal
Freeform layout (AKA boutique): A store design, used primarily in small specialty stores or
within the boutiques of large stores, that arranges fixtures and aisles asymmetrically
Freestanding fixture: Fixtures and mannequins located on aisles that are designed primarily to
get customer’s attention and bring them into the department
Frontal presentation: A method of displaying merchandise in which the retailer exposes as
much of the product as possible to catch the customer’s eye
Gondola: An island type of self-service counter with tiers of shelves, bins, or pegs
Grid layout: A store design typically used by grocery stores, in which merchandise is displayed on
long gondolas in aisles with a repetitive pattern
Idea-oriented presentation: A method of presenting merchandise based on n specific idea or
the image of the store
Impulse Product: Located near the front of the store, where it may draw people to the store or
make impulse buys
Planogram: A diagram created from photographs, computer output, that illustrates exactly where
every SKU is to be placed
Point of sale area (AKA POP): An area where the customer waits at checkout. Most valuable
piece of real estate in the store, b/c the customer is almost held captive
Popping the merchandise: Focusing spotlights on a special feature areas and items
Racetrack layout (AKA Loop): Provides a major aisle to facilitate customer traffic that has
access to the store’s multi entrances
Rounder: (AKA Bulk fixture, capacity fixture)
Sales per linear meter: A measure of space productivity used when most merchandise is
displayed multiple shelves of long gondolas (grocery)
Sales per squaremetre: A measure of space productive used by most retailers since rent and
land purchases are assessed on /M2 basis
Straight Rack: Fixture that consist of long pope suspended with supports going to the floor or
attached to a wall
Tonnage merchandising: A display technique in which large quantities of merchandise are
displayed together
Vertical merchandising: A method whereby merchandise is organized to follow the eye’s
natural up/down movement
Chapter 7
Adaptability: A company’s recognition of cultural differences and adaption of its core strategy to
the needs of local markets
Bootleg: The sale of imitation goods where there is little or no attempt oat hiding the fact that the
product is counterfeit
Counterfeit merchandise: Goods that are made and sold w/out permission of the owner of a
trademark, a copyright, or patented invention that is legally protected in the country
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