Chapter 13 Textbook Summary Notes.docx

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Western University
Management and Organizational Studies
Management and Organizational Studies 2320A/B
Kevin Thompson

Chapter 13 Textbook Summary Notes Retailing and Wholesaling  Retailing: all activities involved in selling products or service directly to final consumers for their personal, nonbusiness use  Retailers: businesses whose sales come primarily from retailing  Shopping marketing – the idea that the retail store itself is an important marketing medium o Focusing the entire marketing process – from the product and brand development to logistics promotion and merchandising – toward turning shoppers into buyers at the point of sale o Concept suggest that these efforts should be coordinated around the shopping process itself o Emphasized the important of the retail environment on customer buying  Nonstore retailing – selling to final consumers through the Internet, direct mail, catalogues, and telephone o Growing rapidly  Types of Retailers o They can be classified in terms of several characteristics, including the amount of service they offer, the breadth and depth of their product lines, the relative prices they charge, and how they are organized o Amount of Service  Three levels:  Self service retailers – serve customers ho are willing to perform their own locate compare select process to save time or money  Limited service retailers- provide more sales assistance because they carry more shopping goods about which customers need information (increased operating costs result in higher prices)  Full-service retailers – salespeople assist customers in every phase of the shopping process o Product Line  Specialty store: carry narrow product lines with deep assortments within those lines  Department stores: carry a wide variety of product lines  Supermarkets: a large, low cost, low margin, high volume, self service store that carries a wide variety of grocery and household products  Cutting costs, establishing more efficient operations, lowering prices, and attempting to compete more effectively with food discounters  Convenience store: small stores that carry a limited line of high turnover convenience goods (highly competitive with rapid changes)  Superstores: much larger than regular supermarkets and offer a large assortment of routinely purchased food products, non food items, and services (Costco)  Category killers: a giant specialty store that carries a very deep assortment of a particular line and is staged by knowledgeable employees  Service retailers: a retailer whose product line is actually a service, including hotels, airlines, banks, universities, and many others o Relative Prices  Discount store: sells standard merchandise at lower prices by accepting lower margins and selling higher volumes  Off-price retailers: a retailer that buys at less than regular wholesale prices and sells at less than retail (factory outlets)  Independent off price retailers: an off price retailer that is either independently owned and run or is a division of a larger retail corporation  Factor outlets: manufacturer owned and operated stores by firms  Warehouse clubs: limited selection of brand name grocery items, appliances, clothing, and a hodgepodge of other goods at deep discounts to members who pay annual membership fees o Organizational Approach  The major types of retail organizations – corporate chains, voluntary chains, retailers cooperative, franchise organizations, merchandising conglomerates  Chain stores: two or more outlets that are commonly owned and controlled  Many advantages over independents  Their size allows them to buy in large quantities at lower prices and gain promotional economies  Voluntary chain – a wholesale-sponsored group of independent retailers that engage in group buying and common merchandising (IGA)  Retailer cooperative – a group of independent retailers that band together to set up a jointly owned, central wholesale operation and conduct joint merchandising and promotion efforts (True Value Hardware)  Franchise: a contractual association between a manufacturer, wholesaler, or service organization (a franchisor) and independent business people (franchisees) who buy the right to own and operate one or more units in a franchise system  Prominent in fast food and restaurants  Merchandising conglomerates: corporations that combine several different retailing forms under central ownership (The Limited)  Retailer Marketing Decisions o Segmentation, Targeting, Differentiation, and Positioning Decisions  Retailed must first segment and define their target markets and then decide how they will differentiate and positive themselves in these markets  Retailers cannot make consistent decisions about product assortment, services, pricing, advertising, store décor  “Something for everyone” will end up satisfying no market at all  Successful retailers define their target markets well and position themselves strongly o Product Assortment and Services Decision  Three major product variables:  Product assortment – should differentiate the retailer while matching target shoppers’ expectations o One strategy is to offer merchandise that no other competitor offers o Feature blockbuster merchandising events o Offer surprise merchandise o The retailer can differentiate itself by offering a highly targeted product  Services mix  Stores atmosphere – unique store experience o Price Decision  A retailers price policy must fit its target market and positioning, product, and service assortment, and competition  Most retailers seek either high markups on lower volume or low markups on higher volume
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