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Chapter 1An Introduction to Retailing

RETAIL

MANAGEMENT:

A STRATEGIC

APPROACH,9th Edition

BERMAN EVANS

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Chapter Objectives

To define retailing, consider it from differentperspectives, demonstrate its impact, and noteits special characteristics

To introduce the concept of strategic planningand apply it

To show why the retailing concept is thefoundation of a successful business, with an

emphasis on the total retail experience,customer service, and relationship retailing

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Retailing

Between the prod and the consumer thereis a middleman-the retailer, who links the

producers and the ultimate consumers. The word retail is derived from the French

word retaillier, meaning to cut a piece off

or to break bulk.

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Retailing

Retailing is defined as a conclusive set ofactivities or steps used to sell a product or a

service to consumers for their personal orfamily use.

Retailing encompasses the businessactivities involved in selling goods and

services to consumers for their personal,family, or household use. It includes everysale to the final consumer.

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Issues in Retailing

How can we best serve our customers whileearning a fair profit?

How can we stand out in a highlycompetitive environment where consumershave too many choices?

How can we grow our business, whileretaining a core of loyal customers?

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The Philosophy

Retailers can best address these

questions by fully understanding and

applying the basic principles ofretailing, as well as the elements in a

well-structured, systematic, and

focused retail strategy.

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Figure 1.4 A Typical Channel of

Distribution

Manufacturer

Wholesaler

Final

Consumer

Retailer

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Figure 1.5 The Retailers Role in

the Sorting Process

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Multi-Channel Retailing

A retailer sells to consumers throughmultiple retail formats

Web sites

Physical stores

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Relationship Management

Among Retailers and Suppliers Disagreements may occur:

control over channel

profit allocationnumber of competing retailers

product displays

promotional supportpayment terms

operating flexibility

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Distribution Types

Exclusive: suppliers make agreements withone or few retailers that designate the latter

as the only ones in a specified geographicarea to carry certain brands or products

Intensive: suppliers sell through as manyretailers as possible

Selective: suppliers sell through a moderatenumber of retailers

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Figure 1.8 Special Characteristics

Affecting Retailers

RetailersStrategy

SmallAverage

Sale

ImpulsePurchase

Popularityof

Stores

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Retail Strategy

An overall plan for guiding a retail firm

Influences the firms business activities

Influences firms response to market

forces

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Six Steps in Strategic

Planning1. Define the type of business

2. Set long-run and short-run objectives

3. Determine the customer market4. Devise an overall, long-run plan

5. Implement an integrated strategy

6. Evaluate and correct

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Figure 1.10 Applying the

Retail Concept

Customer Orientation

Coordinated Effort

Value driven

Goal Orientation

RetailingConcept

RetailStrategy

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Figure 1.11 Eliminating

Shopper Boredom

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Customer Service

Activities undertaken by a retailer inconjunction with the basic goods and

services it sells.Store hours

Parking

Shopper-friendliness

Credit acceptance

Salespeople

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Relationship Retailing

Seek to establish and maintain long-termbonds with customers, rather than act as

if each sales transaction is a completelynew encounter

Concentrate on the total retail experience

Monitor satisfaction

Stay in touch with customers

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Effective Relationship

Retailing Use a win-win approach

It is harder to get new customers than to

keep existing ones happy Develop a customer database

Ongoing customer contact is improvedwith information on peoples attributes

and shopping behavior