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Retailing Management Chapter 2
Chapter 2
20
Management
09/10/2012

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Term
Strategic Planning

Definition
Adapting the resources of a firm to the opportunities and threats of an ever-changing retail environment
Term
Mission Statement
Definition
Basic description of a firm's fundamental nature, rationale, and direction
Term
Market Share
Definition
A retailer's total sales divided by total market sales or the proportion of total sales in a particular geographic or product market that the retailer has been able to capture; sales as a percentage of total market sales for the merchandise line or service category under consideration
Term
Net Profit Margin
Definition
Ratio of net profit (profit after taxes) to net sales
Term
Asset Turnover
Definition
Retailer's annual net sales divided by total assets; ratio tells the retail analyst how productively the firm's assets are being used
Term
Return on Assets (ROA)
Definition
Annual net profit divided by total assets; depicts net profit return the retailer achieved on all assets invested regardless of whether the assets were financed by creditors or by the firm's owners
Term
Financial Leverage
Definition
Total assets divided by net worth or owner's equity; ratio shows the extent to which a retailer is using debt in its total capital structure
Term
Return on Net Worth (RONW)
Definition
Net profit divided by net worth or owner's equity; usually used to measure owner's performance
Term
Stockout
Definition
Situation in which products are not available for customers when they want them
Term
Productivity Objectives
Definition
Objectives that state how much output the retailer desires for each unit of resource input
Term
Societal Objectives
Definition
A retailers concern with broader issues in our society; five most frequently cited are employment objectives, payment of taxes, consumer choice, equity, and being a benefactor
Term
Personal Objectives
Definition
Relate to personal goals of employees, managers, or owners of a retail establishment; generally, three types of personal objectives: self-gratification, status and respect, and power and authority
Term
Strategy
Definition
Carefully designed plan that shows how a retailer will achieve its goals and objectives
Term
Target Market
Definition
Groups or groups of customers that the retailer seeks to serve; the segment of the market that the retailer decides to pursue through its marketing efforts
Term
Location
Definition
Space in which business is transacted: a traditional store in a physical space, a person's home in relation to a print catalog or television shopping or a virtual store in cyberspace
Term
Retail Mix
Definition
Combination of goals and tactics used by a retailer to appeal to its target market and thereby meet its financial objectives; includes merchandise, price, advertising and promotion, location, customer services and selling, and store layout and design
Term
Value Proposition
Definition
A clear statement of the tangible and intangible results a customer receives from using a retailer's products or services; the promised benefits a retailer offers in relation to the cost the consumer incurs
Term
Operations Management
Definition
Concerned with maximizing a retailer's use of resources and how the retailer converts these resources into sales and profits
Term
Yield Management
Definition
Understanding, anticipating, and reacting to changing customer needs in order to maximize the revenue from a fixed capacity of available services
Term
Revenue Per Available Seat Mile (RASM)
Definition
Strategy used by airlines to maximize revenue; usually effected by overbooking