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Definition
| the set of business activites that adds value to the products and services sold to consumers for their personal or family use |
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| a business that sells products and/or services to consumers for their personal or family use |
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| a set of firms that make and deliver a given set of goods and services to the ultimate consumer |
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| engage in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods (usually in smaller quantities) to retailers or industrial or business users |
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| a firm performs more than one set of activities in the supply chain, such as investments by retailers in wholesaling or manufacturing |
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| arises when a retailer performs some distribution and manufacturing activities, such as operating warehouses or designingg private-label merchandise |
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| occurs when a manufacturer undertakes retailing activities, such as Ralph Lauren operating its own retail stores |
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| a function performed by retailers or wholesalers in which they receive large quantities of merchandise and sell them in smaller quantities |
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| Corporate Social Responsibility |
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| the voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders |
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competition between the same type of retailers
Example: Kroger vs. Safeway |
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| the number of different merchandise categories within a store or department |
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| when retailers offer merchandise not typically associated with their type of store, such as clothing in a drug store |
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| competition between retailers that sell similar merchandise using different formats, such as discount and department stores |
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indicates how the firm plans to focus its resources to accomplish its objectives.. Identifies:
- the target market, or markets, toward which the retailer will direct its efforts
- the nature of the merchandise and services the retailer will offer to satisfy the needs of the target market
- How the retailer will build a long-term advantage over its competitors
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| includes the decision variables retailers use to satisfy customer needs and influence their purchase decisions |
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| the principles governing the behavior of individuals and companies to establish appropriate behavior and indicate what is right and wrong |
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| North American Industry Classificationi System (NAICS) |
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| classification of retail firms into a hierarchical set of six-digit codes based on the types of products and services they produce and sell |
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| the number of merchandise categories a retailer offers |
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| the number of different items in a merchandise category |
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variety is also referred to this word
carried by a retailer |
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| assortment is also referred to this word |
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| each different item of merchandise |
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| Limited assortment supermarkets or extreme value food retailers |
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Definition
| only stock about 1250 SKUs |
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| a self- service food store offering groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise |
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| the areas around the outside walls of supermarket that have fresh merchandise categories |
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| purchasing from factories that pay workers a living wage, well more than the prevailing minimum wage, and offer other benefits, like onsite medical treatment |
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| the fastest growing retail category, are large stores (150,000-220,000 square feet) that combine a supermarket with a full-line discount store |
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| also large (100,000-300,000 square feet) combination food (60-70 percent) and general merchandise (30-40 percent) stores |
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| retailers that offer a limited and irregular assortment of food and general merchandise with little service at low prices for ultimate consumers and small businesses |
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| retailers that carry a broad variety and deep assortment, offer customer services, and organize their stores into a distinct departments for displaying merchandise |
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| Full-line discount stores |
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Definition
| retailers that offer a broad variety of merchandise, limited service, and low prices |
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| concentrate on a limited number of complementary merchandise categories and provide a high level of service in relatively small stores |
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| specialty stores that concentrate on health and personal grooming merchandise |
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| big box discount stores that offer a narrow but deep assortment of merchandise |
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| a discount retailer that offers a narrow but deep assortment of merchandise in a category and thus dominates the category from the customers’ perspective |
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| a category specialist offering equipment and material used by do-it- yourselfers and contractors to make home improvements |
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| small, full-line discount stores that offer a limited merchandise assortment at very low prices |
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| Off-price Retailers/ Close-out Retailers |
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| offer an inconsistent assortment of brand name merchandise at low prices |
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Definition
· end-of-season merchandise that will not be used in following seasons |
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· merchandise that has minor mistakes in construction |
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| off-price retailers owned by manufacturers or department or specialty store chains |
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· outlet stores owned by a manufacturer |
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| also called e-tailing, online retailing, and internet retailing; a retail format in which the retailers communicate with customers and offer products and services for sale over the Internet |
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| a nonstore retail format in which the retail offering is communicated to a customer through a catalog |
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| communicate with their customers using letters and brochures |
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| General merchandise catalog retailers |
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Definition
| offer a broad variety of merchandise in catalogs that are periodically mailed to their customers |
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| Specialty Catalog Retailers |
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Definition
| focus on specific categories of merchandise, such as Victoria’s Secret, Sharper Image, and Lands’ End |
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· a retail format in which salespeople, frequently independent businesspeople, contract customers directly in a convenient location, either at the customer’s home or at work |
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| salespeople encourage people to act as hosts and invite friends or coworkers to a “party” at which the merchandise is demonstrated |
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| people serve as master distributors, recruiting other people to become distributors in their network |
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| develops when the firm and its program are desined to sell merchandise and services to other distributors rather than to end users |
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also known as T-commerce or teleshopping
a retail format in which customers watch a television program that demonstrates merchandise and then place orders for that merchandise, usually by telephone |
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Definition
| programs, typically 30 minutes long, that mix entertainment with product demonstrations and then solicit orders placed by telephone |
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| Direct-response advertising |
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Definition
| includes advertisements on television and radio that describe products and provide an opportunity for consumers to order them |
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| Vending Machine Retailing |
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| a nonstore format in which merchandise or services are stored in a machine and dispensed to customers when they deposit cash or use a credit card |
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| firms that primarily sell services rather than merchandise, are a large and growing part of the retail industry |
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| Wholesale-sponsored voluntary cooperative group |
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| an organization operated by a wholesaler offering a merchandising program to small, independent retailers on voluntary basis |
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| 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 |
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| retailers that sell merchandise or services through more than one channel |
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| catalogs with magazine-type editorial content |
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| networks of people who seek information, products, and services and communicate with one another about specific issues, also help customers solve problems by providing information not readily available through other channels |
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| people who participate in vitrual communites to obtain not just information for future use but also an enhanced emotional connection to other participants in the shopping experience |
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| provides customers with the opportunity to click a button at anytime and have an instant messaging e-mail or voice conversation with a customer service representative |
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| small computer program that provides identifying information installed on your hard drive |
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| the percentage of consumers who buy the product after viewing it |
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| the percentage of total purchases made by a customer from that retailer |
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| occurs when a manufacturer sells directly to consumers, bypassing retailers |
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| the steps consumers go through when buying a product or service, begins when customers recognize an unsatisfied need |
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| needs motivating consumers to go shopping to accomplish a specific task |
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| needs motivating consmers to go shopping for pleasure |
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Definition
| the pattern of buying both premium and low-priced merchandise or patronizing both expensive, status-oriented retailers and price-oriented retailers |
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| the stage in the buying process in which a customer seeks additional information to satisfy a need |
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| information in customer's memory, such as names, images, and past experiences with different stores |
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| refer to information provided by ads and other people |
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| Everyday Low Pricing Strategy |
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Definition
| maintains the continuity of retail prices at a level somewhere between the regular nonsale price and the deep discount sale price of the retailer's competitors |
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| Multiattribute Attitude Model |
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Definition
| based on the notion that customers see a retailer, a product, or a service as a collection of attributes or characteristics |
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| the set of alternatives the customer evaluates when making a selection |
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| a postconsumption evaluation of how well a store or product meets or exceeds customer expectations |
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| the evaluation of merchandise or services after the customer has purchased and consumed them |
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| a purchase decision process in which customers devote considerable time and effort to analyzing their alternatives |
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| a purchase decision process involving a moderate amount of effort and time |
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| a purchase decision process involving little or no conscious effort |
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| customers like and consistently buy a specific brand in a product category |
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| customers like and habitually visit the same store to purchase a type of merchandise |
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| includes one or more people whom a person uses a basis of comparison for beliefs, feelings, and behaviors |
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| customers who like a store so much that they actively share their positive experiences with friends and family |
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| the meaning, beliefs, morals, and values shared by most members of a society |
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| distinctive groups of people within a culture |
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| a group of customers whose needs are satisfied by the same retail mix because they have similar needs |
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| the definition of the segment clearly indicates what the retailer should do to satisfy its needs |
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Definition
| the retailer is able to determine which customers are in the market segment |
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Definition
| the retailer can target promotions and other elements of the retail mix to consumers in the segment |
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segmentation of potential customers by where they live
- can be segmented by countires, states, cities, and neighborhoods
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Definition
| groups of consumers on the basis of easily measured, objective characteristics such as age, gender, income, and education |
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| Geodemographic Segmentation |
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Definition
| uses both geographic and demographic characteristics to classify consumers |
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| Lifestyle or Psychographics |
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Definition
| refers to how people live, how they spend their time and money, what activities they pursue, and their attitudes and opinions about the world in which they live |
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| Lifestyle Segmentation is VALS |
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Definition
| a tool used to categorize customers into eight lifestyle segments. Based on responses to surveys conducted by SRI Consulting Business Intelligence |
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Definition
| a method of segmenting a retail market based on customer needs in a specific buying situation, such as a fill-in shopping trip versus a weekly shopping trip |
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Definition
| a method of segmenting a retail market using multiple variables, including benefits sought, lifestyles, and demographics |
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Definition
| the market segment(s) toward which the retailer plans to focus its resources and retail mix |
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| a statement identifying (1) the retailer's target market, (2) format the retailer plans to use to satisfy the target market's needs, and (3) the bases upon which the retailer plans to build a sustainable competitive advantage |
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Definition
| describes the nature of the retailer's operations--that is, its retail mix that is designed to satisfy the needs of its target market |
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| Sustainable Competitive Advantage |
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Definition
| an advantage over the competition that is not easily copied and thus can be maintained over a long period of time |
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Definition
| a management orientation that focuses a retailer on determining the needs of its target market and satisfying those needs more effectively and efficiently than its competitors |
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Definition
| a group of consumers with similar needs that a group of retailers can service using a similar retail format to satisfy them |
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Definition
| involves the design and implementation of a retail mix to create an image of the retailer in the customer's mind relative to its competitors |
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| the coordinated and periodic copying of data from various sources, both inside and outside the enterprise, into an environment ready for analytical and informational processing |
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| Private-Label Brands aka Store Brands |
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Definition
| products developed and marketed by a retailer and available only from that retailer |
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| Market Penetration Growth Opportunity |
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Definition
| involves realizing growth by directing efforts toward existing customers using the retailer's present retailing format |
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Definition
| sales associates in one department attempt to sell complementary merchandise from other departments to their customers |
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| Market Expansion Growth Opportunity |
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| a strategic investment opportunity that emplys the existing retailing format in new market segments |
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| Retail Format Development Growth Opportunity |
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| an opportunity in which a retailer develps a new retail format-- a format with a different retail mix-- for the same target market |
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| Diversification Growth Opportunity |
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Definition
| one in which a retailer operates a new retail format directed toward a market segment that's not currently served by the retailer |
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| Related Diversification Growth Opportunity |
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Definition
| the retailer's present target market or retail format shares something in common with the new opportunity |
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| Unrelated Diversification |
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| lacks any commonality between the present business and the new business |
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| describes diversification by retailers into wholesaling or manufacturing |
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| Occurs when a retail firm invests in and owns a division or subsidiary that operates in a foreign country |
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| formed when the entering retailer pools its resources with a local retailer to form a new company in which ownership, control, and profits are shared |
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| a collaborative relationship between independent firms |
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| offers the lowest risk and requires the least investment |
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| Strategic Retail Planning Process |
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| entails the set of steps a retailer goes through to develop a strategic retail plan |
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Definition
| a broad description of a retailer's objectives and the scope of activities it plans to undertake |
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| an analysis of the opportunties and threats in the retail environment and the strengths and weaknesses of the retail business relative to its competitors |
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Definition
| institute conditions in a retail market that make it difficult for other firms to enter the market, such as scale economies, customer loyalty, and the availability of good locations |
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Definition
| cost advantages due to a retailer's size |
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| Bargaining Power of Vendors |
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Definition
| a characteristic of a market in which retailers are so dependent on large, important vendors that their profits are adverstly affected |
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Definition
| the frequency and intensity of reactions to actions undertaken by competitors |
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| Strengths and Weaknesses Analysis |
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Definition
| indicates how well the business can seize opportunities and avoid harm from threats in the environment |
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