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McGraw-Hill/Irwin Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
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Retailing
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Understand the economic importance ofretailing and its role in the marketingchannel.
Cite evidence of the globalization of retailing.
Discuss some of the advances in retailing
technology.
Explain the reasons behind the growth ofnon-store retailing
After studying this chapteryou should be able to:
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Describe key factors in the retailmarketing environment, and understandhow they relate to retail strategy.
Cite important ethical and legal issuesfacing retailers.
After studying this chapteryou should be able to:
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The Role of Retailing
Retailing:
An important part of many marketing
channels, includes all the activities involved in
selling products and services to the ultimate,
or final, consumer.
Retail Sales:
Sales to final consumers; wholesale sales are
those to other businesses that in turn resell
the product or service, or use it in running
their own businesses.
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Economic Importance
Sales ProfitsCompany ($ millions) ($ millions) Employees
1. Wal-Mart 219,812 6,671 1,383,0002. Home Depot 53,553 3,044 256,3003. Kroger 50,098 1,043 288,0004. Sears Roebuck 41,078 735 310,0005. Target 39,888 1,368 223,5506. Albertsons 37,931 501 220,0007. Kmart 36,910 (95) 240,525
8. Safeway 34,301 1,254 193,0009. JC Penny 32,004 98 270,00010. Walgreen 24,623 886 106,000
In the U.S., 3 m il l ion retai lers generate
$2.5 tr i l l ion in revenues annual ly!
R i U i
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Retai ers Uniquenessin the Channel
Provide
ProductAssor tment
Emphasize
StoreAtmospher ics
Sell Smaller
Quant i ties o f Product
More Frequently
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Types of Retailers
IndependentRetailers:
Own and operate
only one retailoutlet.
Chains:
A retail chain ownsand operates
multiple retailoutlets.
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Types of Retailers
Franchising: Retail franchising is a form of chain
ownership in which a franchisee pays the
franchisor (parent company) fees orroyalties and agrees to run the franchise byprescribed norms, in exchange for use of thefranchisors name.
McDonalds
Jiffy Lube
Holiday Inn
There are 3,000 franchis e compan ies
in the U.S. that operate 558,000
separate establ ishments!
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Top 10 InternationalRetail Franchises
1. McDonalds
2. Great Wraps
3. Subway
4. Kentucky Fried Chicken
5. Kumon Math and Reading Centers
6. Meineke Discount Muffler Shops
7. TCBY Treats
8. Thrifty Car Rental9. Blimpie Subs & Salads
10. Mail Boxes Etc.
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Types of Retailers
Leased Departments: Leased departments are sections in a retail
store that the owner rents to a secondparty.
Cooperatives
Retail Cooperatives: Independent retailers banding together to
counter chain store competition.
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Trends in Retailing
GlobalRetailing Technological
Advances Stronger
CustomerService
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Nonstore Retailing
Direct Retailing
Direct Marketing
E-Retailing
Direct Selling
Vending Machine Sales
Stores account for
90% o f retai l sales, bu t
non store retai l ing is
grow ing faster thanstore-based
retai l ing!
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Developing Retailing Strategy
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Uncontrollable Factors
Consumers
Competition
Economic ConditionsSeasonality
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Controllable Factors
Location
Central Business District (CBD)
Strip Centers
Shopping Malls
Freestanding Sites
Goods and Services
Pricing
Marketing Communications
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Types of Strategy Mix
Specialty Stores
Department Stores
Convenience Stores
Margin and Turnover StrategyMixes
Gross Margin
Inventory Turnover
Ethi l d L l I
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Ethical and Legal Issuesin Retailing
Consumer Fraud
Supplier Labor Practices
Retail TheftSlotting Allowances
Use of CustomerInformation
Ecological Considerations