Berman Ch 01 11e Retail Management

1-1 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

An Introduction to Retailing RETAIL

MANAGEMENT: A STRATEGIC APPROACH 11th Edition

BERMAN EVANS


Chapter Objectives To define retailing, consider it from different

perspectives, demonstrate its impact, and note its special characteristics

To introduce the concept of strategic planning and apply it

To show why the retailing concept is the foundation of a successful business, with an emphasis on the total retail experience, customer service, and relationship retailing

To indicate the focus and format of the text


Retailing

Retailing encompasses the business activities involved in selling goods and services to consumers for their personal, family, or household use. It includes every sale to the final consumer.


Issues in Retailing How can we best serve our customers while earning a

fair profit? How can we stand out in a highly competitive

environment where consumers have so many choices? How can we grow our business while retaining a core

of loyal customers?


The Philosophy Retailers can best address these questions by

fully understanding and applying the basic principles of retailing, as well as the elements in a well-structured, systematic, and focused retail strategy.


Figure 1-1: Boom Times for Dunkin Donuts


Figure 1-2: Careers in Retailing


An Ideal Candidate for a Retailing Career

Must be a people person Must be flexible Should be decisive Must have analytical skills Must have stamina


Table 1-1: The 10 Largest Retailers in the United States

Rank Company Main Emphasis 1 Wal-Mart Full-line discount stores, supercenters,

membership clubs 2 Home Depot Home centers, design centers

3 CVS Caremark Drugstores

4 Kroger Supermarkets, convenience stores, jewelry stores

5 Costco Membership clubs

6 Target Full-line discount stores, supercenters

7 Walgreens Drugstores

8 Sears Holdings Department stores, specialty stores

9 Lowes Home centers

10 Safeway Supermarkets


Figure 1-4: A Typical Channel of Distribution

Manufacturer

Wholesaler Final Consumer

Retailer


Figure 1-5: The Retailers Role in the Sorting Process


Multi-Channel Retailing

A retailer sells to consumers through multiple retail formats: Web sites Physical stores


Figure 1-6: Brooks Brothers and Multi-Channel Retailing


Relationship Management Among Retailers and Suppliers

Disagreements may occur in the following areas: control over channel profit allocation number of competing retailers product displays promotional support payment terms operating flexibility


Distribution Types

Exclusive: suppliers make agreements with one or few retailers, designating such retailers as the only ones to carry certain brands or products within a specified geographic area

Intensive: suppliers sell through as many retailers as possible

Selective: suppliers sell through a moderate number of retailers


Figure 1-7: Comparing Distribution Types


Figure 1-8: Special Characteristics Affecting Retailers

Impulse Purchase

Popularity of

Stores

Retailers Strategy

Small Average

Sale


Retail Strategy

An overall plan for guiding a retail firm Influences the firms business activities Influences firms response to market forces


Six Steps in Strategic Planning 1. Define the type of business 2. Set long-run and short-run objectives 3. Determine the customer market 4. Devise an overall, long-run plan 5. Implement an integrated strategy 6. Evaluate and correct


Figure 1-9: Expect More. Pay Less at Target


Aspects of Targets Strategy Growth objectives Appeal to a prime

market Distinctive image Focus Customer service Multiple points of

contact

Employee relations Innovation Commitment to

technology Community

involvement Monitoring

performance


Figure 1-10: Applying the Retailing Concept

Customer Orientation

Coordinated Effort

Value-driven

Goal Orientation

Retailing Concept

Retail Strategy


Figure 1-11: The Build-A-Bear Experience: Never Boring


Customer Service Activities undertaken by a retailer in conjunction

with the basic goods and services it sells. This includes: Store hours Parking Shopper-friendliness Credit acceptance Salespeople


Figure 1-12: A Customer Respect Checklist

Do we trust our customers? Do we stand behind what we sell? Is keeping commitments to customers important to our company? Do we value customer time? Do we communicate with customers respectfully? Do we treat all customers with respect? Do we thank customers for their business? Do we respect employees?


Relationship Retailing Retailers seek to establish and maintain long-

term bonds with customers, rather than act as if each sales transaction is a completely new encounter Concentrate on the total retail experience Monitor satisfaction Stay in touch with customers


Effective Relationship Retailing Use a win-win approach

It is easier to keep existing customers happy than to gain new ones

Develop a customer database Ongoing customer contact is improved with

information on peoples attributes and shopping behaviors


Approaches to the Study of Retailing

Institutional Functional

Strategic


Parts of Retail Management: A Strategic Approach

Building relationships and strategic planning Retailing institutions Consumer behavior and information gathering Elements of retailing strategy Integrating, analyzing, and improving retail strategy


All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in

any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United

States of America.

Chapter 1Chapter ObjectivesRetailingIssues in RetailingThe PhilosophyFigure 1-1: Boom Times for Dunkin DonutsFigure 1-2: Careers in RetailingAn Ideal Candidate for a Retailing CareerTable 1-1: The 10 Largest Retailers in the United StatesFigure 1-4: A Typical Channel of DistributionFigure 1-5: The Retailers Role in the Sorting ProcessMulti-Channel RetailingFigure 1-6: Brooks Brothers and Multi-Channel RetailingRelationship Management Among Retailers and SuppliersDistribution TypesFigure 1-7: Comparing Distribution TypesFigure 1-8: Special Characteristics Affecting RetailersRetail StrategySix Steps in Strategic PlanningFigure 1-9: Expect More. Pay Less at TargetAspects of Targets StrategyFigure 1-10: Applying the Retailing ConceptFigure 1-11: The Build-A-Bear Experience: Never BoringCustomer ServiceFigure 1-12: A Customer Respect ChecklistRelationship RetailingEffective Relationship RetailingApproaches to the Study of RetailingParts of Retail Management: A Strategic ApproachSlide Number 30

Documents

Berman Ch 01 11e Retail Management