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PPT 1-1
5th Edition5th Edition
PPT 1-2McGraw-Hill/IrwinLevy/Weitz: Retailing Management, 5/e Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to the Introduction to the World of RetailingWorld of Retailing
Chapter 1Chapter 1
PPT 1-3
• Retailing – a set of business activities that adds value to the products and services sold to consumers for their personal or family use.
• A retailer is a business that sells products and/or services to consumers for personal or family use.
What is Retailing?
PPT 1-4
Examples of Retailers
• Retailers:
-Sears, Holiday Inn, McDonalds, Amazon.com, Jiffy Lube, AMC Theaters, American Eagle Outfitter, FAO Schwartz, Kroger
• Firms that are retailers and wholesalers that sell to other business as well as consumers:
-Office Depot, The Home Depot, United Airlines, Bank of America, Sams Clubs
PPT 1-5
How Retailers Add Value
• Breaking Bulk
-Buy it in quantities customers want
• Holding Inventory
-Buy it at a convenient place when you want it
• Providing Assortment
-Buy other products at the same time
• Offering Services
-See it before you buy, get credit, layaway
PPT 1-6
Doll can be bought on credit or put on
layaway
Doll is featured on floor display
Doll is offered in convenient locations in quantities of oneDoll is developed in
several styles
How Retailers Add Value
Doll is developed at manufacturer
The value of the product and service increases as the retailer performs functions.
PPT 1-7
Manufacturer’s Perspective
The Four P’s of Marketing
Distribution
Retailers are part of the
distribution channel
Retailers are part of the
distribution channelProduct
Price
Promotion
PPT 1-8
Distribution Channel
Distribution ChannelPPT 1-4 Distribution Channel
PPT 1-4
PPT 1-9
Accounting Finance
MISOperations
Marketing
Human Resources
Retailers are a Business Like Manufacturers
PPT 1-10
Decision Variables for Retailers
Customer Service
Store Design and Display
MerchandiseAssortment
Communication Mix
LocationPricing
Retail
Strategy
PPT 1-11
Economic Significance of Retailing
• Over $2.5 trillion in annual U.S. sales
-greater than medical care, housing, recreation combine
• Employs 17% of population
-about the same as manufacturing and growing
• Management training opportunities
• Entrepreneurial opportunities
PPT 1-12
Retailing is Big Part of Economy
Services (50%)
Government (15%)
Manufacturing(18%)
Retail (17%)
PPT 1-13
Projected Job Gains (2000 – 2010)
PPT 1-14
Nature of Retail Industry is Changing
Mom and Pop Store
To Today’s Retailer
PPT 1-15
Retailing is a High Tech Industry
- Selling Merchandise over the Internet
- Using Internet to manage supply chains
- Analyze POS data to tailor assortments to stores
- Computer systems for merchandise planning
PPT 1-16
Globalization of Retailing
Source Merchandise From Around the World
Wal-Mart Operates in U.S., China, Mexico, UK, Germany
Carrefour has Stores in 25 Countries
PPT 1-17
Retail Environment Differs Across the Globe
US JapanConcentration High Medium
Store Size Big Small
Role of Low High
Wholesaling
Efficiency High Low
PPT 1-18
Retail Management Decision Process
PPT 1-19
JC Penney’s Strategic Evolution
• Main Street private label soft goods retailer
• Changes in environment -- increased disposable income, growth of suburbs, interstate highway program
• Emulate Sears in enclosed suburban malls
• Focus on soft goods -- drop automotive, sporting goods, hardware
• Develop catalog, develop electronic retailing
• Future (?)
PPT 1-20
Sears’ Strategic Evolution
• Large number of merchandise categories -- appliances, hardware, apparel
• Malls evolved into places for buying soft goods, hard goods sold at category killers
• The Softer Side of Sears
• Refocused on value -- Testing carts in stores
• Acquired Lands’ End
• Reviewed training program for new managers
PPT 1-21
Whole Foods Implementation
Strategy - organic and natural foods supermarket chain
Assortment beyond organic/natural foods
Private labels - Whole Food™, 360 Day Value™
Love, trust, and employee empowerment
Equality in compensation
PPT 1-22
Hot Topic’s Retail Mix
Retail Strategy
Customer Service Location
Merchandise
Assortment
PricingCommunication
Mix
Store Design
And Display
PPT 1-23
Hot Topic’s Retail Mix
Enclosed malls
Customer Service
MerchandiseAssortment
PricingCommunication Mix
Store DisplayAnd Design
Location Strategy
PPT 1-24
Hot Topic’s Retail Mix
Location
PricingCommunication
Mix
Store Design and Display
Customer Service
Many Different Hot Band
T-shirts and Accessories
Assortment Strategy
PPT 1-25
Hot Topic’s Retail Mix
Location
Communication Mix
Store Design and Display
Customer Service
Merchandise Assortment
Modest with Sales
Pricing Strategy
PPT 1-26
Hot Topic’s Retail Mix
Communication Mix
TV and Magazine Ads
Store DesignAnd Display
Customer Service Location
Merchandise Assortment
Pricing
PPT 1-27
Hot Topic’s Retail Mix
Store Design and Display
Heavy Metal, Gothic Look
Customer Service Location
Merchandise Assortments
PricingCommunication
Mix
PPT 1-28
Hot Topic’s Retail Mix
Customer Service
Modest
Location
Merchandise Assortment
Pricing
Communication Mix
Store Design and Display
PPT 1-29
Macy’s Retail Mix
Retail Strategy
Customer Service
Location
MerchandiseAssortment
PricingCommunication Mix
Store DesignAnd Display
PPT 1-30
Macy’s Retail Mix
Enclosed Malls
Customer Service
MerchandiseAssortment
PricingCommunication Mix
Store DisplayAnd Design
Location Strategy
PPT 1-31
Macy’s Retail Mix
Location
PricingCommunication
Mix
Store Design and Display
Customer Service
Many Items in Apparel and
Soft Home
Assortment Strategy
PPT 1-32
Macy’s Retail Mix
Location
Communication Mix
Store Design and Display
Customer Service
Merchandise Assortment
Moderate with Frequent Sales
Pricing Strategy
PPT 1-33
Macy’s Retail Mix
Communication Mix
TV, Newspaper Ads and Special Events
Store DesignAnd Display Merchandise
Assortment
Pricing
Customer Service Location
PPT 1-34
Macy’s Retail Mix
Store Design and Display
Ring with Displays
Customer Service Location
Merchandise Assortments
PricingCommunication
Mix
PPT 1-35
Macy’s Retail Mix
Customer Service
Modest
Location
Merchandise Assortment
Pricing
Communication Mix
Store Design and Display
PPT 1-36
Wal-Mart’s Retail Mix
Retail Strategy
Customer Service
Location
MerchandiseAssortment
PricingCommunication Mix
Store DesignAnd Display
PPT 1-37
Wal-Mart’s Retail Mix
Free-standing Stores
Customer Service
MerchandiseAssortment
PricingCommunication
Mix
Store DisplayAnd Design
Location Strategy
PPT 1-38
Wal-Mart’s Retail Mix
Location
PricingCommunication
Mix
Store Design and Display
Customer Service
Large Number of Categories
Few Items in Each Category
Assortment Strategy
PPT 1-39
Wal-Mart’s Retail Mix
Location
Communication Mix
Store Design and Display
Customer Service
Merchandise Assortment
Low, EDLP
Pricing Strategy
PPT 1-40
Wal-Mart’s Retail Mix
Communication Mix
TV and NewspaperInsert Ads
Location
Pricing
Store Design and Display
Customer Service
Merchandise Assortment
PPT 1-41
Wal-Mart’s Retail Mix
Store Design and Display
Basic, Special Displays
for Products
Customer Service Location
Merchandise Assortments
PricingCommunication
Mix
PPT 1-42
Wal-Mart’s Retail Mix
Customer Service
Limited
Location
Merchandise Assortment
Pricing
Communication Mix
Store Design and Display
PPT 1-43
Career Opportunities in RetailingStart Your Own Business
• Walton Family (Wal-Mart)
• Fisher (The Gap)
• Wexner (limited)
• Menard (Menard’s)
• Marcus, Blank (The Home Depot)
• Kellogg (Kohl’s)
• Schulze (Best Buy)
• Levine (Family Dollar)
• Gold (99Cent Only)
List of Retail Entrepreneurs on Forbes 400 Richest Americans
PPT 1-44
Misconceptions About Careers in Retailing
• Don’t need college
• Low pay
• Long hours
• Boring
• Dead-end job
• No benefits
• Everyone is part-time
• Unstable environment
PPT 1-45
Why You Should Consider Retailing
• Entry level management positions
-Department manager or assistant buyer/planner
-Manage and have P&L responsibility on your first job
• Starting pay average with great benefits
- Some retailers pay graduate school
• No two days are alike
• Buying for financially oriented people
• Management for people people
PPT 1-46
Types of Jobs in Retailing
Most entry level jobs are in store management or buying, but…
retailers also have staff specialists:
--accounting and finance
--real estate
--human resource management
--supply chain management
--advertising
--public affairs