01 intro of word retailing

8/7/2019 01 Intro of word retailing

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McGraw-Hill/IrwinRetailing Management, 6/e Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 1

Introduction to the World of Retailing


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What is Retailing?

Retailing a set of business activities thatadds value to the products and services

sold to consumers for their personal orfamily use.

A retaileris a business that

sells products and/or servicesto consumers for personal orfamily use.

James Darell/Getty Images


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The Distribution Channel

Distribution ChannelPPT 1-4


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Examples of Retailers

Retailers:Kohls, Macys, Wendys,Amazon.com, Jiffy Lube, AMCTheaters, American Eagle

Outfitter, KrogerFirms that are retailers andwholesalers that sell to otherbusiness as well as

consumers:Office Depot, The Home Depot,United Airlines, Bank of America,Costco

The McGraw-Hill Companies,

Inc./Andrew Resek,photographer

The McGraw-HillCompanies, Inc./JohnFlournoy, photographer


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How Retailers Add Value

Break Bulk-Buy it in quantities customers want

Hold Inventory

-Buy it at a convenient place when you

want it

Provide Assortment

-Buy other products at the same time

Offer Services

-See it before you buy, get credit,layaway

Ryan McVay/Getty Images


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How Retailers Add Value

The value of the product and service

increases as the retailer performs functions.

Bicycle is developed

at manufacturer

Bicycle isdeveloped inseveral styles

Bicycle is offered inconvenient locations

in quantities of one

Bicycle is featuredon floor display

Bicycle can bebought on credit or

put on layaway


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Worlds Largest Retailers


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Social and EconomicSignificance of Retailing

Community Support

Over $3.4 trillion in annual U.S. sales

greater than medical care, housing, recreationcombined

Employs 27 million people

21% of non-agricultural US workforce Management training opportunities

Entrepreneurial opportunities


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Retailing is Big Part of Economy

Services (45.8%)

Manufacturing (11.2%)Retail (21.8%)

Government

(16.6%)

Other 5.6%


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Retailers are a Business Like

Manufacturers

Accounting

Marketing

Finance

Human ResourcesOperations

MIS

The McGraw-Hill Companies,

Inc./Andrew Resek, photographer


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Nature of Retail Industry is Changing

Mom and Pop Store

To Todays Retailer


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Retailing is a High Tech Industry

Selling Merchandise overthe Internet

Using Internet to managesupply chains

Analyze POS data to tailor

assortments to stores

Computer systems formerchandise planning

Ryan McVay/Getty Images


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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

Don Farrall/Getty Images


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Comparison of Distribution ChannelsAcross the Globe


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Retail Management Decision Process


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JCPenneys Strategic Evolution

Main Street private label soft goods retailer

Changes in environment -- increaseddisposable 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

Stand alone stores

Centralized checkout


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Sears Holdings 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

New growth with Kmart


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Organic and natural foods supermarket chain

Assortment beyond organic/natural foods

Private labels - Whole Food, 360 Day Value Love, trust, and employee empowerment

Always innovation:

Candy Island

Lamar Street Greens

Fifth Street Seafood

In-store Massage Therapist

Whole Foods Implementation


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Claires Retail Mix

Enclosed malls

Customer Service

Merchandise

Assortment

PricingCommunication Mix

Store Display

And Design

Location Strategy


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Claires Retail Mix

Location


Store Design

and Display

Customer Service

Jewelry, accessories and

cosmetics for tweens and

teens

Assortment Strategy


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Claires Retail Mix

Location

Communication Mix

Store Design

and Display

Customer Service

Merchandise Assortment

Modest with Sales

Pricing Strategy


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Claires Retail Mix

Communication Mix

TV and Magazine Ads

Store Design

And Display

Customer ServiceLocation


Pricing


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Claires Retail Mix

Store Design and Display

Bright, fashionable and fun

boutique layout

Customer Service Location

Merchandise Assortments



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Claires Retail Mix

Customer Service

Modest

Location


Pricing

Communication Mix



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Macys Retail Mix

Retail Strategy


Merchandise

Assortment


Store Design

and Display


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Macys Retail Mix

Enclosed Malls

Customer Service

Merchandise

Assortment


Store Display

And Design

Location Strategy


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Macys Retail Mix

Location


Store Design

and Display

Customer Service

Many Items in Apparel

and Soft Home

Assortment Strategy


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Macys Retail Mix

Location

Communication Mix

Store Design

and Display

Customer Service


Moderate with

Frequent Sales

Pricing Strategy


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Macys Retail Mix

Communication Mix

TV, Newspaper Ads andSpecial Events

Store Design

And Display Merchandise Assortment

Pricing

Customer ServiceLocation


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Macys Retail Mix


Racetrack with Displays





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Macys Retail Mix

Customer Service

Modest

Location


Pricing

Communication Mix



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Targets Retail Mix

Retail Strategy


Merchandise

Assortment


Store Design

and Display


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Targets Retail Mix

Free-standing Stores

Customer Service

Merchandise

Assortment


Store Display

And Design

Location Strategy


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Targets Retail Mix

Location


Store Design

and Display

Customer Service

Large Number of Categories

Private Labels

Few Items in Each Category

Assortment Strategy


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Targets Retail Mix

Location

Communication Mix

Store Design

and Display

Customer Service


Low to Modest

Pricing Strategy


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Targets Retail Mix

Communication Mix

TV and Newspaper

Insert Ads


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Targets Retail Mix


Colorful, wide aisles displays

for products with a grid layout





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Targets Retail Mix

Customer Service

Limited

Location


Pricing

Communication Mix


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Ethical Situations for a Retail Manager

Should a retailer sell merchandise that is suspects was madeusing child labor?

Should it advertise that its prices are lowest in area even

though some items are not? Should a buyer accept an expensive gift from a vendor?

Should salespeople use high-pressure sales when they knowthe product is not the best for the customers needs?

Should a retailer give preference to minorities when making apromotion decision?

Should a retailer treat some customers better than others?

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Checklist for Making Ethical Decisions

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You are Faced with an Ethical Decision:What Can You Do?

Ignore your personal values and do whatyour company asks you to do you willprobably feel dissatisfied with your job .

Take a stand and tell your employer whatyou think. Work to change the policies.

Refuse to compromise your principles you could lose your job!

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Career Opportunities in RetailingStart Your Own Business

Walton Family (Wal-Mart)

Fisher (The Gap)

Wexner (limited)

Menard (Menards)

Marcus, Blank (The Home Depot)

Kellogg (Kohls) Schulze (Best Buy)

Levine (Family Dollar)

Gold (99Cent Only)

List of Retail Entrepreneurs on Forbes 400 Richest Americans

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Misconceptions About Careers inRetailing

Dont need college

Low pay

Long hours

Boring

Dead-end job

No benefits

Everyone is part-time

Unstable environment

No opportunity for women and minorities

The McGraw-Hill Companies, Inc./Andrew Resek, photographer

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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 and planning for financially analytically oriented

Management for people-people

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Types of Jobs in RetailingMost entry level jobs are in

store management or buying, but theres

-accounting and finance

-real estate

-human resource management

-supply chain management

-advertising

-public affairs

-information systems

-loss prevention

-visual merchandising

01 intro of word retailing

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