berman ch 02 11e

8/12/2019 Berman Ch 02 11e

1/32

2-Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publ ishing as Prentice Hall2-11

Building andSustaining

Relationships inRetailing

BERMAN EVANS

1

RETAIL

MANAGEMENT:

A STRATEGIC

APPROACH11th Edition

BERM N EV NS

8/12/2019 Berman Ch 02 11e

2/32

2-Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publ ishing as Prentice Hall 2-22

Chapter ObjectivesTo explain what value really means and to

highlight its pivotal role in retailers

building and sustaining relationshipsTo describe how both customer

relationships and channel relationships maybe nurtured in todays highly competitive

marketplace

2

8/12/2019 Berman Ch 02 11e

3/32


Chapter Objectives (cont.)To examine the differences in relationship

building between goods and services retailers

To discuss the impact of technology onrelationships in retailing

To consider the interplay between retailersethical performance and relationships in retailing

3

8/12/2019 Berman Ch 02 11e

4/32


What is Value?The bottom line:

Consumers will demand more for less from the

shopping experienceThey will spend less time shopping

They will split the commodity-shopping trip from thevalue-added shopping trip

4

8/12/2019 Berman Ch 02 11e

5/32


What is Value? (cont.)Channel Perspective

Value is a series ofactivities andprocesses (the valuechain) that provide acertain value for theconsumer.

Customer Perspective

Value is a perceptionthat the shopper has of

the value chain.

It is the view of all thebenefits from a purchaseversus the price paid.

5

8/12/2019 Berman Ch 02 11e

6/32


Retail Value ChainRepresents the total bundle of benefits offered to

consumers through a channel of distribution

Store location and parking, retailer ambience,customer service, brands/products carried,product quality, retailers in-stock position,shipping, prices, image, and other elements

6

8/12/2019 Berman Ch 02 11e

7/32


Three Aspects of Value-Oriented

Retail Strategy

Expected

Augmented

Potential

7

8/12/2019 Berman Ch 02 11e

8/32


Potential Pitfalls to Avoid in Planning a Value-

Oriented Retail Strategy

Planning value solely from a price perspective

Providing value-enhanced services that customersdo not want or will not pay extra for

Competing in the wrong value/price segment

Believing augmented elements alone create value

Paying lip service to customer service

8

8/12/2019 Berman Ch 02 11e

9/32


Figure 2-2: A Value-Oriented Retailing

Checklist

Is value defined from a consumer perspective?

Does the retailer have a clear value/price point?

Is the retailers value position competitively defensible?

Are channel partners capable of value-enhancingservices?

Does the retailer distinguish between expected andaugmented value chain elements?

Has the retailer identified potential value chain elements? Is the retailers value-oriented approach aimed at a

distinct market?

Is the retailers value-oriented approach consistent?

9

8/12/2019 Berman Ch 02 11e

10/32


Figure 2-2: A Value-Oriented Retailing

Checklist (cont.)

Is the retailers value-oriented approach effectivelycommunicated?

Can the target market clearly identify the retailers

positioning?Does the retailers positioning consider sales versus

profits?

Does the retailer set customer satisfaction goals?

Does the retailer measure customer satisfaction levels? Is the retailer careful to avoid the pitfalls in value-oriented

retailing?

Is the retailer always looking out for new opportunitiesthat will create customer value?

10

8/12/2019 Berman Ch 02 11e

11/32

8/12/2019 Berman Ch 02 11e

12/32


Customer Service Expected customer

service is the service

level that customerswant to receive fromany retailer such asbasic employee

courtesy.

Augmented customerservice includes the

activities thatenhance theshopping experienceand give retailers a

competitiveadvantage.

12

8/12/2019 Berman Ch 02 11e

13/32


Figure 2-4: Classifying Customer Services

13

8/12/2019 Berman Ch 02 11e

14/32


Fundamental DecisionsWhat customer services are expected and what

customer services are augmented for a particular

retailer?What level of customer service is proper to

complement a firms image?

Should there be a choice of customer services?

Should customer services be free? How can a retailer measure the benefits of providing

customer services against their costs?

How can customer services be terminated?

14

8/12/2019 Berman Ch 02 11e

15/32


Figure 2-5: H-E-B Going Above and

Beyond

15

8/12/2019 Berman Ch 02 11e

16/32


Table 2-1a: Typical Customer Services

Credit

Delivery

Alterations/Installations

Packaging/giftwrapping

Complaints/Returnhandling

Gift certificates

Trade-ins

Trial purchasesSpecial sales

Extended store hours

Mail/phone orders

16

8/12/2019 Berman Ch 02 11e

17/32


Table 2-1b: Miscellaneous Customer Services

Bridal registry

Interior designers

Personal shoppersTicket outlets

Parking

Water fountains

Payphones

Baby strollers

Restrooms

Restaurants

BabysittingFitting rooms

Beauty salons

Fur storage

Shopping bags

Information

17

8/12/2019 Berman Ch 02 11e

18/32


Figure 2-6: Turning Around Weak Customer

Service

Focus on

Customer Concerns

Empower Frontline

Employees

Show That You Are

Listening

Express Sincere

Understanding

Apologize and Rectify

the Situation

18

8/12/2019 Berman Ch 02 11e

19/32


Principles of Category Management

Retailers listen more to customers

Profitability is improved because inventory moreclosely matches demand

By being better focused, each department is moredesirable for shoppers

Retail buyers are given more responsibilities andaccountability for category results

Retailers and suppliers must share data and bemore computerized

Retailers and suppliers must plan together

19

8/12/2019 Berman Ch 02 11e

20/32


Figure 2-7: Elements Contributing to Effective

Channel Relationships

20

8/12/2019 Berman Ch 02 11e

21/32

8/12/2019 Berman Ch 02 11e

22/32


Four Characteristics of

Services Retailing

Intangibility

Inseparability

Perishability

Variability

22

8/12/2019 Berman Ch 02 11e

23/32


Figure 2-8a: Characteristics of

Service Retailing

Intangibility

No patent protection possible

Difficult to display/communicate service benefits

Service prices difficult to set Quality judgment is subjective

Some services involve performances/experiences

23

8/12/2019 Berman Ch 02 11e

24/32


Figure 2-8b: Characteristics of

Service Retailing

Inseparability

Consumer may be involved in service production

Centralized mass production difficult Consumer loyalty may rest with employees

24

8/12/2019 Berman Ch 02 11e

25/32


Figure 2-8c: Characteristics of

Service Retailing

Perishability

Services cannot be inventoried

Effects of seasonality can be severe

Planning employee schedules can be complex

25

8/12/2019 Berman Ch 02 11e

26/32


Figure 2-8d: Characteristics of

Service Retailing

Variability

Standardization and quality control hard to achieve

Services may be delivered in locations

beyond control of management Customers may perceive variability

even when it does not actually occur

26

8/12/2019 Berman Ch 02 11e

27/32


Figure 2-9: Consumer Perceptions of

Service Retailing

27

8/12/2019 Berman Ch 02 11e

28/32

8/12/2019 Berman Ch 02 11e

29/32


Figure 2-11: Eddie Bauer: Strong Ethical

Sensibilities

29

8/12/2019 Berman Ch 02 11e

30/32


Figure 2-12: Understanding the Americans with

Disabilities Act

30

8/12/2019 Berman Ch 02 11e

31/32


Figure A2-1: Lessons in Service Retailing

31

8/12/2019 Berman Ch 02 11e

32/32

berman ch 02 11e

Documents