Final Exam Flashcards
(115 cards)
1
Q
What is Site Selection?
A
- Investigate alternative trading
2. Determine what is desirable
2
Q
Types of Locations
A
- Isolated Store- free standing, no adjacent retailers
- Unplanned business district- 2 or more stores situated together in such a way that total arrangement/mix of stores are not due to prior long range planning
- Planned business district- allows establishment of commercial shopping centers which conform to overall development
3
Q
Advantages of Isolated Stores
ex. Walmart, Costco, 7-Eleven
A
- no competition
- low rental cost
- flexibility
- no rules
- stores and big box
- adaptable
- easy parking
4
Q
Disadvantages of Isolated Stores
A
- no adjacent retailers
- difficult to attract money
- travel distance requirement
- lack of variety
- high advertising expense
- no cost sharing
- restricted zoning laws
- self-built, no renting
5
Q
Types of business districts
A
central, secondary, and neighborhood business districts
6
Q
What is a central business district?
A
exists in great density, downtown, hub of retailing!
7
Q
Adv of central
A
prices, store types, customer service, trans access, proximity to facilities
8
Q
Disadv of central
A
inadequate parking, travel time, poor image of central cities, high rent, traffic, congestion, discontinuity of offerings
9
Q
What is a secondary business district?
A
unplanned shopping usually bound by the intersection of 2 major cities
10
Q
What is a neighborhood business district?
ex. dry cleaners, barber, liquor store, supermarket
A
appeals to needs of shopping/service needs
11
Q
Adv of neighborhood business
A
good location, convenient hours, parking, less hectic
12
Q
Disadv of neighborhood business
A
limited goods & services
13
Q
___% of retail sales still completed at a brick&mortar
A
90%
14
Q
Steps of choosing a store location
A
- Evaluate: alternative geographic locations
- Determine: whether to locate as an isolated store
- Select: the store type
- Analyze: alternate sites contained in the specific goods of services
15
Q
String
ex. car dealers, restaurants
A
group of retailer stores w a similar/compatible product lines located on a street or highway
16
Q
Adv if string
A
similar to isolation
competition at location
17
Q
Planned Shopping Centers
A
- architecturally unified commercial establishments that is centrally owned or managed
- accompanied by parking facilities
- designed/operated as a unit w balance elements
18
Q
Adv of malls
A
- well-rounded assortments
- strong suburban populations
- one-stop-shop for families
- cost sharing
- transportation access
- pedestrian traffic population
- popularity
19
Q
Disadv of malls
A
- limited flexibility
- higher rent
- restricted offerings
- management group may need approval
- competition
- requirements for association
- too many malls- lose traffic
20
Q
Types of Planned shopping centers
A
Regional, Community, and neighborhood
21
Q
Regional mall
A
- mega mall
- 1 to 2 department
- 50-100 smaller stores
- recreating the shopping variety of a central city in suburbia
22
Q
Community mall
A
- strip malls
- bunch of department stores
- category killer
- several small stores
23
Q
Neighborhood
A
- small plaza
- supermarket with smaller stores
24
Q
Straight Traffic
A
Places displays and aisles in a rectangular or gridiron pattern
25
Curving Traffic
Places displays and aisles in a free-flowing pattern
26
Retail balance
-mix of stores within district or center
27
When does retail balance occur?
balance occurs when the number of stores for each merchandising or service category id equal to market potential, proper mix of stereotypes
28
lease types
-Straight lease, percentage lease, graduated lease
29
Straight lease
pay a determined amount of rent
30
Percentage lease
pay % of sales or profit for rent
31
Graduated lease
precise rent increase over stated period 3% on rent each year
32
Pricing
profitability, satisfy customers, image consistency, meet ROI (return on investment)
33
Factors affecting retail price strategy
consumers, government, manufactures, current and potential
34
Insurance issues
- rising premiums
- reduced scope of coverage by insurers
- fewer insurers servicing retailers
- greater needs for insurance against environmental risks
35
outsourcing
- retailer pays outside party to undertake or more of its operating functions
- more retailers have turned to outsourcing
36
Crisis Management
- there should be contingency plans for as many different crisis situations as possible
- essential info should be communicated to all affected parties as soon as a crisis occurs
- cooperation not conflict among the parties involved
- responses should be prompt
- chain of command clear
37
Resource Allocation
- capital expenditures: long-term assets in fixed assets
- Operating Expenditures: short term & administrative costs in running a business
- Opportunity costs- weighing the benefits investing in or retailer vs. another
38
Operations blueprint
- systematically lists all the operating functions to be performed
- the retailer specifies in detail every operating function in form the open to close
39
Store format size and allocation
Prototype stores, rationalized retailing program, Top-down space management, Bottom-up space management
40
Top-down space management
most common, retailer starts with it total available space
41
Bottom-up
retailer begins planning at the individuals product level & proceeds to the category, total store, and overall company levels.
42
Budgeting
- outlines a retailers planned expenditures for a given time based on expected performance
- costs are linked to satisfying to get market, employee, goals
- who has authority of approving
43
Human Resource Management
the process of recruiting, selecting, training supervising and compensating personnel
44
Cost of employee turnover
- recruiting and hiring new employees
- training costs
- management time
- pricing errors
45
Specific HR environment of retailing
-often a "1st job" for people, little experience
-retail personnel are visible to customer
grooming attitudes are important
now do you not discriminate
-a very diverse workforce is often in retail
-finalizing retail personnel can be challenging
-retail requires lots of HR help
-open long shifts- varying schedules
-willingness to work retail hours
-days, evenings, weekends, holidays
46
HR management process
- recruitment
- selection
- training
- compensation
- supervisor
47
Keep in mind what in HR
diversity and labor loss, employee pricing
48
Training
pertaining- company history, culture, chain of demand, job duties, on boarding, training programs
49
Compensation
Direct- salary and common
| Indirect- health care, profit sharing, paid time off, employee discounts, clothing allowance
50
Supervision
the manner of providing a job environment that encourages employee accomplishment
51
Job motivation
drive within people to attain work related goals
minimum expectations
desired goals
52
Operation Management
efficient and effective implementation of policies/tasks necessary to satisfy firms
53
Profit & Loss Statement
income statement, summary of retailers' revenues expenses in time review of overall, specific costs, analyze profit
54
Major components of profit law statement
Net sales- revenues received by retailer during given period
Cost of Goods Sold- amount a retailer pays to acquire the merchandising sold
Gross Profit Margin
Operating Cost- cost of running a business
Taxes
Net Profit After
55
Balance Sheet
itemizes a retailers asset, liabilities and net worth at specific time
56
Assets
liability + net worth
57
Assets
any items a retailer owns w monetary value
58
Liabilities
financial obligations a retailer incurs in operating a business
59
Net worth
represents the value of a business after dedicating all financial obligations
60
Funding Sources
- mortgage refinance due to low interest rates
- REIT (Retail-Estate-Investment, Trust) to fund construction
- Company dedicated to owning and operating income- producing real estate
- Initial Public Offerings (IPO)
- Bankruptcy and Liquidations: allow retailers to safeguard against mounting debt and continue in business
- Liquidation: firms ultimately go out of business
61
Overall Pricing Objective
Market Penetration- sets low prices, in order to sell many units, seeks the price-oriented consumer
62
Market Skimming
sets premium prices, attracts consumers less concerned w price
63
Demand oriented pricing
prices set based on consumer decisions
64
Price quality association
high price = high quality
| low price = low quality
65
Prestige pricing
assumes customers will not buy goods and services priced too low
66
Cost oriented pricing
retailer sets a price floor, the minimum price acceptable so it can reach profit goals
67
Customary pricing
establish pricing and have customers take them for granted
EDLP- Everyday Low Prices
EDV- Everyday Value
low prices offered everyday, usually excluded from additional sales
68
Setting up a retail organization involves..
-tasks
-policies
-resources
-authority
-responsibilities
-rewards
to effectively and efficiently satisfy the needs of their target market, employees, and management
69
Small independent retailers
owner/manager oversees
70
Mazor plan of organization
- developed by Paul Mazor in 1927
| - divides all tasks into 4 basic functions
71
What are Mazors 4 basic functions?
1. Merchandising- buying, selling, ect..
2. Publicity- PR, advertising, visual merchandising
3. Store Management- operations
4. Accountability- inventory, finance
72
What is Mazor's plan derivative
- main store control
- separate store organization
- equal store organization
73
Main store control
Head quarters oversees and operates different bunches
- everything is centralized, managed, bunch managers hire, supervise employees
- this format is best when there are only a few bunches
- differences tend to be overlooked
74
Separate store control
- each branch has its own buying responsibilities
- merch managers are placed directly in the bunches
- coordination can be a problem among staff
- this format is best if stores are large, dispersal, wide customer tasks
75
Equal store organizations
-centralized buying= brunch units w status
-buying functions managed locally
-selling functions managed locally
-money department stores and chains today use this format
many functional divisions
central authority
standardized operations
limited decentralization allows branch to adapt to localities
GMM= Woman's Apparel + Acc.
DMM= Designer Apparel Buyers/American
76
Price Elasticity of Demand
the sensitivity of customers to price charges in terms of the quantities they will buy
77
Price Inelastic
Large price change results in little change in amount purchased
78
Market segments and their price sensitivity
Economic Consumers- usually seek lowest price
Status-Oriented- will pay more for things of status/prestige
Assortment oriented consumers- will shop retailers w the biggest assortment, not necessarily the lowest price
Personalized consumers- seek customer service above price
Convenience oriented- will shop retailers most convenient to them over service price
79
The Gov. and Retail Pricing
Horizontal Price Fixing: agree to set prices
| Vertical Price Fixing: manufactures control retail prices
80
What does MSRP stand for?
Manufactured Suggested Retail Price
81
Types of pricing
one price policy, flexible pricing, odd pricing, leader pricing, multiple unit pricing, and price lining
82
odd pricing
- retail pricing are set at levels below even dollar values
| - type of psychological pricing for customer
83
leader pricing "doorbuster sales"
-retailer advertises and sells selected items in their assortment at less than usual profit margins to increase customer traffic
84
Retail Promotion
any communication by retailer that informs persuades and or reminds the target market about any aspect of that firm
85
elements of a promotional mix
advertising
public relations
sales promotion
digital marketing
86
objectives of advertising
- lifting short-term sales
- increasing customer traffic
- developing, reinforcing, a retail image
- informing customer about goods/services our company attributes
- developing demand for private brands
87
advantages of advertising
-attracts large audiences
-low cost per contact
-many alternatives available
-control over message contact
-message study possible
-editorial content surrounds ad
self service operations available
88
disadvantages of advertising
- standard messages lack flex
- some media requires large investments
- geographic flex limited
- some media requires long lasting time
- some media has high
- message can be standardized
- some media limit availability to provide detailed info
89
advantages of media
- legacy (papers, radio, tv)
- outdoor media (bill boards, transit)
- digital media (pay per click, affiliate marketing, native advertising)
90
disadvantages of media
- can only handle so much
- high cost
- doesnt get customers in store
- self-service discouraged
91
Types of sales positions
- order taker: sales person performs sales functions
| - order getter: actively involved with informing and persuading the customer
92
Personal sales functions
greet - customer wants - show research - give presentation - demonstrate - questions - close
93
Sales promotion
encompasses the paid communication activities other than advertising "everything else"
94
Obj of sales promotion
- increasing long term sales volume
- maintaining customer loyalty
- emphasizing novelty
95
Adv of sales promotion
- eye catching appeal
- distinctive themes and tools
- additional value for customer
- draws in traffic
- maintain customer loyalty
- fun for customers
96
Disadv. of sales promotion
- difficult to terminate
- possible damage retailers image
- more stress on frivolous selling points
- short term effects only
- used as a supplement
97
Public relations
any communication that fosters a favorable for a retailer
- non-personal or personal
- paid or non paid
- sponsor controlled or not
98
Publicity
any non personal form of relations whereby messages are transmitted through mass media, the time or space provided by the media
ex. model poses for brand, read an article
99
PR obj.
- increase awareness of the retailer
- maintain or improve company image
- show the retailer as a contributor to the publics quality of life
- demonstrate innovativeness
- presenting a favorable message believable
- minimize total promotional costs
100
PR adv.
- image presented can be enhanced
- more credible source
- no cost
- mass audience addressed
- carry over effects
- people pay more attention to articles to clearly identify
101
PR disadvantages.
- some retailers don't believe in spending money on an image related company
- little control over publicity image
- more suitable for short run
- costs for PR staff, planning activities and events
102
Personal selling
oral communication with 1 or more prospective customers for the purpose of sale
103
Personal selling obj.
- persuade customer to buy
- stimulate sales of impulse items or products related to customer basic purchases
- complete customer transaction
- feedback info to company decision making
- improve and maintain customer satisfaction
104
Adv. of personal selling
- message can be adapted
- high attention span
- many ways to meet needs
- better response
- media feedback
105
Disadv. of personal selling
- can only handle so much
- high cost
- doesnt get customers in store
- self-service discouraged
106
Cut-case Displays
Inexpensive display in which merchandise is left in the original carton
107
Dump bins
A case display that houses piles of sale clothing, marked-down books, or other products
108
Types of Digital Marketing-
Search Engine Optimization (SEO)- the process of optimizing your website to "rank" higher in search engine results pages, thereby increasing the amount of organic (or free) traffic your website receives.
Content Marketing- creation and promotion of content assets for the purpose of generating brand awareness, traffic growth, lead generation, and customers, blog posts, infographics
Social Media Marketing- promotes your brand and your content on social media channels to increase brand awareness, drive traffic, and generate leads for your business.
Email Marketing- communicating with your audiences via email to promote content, discounts and events, as well as to direct people toward the business's website.
109
Digital Marketing
Encompasses all marketing efforts that use an electronic device or the internet. Businesses leverage digital channels such as search engines, social media, email, and other websites to connect with current and prospective customers.
110
Point-of-Purchase Displays (POP)
Interior display that provides shoppers with information, adds to store atmosphere, and serves a substantial promotional role
111
Atmosphere
The psychological feeling a customer gets when visiting a retailer
112
Visual Merch
Proactive, integrated atmospherics approach to create a certain look, properly display products, stimulate shopping behavior, and enhance physical behavior
113
Retail image
How a retailer is perceived by customers and consumers
114
Gray Market Goods:
brand name products bought in foreign market or good store shipping from other retailers, low prices
115
Prototype stores
multi outlets conform to relativity uniform construction, layout, and operators
