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Retailing > Test 2: Terminology > Flashcards

Test 2: Terminology Flashcards

1
Q

Complexity

A

The ease with which consumers can understand and use a new fashion

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2
Q

Cross-Shopping

A

A pattern of buying both premium and low-priced merchandise or patronizing expensive, status-oriented retailers and price-oriented retailers

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3
Q

Everyday Low Pricing (EDLP)

A

) A pricing strategy that stresses continuity of retail prices at a level somewhere between the regular nonsale price and the deep-discount sale price of the retailer’s competitors

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4
Q

Impulse Buying

A

A buying decision made by customers on the spot after seeing the merchandise.

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5
Q

Information Search

A

The stage in the buying process in which a customer seeks additional information to satisfy a need.

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6
Q

Lifestyle

A

Refers to how people live, how they spend their time and money, what activities they pursue, and their attitudes and opinions about the world they live in.

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7
Q

Mutliattribute Attitude Model

A

A model of customer decision making based on the notion that customers see a retailer or a product as a collection of attributes or characteristics. The model can also be used for evaluating a retailer, product, or vendor. The model uses a weighted average score based on the importance of various issues and performance on those issues

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8
Q

Postpurchase Evaluation

A

The evaluation of merchandise or services after the customer has purchased and consumed them.

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9
Q

Satisfaction

A

A post-consumption evaluation of the degree to which a store or product meets or exceeds customer expectations.

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10
Q

Store Advocates

A

Customers who like a store so much that they actively share their positive experiences with friends and family

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11
Q

Gentrification

A

A process in which old buildings are torn down or restored to create new offices, housing developments, and retailers.

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12
Q

Inner city

A

Typically a high-density urban area consisting of apartment buildings populated primarily by ethnic groups.

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13
Q

Main Street

A

The central business district located in the traditional shopping area of smaller towns, or a secondary business district in a suburb or within a larger city.

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14
Q

Accessibility

A

(1) The degree to which customers can easily get into and out of a shopping center; (2) ability of the retailer to deliver the appropriate retail mix to customers in the segment.

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15
Q

Customer Spotting

A

A technique used in trade area analysis that “spots” (locates) residences of customers for a store or shopping center.

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16
Q

Geodemographic Segmentation

A

A market segmentation system that uses both geographic and demographic characteristics to classify consumers.

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17
Q

Utilitarian Needs

A

satisfied when purchases accomplish a specific task

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18
Q

Hedonic Needs

A

satisfied when purchases accomplish a need for entertainment, emotional, and recreational experience as in department stores or specialty stores

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19
Q

Factors Affecting Amount of Information Search

A

Product Characteristic: Complexity, cost
Customer Characteristic: Past experience, perceived risk, time pressure
Market Characteristic: Number of alternative brands

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20
Q

Sources of Information (Internal, External)

A

Internal: Past Experiences, Memory
External: Consumer reports, advertising, word of mouth

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21
Q

How can retailers limit the information search?

A

Information from sales associate, provide an assortment of services, provide good assortments, everyday low pricing, credit

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22
Q

Consideration Set

A

The set of alternatives the customer evaluates when making a selection

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23
Q

Top-of-mind Awareness

A

Getting exposure on search engines like Google, try to be the top of the page; more stores in the same area

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24
Q

Ways to increase chances of store visit after getting into the consideration set

A

Increase Performance Beliefs of Your Store
Decrease Performance Beliefs About Competitor
Increase Importance Weight of Attributes on which You Have an Advantage
Add a New Benefit on which You Excel

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25
Q

Postpurchase Evaluation

A

Post-consumption evaluation of how well a store or product meets or exceeds customer expectations

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26
Q

3 Types of Buying Decisions

A

Extended Problem Solving: High financial or social risk
Limited Problem Solving: Some prior buying experience
Habitual Decision Making: Store brand, loyalty

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27
Q

Extended Problem Solving and how to engage customers

A
  • Financial, physical, and social risks

- Provide a lot of information and reduce risks for customers

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28
Q

Limited Problem Solving and how to engage customers

A

Involve moderate amounts of effort and time, occurs when customers have had prior experiences with products/services

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29
Q

Impulse buying

A

A common type of limited problem solving, influenced by prominent point-of-purchase sales

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30
Q

Habitual Problem Solving and how to engage customers

A
  • Decision involves little to no effort, for purchases that aren’t important or for brand loyal consumers
  • Offer good service and rewards to loyal customers
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31
Q

Social factors that influence the buying decision process

A

Family
Reference Group
Culture

32
Q

Reference Group

A

One or more people whom a person uses as a basis of comparison for beliefs, feelings and behaviors

33
Q

Culture

A

Culture is the meaning, beliefs, morals and values shared by most members of a society

34
Q

4 Criteria for Evaluating Market Segments

A

Actionable: how to satisfy customer needs in the segment
Identifiable: know which customers are in the segment
Substantial: Segment must be large enough or have significant buying power to generate profits
Reachable: Retailer can target promotions and other elements of the retail mix to the segment

35
Q

Approaches for Segmenting Markets

A

Geographic, Geo-demographic, Demographic, Buying situations, Benefits, Lifestyle

36
Q

Lifestyle/Psychographics

A

How people live, how they spend their time and money, what activities they pursue, and their attitudes and opinions about the world in which they live

37
Q

Trade-offs for selecting a particular store location

A

Size of trade area, occupancy cost, pedestrian and vehicle traffic, restrictions, convenience

38
Q

Freestanding Sites

A

Location for individual store unconnected to other retailer

39
Q

City/Town Locations

A

Gentrification of the city/town, low occupancy costs, high pedestrian traffic

40
Q

Central Business District

A

Traditional downtown business area in a city/town; lots of residents and pedestrian traffic, draws a good crowd during business hours

41
Q

Main Streets

A

The traditional shopping area in a smaller town or to a secondary business district in a suburb; much like a CBC but lower occupancy costs

42
Q

Inner City

A

High density urban area that has a higher unemployment and lower median income than the metro area

43
Q

Shopping Center

A

Group of retail and other commercial establishments that are planned, developed, and owned and managed as a single property (combining many stores in one location)

44
Q

Anchors

A

One or two major retailers that attract a significant amount of consumers to a shopping center

45
Q

Neighborhood and Community Shopping Center

A

Attached rows of nonenclosed stores, with on-site parking; offers convenient location and parking, and have low occupancy costs

46
Q

Power Centers

A

Shopping centers that consist primarily of collections of big-box retail stores (full-line discount stores, off-price, warehouse clubs, and category specialists)

47
Q

Shopping malls

A

Enclosed, climate-controlled, lighted shopping centers with retail stores (classified by size)

48
Q

Lifestyle Centers

A

Shopping centers that have an open-air configuration of specialty stores, entertainment, and restaurants

49
Q

Mixed-Use Developments

A

Combines several different uses into one complex including retail, office, residential, hotel, recreation, or other functions (pedestrian oriented)

50
Q

Outlet Centers

A

Shopping centers that contain mostly manufacturers’ and retailers’ outlet stores

51
Q

Theme/Festival Centers

A

Shopping centers that typically employ a unifying theme carried by the individual shops in their design and merchandise

52
Q

Omnicenters

A

New shopping center developments that combine enclosed malls, lifestyle centers, and power centers

53
Q

Other Location Opportunities

A

Airports, Resorts, Store within a Store, Temporary or Pop-Up Stores

54
Q

Matching Location to Retail Strategy

A

Must be consistent with: the shopping behavior, size of target market, and the retailer’s position in its target market

55
Q

3 Types of Consumer Shopping Situations

A

Convenience shopping: minimizing effort
Comparison shopping: know generally what they want, but doesn’t have a brand/model preference
Specialty shopping: Consumers know what they want

56
Q

Legal Consideration for Location

A 
"Above-ground" risks (construction-oriented)
Hazardous materials
Zoning and Building Codes
Signs
Licensing Requirements (liquor licenses)
57
Q

4 Factors for Evaluating Specific Areas for Locations

A
  1. Strategic Fit with Target Market
  2. Economic Conditions (growth of population & employment)
  3. Competition
  4. Cost of Operating Stores
58
Q

Economies of Scale

A

Increasing number of stores in an area to help with promotion and distribution

59
Q

Evaluating a Site for a Retail Store

A

Consider: Characteristics of site, characteristics of the trading area, estimated potential sales that can be generated

60
Q

Cumulative Attraction

A

A cluster of similar and complementary retailing activities will generally have greater drawing power than isolated stores that engage in the same retailing activities

61
Q

Trade Area

A 
A contiguous geographic area that accounts for the majority of a store's sales and customers
Primary zone (shopping derives 50 to 70 percent of its customers)
Secondary Zone (Customer sales generates 20 to 30 % of site's sales)
Tertiary Zone (customers who occasionally shop at the store/center)
62
Q

Factors Affecting Size of Trade Area

A

Accessibility, natural and physical barriers, type of shopping area, type of store, nature of merchandise, assortment, location of alternative sources, competition, parasite stores

63
Q

Parasite Store

A

One that does not create its own traffic and whose trade area is determined by the dominant retailer

64
Q

Customer Spotting

A

Process of locating the residences of customers for a store on a map and displaying their positions relative to the store location

65
Q

Geographic Information System

A

A system of hardware and software used to store, retrieve, map and analyze geographic data along with the operating personnel and the data that goes into the system

66
Q

Tapestry Segment

A

Classifies US residential neighborhoods by lifestyles and consumer behavior patterns; etc. Metro Renters (young, well-educated, professional, live in large cities, 50K, spend money on themselves)

67
Q

Spending Potential Index

A

Compares the local average expenditure by product to the national average amount speent

68
Q

Estimating Potential Sales for a Store Site

A
  1. Huff’s gravity model
  2. Analog Approach
  3. Regression Analysis
69
Q

Huff’s Gravity Model

A

probability which a given customer will shop in a particular store or shopping center becomes larger as the size of store or center grows and distance or travel time from customer shrinks

70
Q

Multiple Regression Analysis

A

Factors affecting the sales of existing stores in a chain will have the same impact upon the stores located at new sites being considered

71
Q

Analog Approach

A

Retailer describes the site and trade area characteristics for its most successful stores and attempts to find a similar site

72
Q

Types of Leases

A
  1. Percentage: lease based on a % of sales
  2. Fixed-Rate: Retailers also typically pay a maintenance fee-based on a percentage of their square footage of leased space
73
Q

Variations of Percentage Leases

A

Percentage lease with specified maximum - percentage of sales up to a maximum amount.
Rewards retailer performance by allowing retailer to hold rent constant above a certain level of sales
Percentage lease with specified minimum - retailer must pay a minimum rent no matter how low sales are.
Sliding scale - percentage of sales as rent decreases as sales go up.

74
Q

Fixed Rate Leases

A

Fixed Rate Leases - used by community and neighborhood centers.
Retailer pays a fixed amount per month over the life of the lease.
Not as popular as percentage leases
Graduated Lease - a variation of the fixed rate lease
Rent increases by a fixed amount over a specified period of time.

75
Q

Cotenancy Clause

A

In some retail leases; some require that a certain percentage of a shopping center be leased, while others name specific retailers or types of retailers that are to remain open

76
Q

Prohibited Use Clause

A

Limits the landlord from leasing to certain tenants

77
Q

Exclusive Use Clause

A

Prohibits the landlord from leasing to retailers selling competing merchandise

Retailing (3 decks)

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