Week 1-Retailing Flashcards
(24 cards)
What is retailing?
Is the set of business activities that adds value to products and services sold to consumers for their personal or family use. Is a business that sells products and/or services to consumers for their personal or family use.
The retailer’s role in a supply chain
Supply Chain is a set of firms that make and deliver goods and services to consumers.
Retailers create value
undertaken by channel members to provide benefits to customers, they also increase the cost of products and services.
Providing an assortment of products and services: offering an assortment enables customers to choose from a wider selection of products, brands, sizes, and prices at one location.
Breaking bulk: is important to both manufacturers and consumers. It allows manufacturers to produce and ship merchandise efficiently and in large quantities at one time, but enables consumers purchase merchandise they want in smaller quantities.
Holding inventory: products will be available when they need more.
Providing services: retailers provide services that make it easier for customers to buy and use products.
Costs of Channel Activities
retailers increase the benefits that consumers receive from their products and services.
Example of a supply chain
Manufacturer, wholesaler, retailers, and consumer.
Role in Development Economies
when consumers spend more money buying goods and services from retailers, a country’s economy flourishes. However, if consumers feel uncertain about their financial future and decide to refrain, then the economy slows down.
Role in Developing Economies-The Bottom of the Pyramid
serving the needs of people living at the lowest end of the income distribution. Serving these people also provides an important social benefit: reducing worldwide poverty.
Role in Society
some retailers are realizing that their responsibility includes considering the needs and objectives of all of its STAKEHOLDER.
Stakeholders
which are the broad set of people who might be affected by a firm’s actions, from current and prospective customers, etc.
Corporate Social Responsibility (CSR)
involves an organization voluntarily engaging in business practices that meet or exceed the ethical and legal expectations of its stakeholders.
Conscious marketing
sense of purpose for the firm higher than simply making a profits by selling products and services
Encompasses four overriding principles:
1. Recognition of the retailing firms greater purpose
2. Consideration of stakeholders and their interdependence
3. The presence of conscious leadership, creating a corporate culture
4. The understanding that decisions are ethically based: ethics is concerned with distinguishing between right and wrong actions and decisions.
Evolution of the Retail Industry
the retail industry is dominated by large, national, and even international retail firms. The development of information systems is one of the forces facilitating the growth of large retail firms. Before the availability of morderán information systems, it was difficult for retailers to lower costs through scale economies, and larger retailers had limited advantages over small local or regional retailers.
Role of information system
Retailers convert these raw data into information that managers can use to make better decisions. Many retailers use customer data to identify their best customers and target customized promotions to them.
Management Opportunities
retailers are hiring and promoting the best and brightest. Our managers need to be comfortable with new technologies, information and supply chain management systems, and international business as well as managing a diverse workforce and buying merchandise.
Entrepreneurial Opportunities
retailing also provides opportunities for people who wish to start their own business.
Understanding the World of Retailing-Section 1
retail managers need to know the environment in which they operate before they can develop and implement effective strategies.
- The macro environment
impacts include technological, social, and ethical/legal/political factors
- The micro environment
focus specifically on its competitors and customers
Competitors: competition between the same type of retailers is called INTRATYPE COMPETITION. When retailers offer merchandise not typically associated with their type of stores, the result is SCRAMBLED MERCHANDISING. And this increases INTERTYPE COMPETITION, or competition among retailers that sell similar merchandise using different types of retail outlets.
Customers
retailers must understand why customers shop, how they select a store, and how they select among that store’s merchandise.
Retail Strategy identifies
- The target market, or markets, towards which the retailers will direct its efforts.
- The nature of the merchandise and services the retailers will offer to sastify the need of the target market
- How the retailer will develop unique assets that enable it to achieve long term advantage over its competitors.
Strategic Decision Areas
the key strategic decisions a retailer makes are defining its target market and its financial objectives. Strategic assets are location, Human Resources, information and supply chain systems, supply chain organization, and customer loyalty.
The retail mix
is a set of decisions retailers make to satisfy customer needs and influence their purchase decisions. Including the types of merchandise and services offered, merchandise pricing, advertising and promotional programs, store design, merchandise display, assistance to customers provided by salespeople, and convenience of the store’s location
Section 3
focuses on implementation decisions made by buyers and section 4 focuses on decisions made by store managers
Section 4
Managers in the merchandise management area decide how much and what types of merchandise to buy, what vendors to use and how to interact with them, the retail prices to set, and how to advertise and promote merchandise. Must decide how to recruit, select and motivate sales associates, where and how merchandise will be displayed, and the nature of services to provide for customers.
