Retail Management Exam 1

Social Risks

arise when customers believe a product will affect how others view them

Financial Risks

arise when customers purchase an expensive product or service

LEED certification

assessment of stores impact on human and environmental factors

multiattribute attitude model

based on the notion that customers see a retailer,product,or channel as a collection of attributes

Horizontal Dimensions

ideals, achievement, sel expression

Multilevel System

independent business people serve as master distributors, recruiting other people to become distributors in their network

External Sources of Information

information provided by a host of sources

Hypermarket

large combination food and general merch stores

Supercenters

large stores that combine a supermarket with a full-line discount store (Target, Kroger)

VALS

lifestyle segmentations

Unrelated Diversification

little commonality between retailer's present business and the new growth opportunity

Infomercials

long form typically 30-60 mins long mixing product info and entertainment

Fair Trade

made by workers who are paid a fair wage, non just a minimum wage

Unorganized Retailing

small independent retailers

Category Kills

when category specialists offer a complete assortment of merchandise

Hedonic Needs

when consumes go shopping for pleasure

Physical Risks

when customers believe that a product or service may affect their health or safety

Utilitarian Needs

when customers desired level of satisfaction differs from their present level of satisfaction

Pyramid Scheme

when the firm and its program are designed to sell merchandise and services to other distributors, rather to end-users

Microenvironment

Competition, Customers,

Vertical Dimensions

Income, Education, Health, Energy Level

External Environment

Opportunities and Threats

Category Specialists

big box stores that offer a narrow but deep assortment of merchandise

Mission Statement

broad description of a retailer's objectives and the scope of activities it plans to undertake

Retailer

business that sells products and/or services to consumers for their personal or family use

Stock keeping unit

each different item of merchandise is a SKU

Closeouts

end of season merch that will not be used in following seasons

Mobile Channel

involves accessing the internet using smartphone

Internet Retailing Channel

involves retailers interacting with consumers via the internet, whether they use a traditional computer, a laptop, tablet, or a smartphone

Irregulars

merchandise with minor mistakes in construction

Off-Price Retailers

offer an inconsistent assortment of brand-name merchandise at a significant discount off the manufacturers retail price

Consideration Set

set of alternatives the customer evaluates when making the choice of a retailer

Retailing

set of business activities that adds value to products and services sold to consumers for their personal or family use

Retail Mix

set of decisions retailers make to satisfy customer needs and influence their purchase decisions (Types of merch/services, merch pricing, store design, merchandise display)

Extreme Value Retailers

small discount stores that offer a broad variety but shallow assortment of household goods, health and beauty care products and groceries (Dollar Stores)

geodemographic segmentation

uses both geographic and demographic characteristics to classify consumers

Market Expansion

using the retailers existing retail format in new market segments

Showrooming

when a customer goes into a store to learn about different brands and products then searches the internet for the same product at a different price

Forward Integration

when a manufacturer undertakes retailing/wholesaling activities - apple, outlet malls

Automated Retailing

A retail channel in which merchandise or services are stored in a machine and dispensed to customers when they deposit cash or use a credit card

Intertype Retailers

Competition among retailers that sell similar merch but using diff types of outlets

Internal Sources of Information

Information within a customers memory such as names, images, and past experiences with similar stores

Flash Sales

Limited time deals on website, first-come first served

Party Plan System

Salespeople encourage customers to act as hosts and invite friends/coworkers to a party

Supply Chain

Set of firms that make and deliver goods and services to consumers

Internal Environment

Strengths and Weaknesses

Macroenvironment

Technology, Social, Ethics/Legal/Political

Third Tier

Tier of dept stores - caters to more price-conscious consumers

First Tier

Tier of dept stores - upscale, high fashion with exclusive designer merch

Second Tier

Tier of dept stores -more modestly priced merchandise with less customer service

Downstream

Toward Customer

Upstream

Toward Material

Unsatisfied Need

When a customers desired level of satisfaction differs from their present level

Backward Integration

When a manufacturer performs some wholesaling and manufacturing activities

Scrambled Merchandising

When retailers offer merchandise not typically associated with their type of store

Franchising

a contractual agreement in which the franchisor sells the rights to use its business trademark, service mark, or trade name to the franchisee

Conventional Supermarket

a large, self service retail food store offering groceries, meat, and produce, as well as some non food items (Whole Foods)

Catalog Channel

a non store retail channel in which the retail offering is communicated to customers through a catalog mailed to consumers

Direct Response TV

a retail channel in which customers watch a TV advertisement that demonstrates merch and then place an order for that merch

Television Home Shopping Channel

a retail channel in which customers watch a TV network with programs that demonstrate merch and then place orders for that merch by telephone or the internet

Sustainable Competitive Advantage

advantage the retailer has over its competition that is not easily copied by competitors and thus can be maintained

Wholesalers-Sponsored Voluntary Cooperative Group

an organization operated by a wholesaler offering a merchandising program to small, independent retailers on a voluntary basis

SWOT Analysis

analysis of the retailer's internal environment (strengths and weaknesses) and external environment (opportunities and threats)

Wholesalers

buy and store merchandise in large quantities from manufacturers and then resell the merch to retailers

Cross Shopping

buying both premium and low priced merchandise or patronizing both expensive, status oriented retailers and price oriented retailers

Strategic Alliance

collaborative relationship between independent firms

North American Industry Classification System

collects data on business activity in the US, Canada, and Mexico

Impulse Buying

common type of limited problem solving, buying decision made on the spot

Corporate Retail Chains

companies that operate multiple retail units under common ownership and usually has centralized decision making for defining and implementing its strategy

Intratype Competition

competition between the same type of retailers

Specialty Stores

concentrate on a limited number of complementary merch categories and provide a high level of service

Barriers to Entry

conditions that make it hard to enter a market

Everyday Low Pricing Strategy

continuity of retail prices at a level somewhere between the regular non sale price and the deep-discount sale price of its competitors

Scale Economies

cost advantages due to a retailer's size

Customer Loyalty

customers are committed to buying merch and services from a particular retailer

Channel Migration

customers gather info from one of its channels then buy from a channel hosted by a competitor

Brand Loyalty

customers like and consistently buy a specific brand in a product category

Retailer Loyalty

customers like and habitually visit the same retailer to purchase a type of merchandise

Store Advocates

customers who like a store so much that they actively share their positive experience

Positioning

design and implementation of a retail mix to create an image of the retailer in the customers mind relative to its competitors

Limited Assortment Supermarkets

designed to maximize efficiency and reduce costs (Aldi)

Laws

dictate which activities society has deemed to be clearly wrong, those activities for which retailers and their employees will be punished through the federal or state legal systems

Joint Venture

entering retailer pools its resources with a local retailers to form a new company in which ownership, control, and profits are shared ○ Reduces the entrant's risks ○ In addition to sharing financial burden, the local partner provides an understanding of the market and has access to local resources like vendors and real estate ○ Problems if partners disagree or the government places restrictions on the repatriation of profits

Vertical Integration

firm performs more than one set of activities in the channel

Service Retailers

firms that primarily sell services rather than merchandise

loyalty/frequent shopper programs

focus on identifying and building loyalty with a retailer's most valued customers, offer rewards

Competitive Rivalry

frequency and intensity of reactions to actions undertaken by competitors

Perceptual Map

frequently used to represent the customers image and preferences for retailers

Benefit Segmentation

group customers seeking similar benefits

Retail Community

group of consumers who have a shared involvement with a retailer

Retail Market

group of consumers with similar needs and a group of retailers that satisfy those needs using similar retail channels and format

Retail Market Segment

group of customers who are attracted to the same retail mix because they have similar needs

Graphic Segmentation

groups customers based on where they live

Demographic Segmentation

groups customers on basis of easily measured, objective characteristics

Market Penetration

growth opportunity directed towards existing customers using the retailer's present retailing format

Lifestyle/Psychographics

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

Multichannel Retailing

involves using more than one channel to sell and deliver merchandise and service to consumers

Target Market

market segment toward which the retailer plans to focus its resources and retail mix

Culture

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

Retail Format

nature of the retailer's operations - its retail mix (type of merchandise and services offered, pricing policy, advertising and promotion programs, store design and visual merchandising, typical locations, and customer services) - that will use to satisfy the needs of its target market

Outlet Stores

off price retailers owned by manufacturers or retailers (TJ Maxx, HomeGoods)

Reference Group

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

Corporate Social Responsibility

organization voluntarily engaging in business practices that meet or exceed the ethical and legal expectations of stakeholders

Independent, Single Store Establishments

owner-managed with direct contact with customers and can respond quickly to their needs

Conversion Rate

percentage of customers who enter a store/access a website then buy a product from the same store/website

Satisfaction

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

Ethics

principles governing individuals and companies that establish appropriate behavior and indicate what is right and wrong

Private-label brands/store brands/own brands

products developed and marketed by a retailer and available only from the retailers

Convenience Store

provide a limited variety and assortment of merchandise at a convenient location with a speedy checkout (7/11, Sheetz)

Extended Problem Solving

purchase decision process in which customers devote considerable time and effort to to analyze their alternatives

Limited Problem Solving

purchase decision process involving a moderate amount time and effort

Habitual Decision Making

purchase decision process involving little or no conscious effort

Omniretailing

refers to coordinated multichannel retail offering that provides a seamless customer experience when using all of the retailers shopping channels

Direct Selling Channel

retail channel in which salespeople interact with customers face to face in a convenient location at customers home or work

Direct Investment

retail firm invests in and owns a retail operation in a foreign country ○ Requires highest level of investment ○ Exposes retailers to the greatest risk ○ Has highest potential returns ○ Key advantage: retailer has complete control of the operations

Retail Format Development

retailer develops a new retail format for the same target market

Diversification

retailer introduces a new retail format directed toward a market segment that's not currently served by the retailer

Related Diversification

retailer's present target market and retail format shares something in common with the new opportunity

Franchising

retailers have limited control over the retail operations, potential profit is reduced, risk of assisting in the creation of a local domestic competitor increases ○ Lowest risk ○ Least investment ○ Lowest potential return on investment

Department Stores

retailers that carry a broad variety and deep assortment, customer service, departments (JC Penny, Macys)

Full-Line Discount Stores

retailers that offer a broad variety of merchandise, limited service, and low prices

Warehouse

retailers that offer a limited and irregular assortment of food and general merch with little service and low prices (Sams Club, BJs)

Cross Selling

sales associates in one department attempt to sell complementary merchandise from other departments to their customers

Apps

software applications designed to improve the consumer' shopping experience when using smartphones and tablets

Drugstores

specialty stores that concentrate on health and beauty care products

Retail Strategy

statement identifying: target market, format and resources retailer plans to use to satisfy target markets needs, bases on which the retailer plans to build a sustainable competitive advantage

Buying Process

steps consumers go through when buying a product or service - begins when they recognize an unsatisfied need

Electric Channel

the channel that involves accessing the internet using a smartphone

Variety - breadth

the number of categories a retailer offers

Assortment - depth

the number of different items offered in a merchandise category

Retail Channel

the way a retailer sells and delivers merchandise and services to its customers