Retail Management #2

resident buying office

Inside or outside buying org used when a retailer wants to keep in close touch with market trends and cannot do so with just its headquarters buying staff. Such offices are usually situated in important merch centers (sources of supply) and provide valuable data and contacts

vendor-managed inventory (VMI)

Practice of retailers counting on key suppliers to actively participate in their inventory mangement programs. Suppliers have their own employees stationed at retailers' headquarters to manage the inventory replenishment of the supplier's products.(P&G has employees stationed at Wal-Mart headquarters to manage the inventory replenishment of products)

experiential merchandising

Tactic whose intent is to convert shopping from a passive activity into a more interactive one, by better engaging the customer(ex. American Girl, Urban Outfitters)

RFID (radio frequency identification)

a method of storing and remotely retrieving data using devices called RFID tags or transponders

data-base management

a retailer gathers, integrates, applies, and stores information related to specific subject areas. (major element in RIS) (could be by customer, vendor, or product category)

order-getting salesperson

actively involved with informing and persuading customers and in closing sales. true "sales" employee

merchandising

activities involved in acquiring particular goods and/or services and making them available at the places, times, and prices and in the quantity that enable a retailer to reach its goals.

pre-training

an indoctrination on the firm's history and policies, as well as a job orientation on hours, compensation, the chain of command, and job duties.

retail information system (RIS)

anticipates the info needs of retailer managers; collects, organizes, and stores relevant data on a continuous basis; and directs the flow of information to the proper decision makers

retail promotion

any communication by a retailer that informs, persuades, and/or reminds the target market about any aspect of that firm

public relations

any communication that fosters a favorable image for the retailer among its publics

publicity

any nonpersonal form of public relations whereby messages are transmitted through mass media, the time or space provided by the media is not paid for, and there is no identified commercial sponsor

assortment merchandise

apparel, furniture, autos, and other products for which the retailer must carry a variety of products in order to give customers a proper selection

purchase motivation product groupings

appeal to consumer's urge to buy products and the amount of time he or she is willing to spend on shopping. (first floor is impulse purchases and other quick shopping, third floor is for more thoughtful shoppers)

sales-productivity ratio

assigns floor space on the basis of sales or profit per foot. (highly profitable categories get large chunks of space)

external secondary data

available from sources outside the firm

internal secondary data

available within the company

frequency

average number of times each person reached is exposed to a retailer's promotion efforts in a specific period

dead area

awkward spaces where normal displays cannot be set up (beams, doors, rest rooms, dressing rooms). Retailers can use them more effectively (ads in dressing rooms, escalators where you have to get off at every floor and pass by displays to get to next level).

need-satisfaction approach

based on the principle that each customer has different wants; thus, a sales presentation should be geared to the demands of the individual customer.

equal store organization

buying is centralized and branches become sales units with equal operational status

dump bin

case that holds piles of sale clothing, marked-down books, or other products

universal product code (UPC)

classification for coding data onto products via a series of thick and thin vertical lines. It lets retailers record info instantaneously on a product's model number, size, color, and other factors when it is sold, as well as send the info to a computer that monitor unit sales, inventory levels, and other factors. The UPC is not readable by humans.

battle of the brands

competition btw manufactures and retailers for shelf space and profits, whereby manufacturer, private, and generic brands fight each other for more space and control (ex. Staples - Avery, Duracell, HP, 3M, but also 2,000 Staples' products)

ensemble display

complete product bundle (ensemble) is presented - rather than showing merch in separate categories

fashion merchandise

consists of products that may have cyclical sales due to changing tastes and lifestyles (forecasting is hard b/c styles may change year to year)

staple merch

consists of the regular products carried by a retailer (supermarkets: milk, bread, canned soup, tissues)

hierarchy of effects

consumers go through a sequence of steps which takes them from awareness to knowledge to liking to preference to conviction to purchase. Different promotional mixes are needed in each step. Ad & pr in awareness, personal selling and sales promotion in changing attitudes and stimulating desires.

private (dealer) brands/store brands

contain names designated by wholesalers or retailers. Are more profitable to retailers, better controlled by retailers, not sold by competing retailers, less expensive for consumers, lead to customer loyalty to retailers instead of manufacturers.

traditional job description

contains a position's title, relationships, and specific roles and tasks

data warehousing

copies of all the data bases in a firm are maintained in one location and are accessible to employees at any locale

theme-setting display

depicts a product offering in a thematic manner and sets a specific mood. (seasonal or specific events or occasions)

model stock approach

determines the floor space necessary to carry and display a proper merchandise assortment

compensation

direct monetary payments (salaries and commissions) and indirect payments (paid vacations, retirement plans).`

functional product groupings

display merchandise by common end use. A men's clothing store might group shirts, ties, cuff links, and tie pins; shoes, shoe polish; underclothing

Mazur plan

divides all retail activities into four functional areas. Merchandising, communications, store management, and financial accounting.

marketing research process

embodies a series of activities: defining the problem, examining secondary data, generating primary data if needed, analyzing data, making recommendations, and implementing findings

collaborative planning, forecasting, and replenishment (CPFR)

emerging technique for larger firms whereby there is a holistic approach to supply chain management among a network of trading partners

quick response (QR) inventory planning

enables a retailer to reduce the amount of inventory it keeps on hand by ordering more frequently and in lower quantity

reverse logistics

encompasses all merch flows from the customer and/or the retailer back through the supply channel

inventory shrinkage

encompasses employee theft, customer shoplifting, vendor fraud, and administrative errors.

sales promotion

encompasses the paid communication activities other than advertising, public relations, and personal selling that stimulate consumer purchases and dealer effectiveness (displays, contests, sweepstakes, coupons, frequent shopper programs, prizes, samples, referral gifts...)

marketing research in retailing

entails the collection and analysis of info relating to specific issues or problems facing a retailer

goal-oriented job description

enumerates basic functions, the relationship of each job to overall goals, the interdependence of positions, and information flows

opportunistic buying

especially low prices are negotiated for merchandise whose sales have not lived up to expectations, end-of-season goods, items consumers have returned to the manufacturer, closeouts. (TJX)

probability (random) sample

every store, product, or customer has an equal or known chance of being chosen for study

assortment display

exhibits a wide range of merchandise. (open: the customer is encouraged to feel, look at, try on products, closed: customer is encouraged to look but not touch)

case display

exhibits heavier, bulkier items than racks hold

direct store delivery

exists when retailers have at least some goods shipped directly from suppliers to individual stores. Works best w/ retailers that also utilize EDI

weighted application blank

factors having a high relationship with job success are given more weight than others

generic brands

feature products' generic names as brands (such as canned peas); they are no-frills goods stocked by some retailers (form of private brand)

retail organization

firm structures and assigns tasks, policies, resources, authority, responsibilities, and rewards to efficiently and effectively satisfy the needs of its target market, employees, and management

efficient consumer response (ECR)

form of order processing and fulfillment by which supermarkets are incorporating aspects of quick response inventory planning, electronic data interchange, and logistsics planning

organization chart

graphically displays its hierarchical relationships

cooperative buying

group of retailers gets together to make quantity purchases from suppliers and obtain volume discounts (consumer electronics stores)

fad merchandise

high sales are generated for a short time (toys, can turn into extended fads - Trivial Pursuit)

supervisions

in the manner of providing a job environment that encourages employee accomplishment

data mining

in-depth analysis of information to gain specific insights about customers, product categories

cut case

inexpensive display that leaves merchandise in the original carton

survey

info is systematically gathered from respondents by communicating with them

job analysis

information is amassed on each job's functions and requirements: duties, responsibilities, aptitude, interest, education, experience, and physical tasks

point-of-purchase (POP) display

interior display that provides shoppers with information, adds to store atmosphere, and serves a substantial promotional role

Issue (problem) definition

involves a clear statement of the topic to be studied (what info does the retailer want to obtain to make a decision)

personal selling

involves oral communication with one or more prospective customers for the purpose of making a sale

Human Resource Management

involves recruiting, selecting, training, compensating, and supervising personnel in a manner consistent with the retailer's org structure and strategy mix

electronic article surveillance

involves special tags that are attached to products so that the tags can be sensed by electronic security devices at store exists.

consignment purchases

items not paid for by a retailer until they are sold. Retailer can return unsold merch. Title is not taken by the retailer, supplier owns the goods until sold

floor-ready merchandise

items that are received at the store in condition to be put directly on display without any prep by retail workers.

semantic differential

listing of bipolar adjective scales. asked to rate retailers on several criteria (unfriendly - friendly)

supply chain

logistics aspect of value delivery chain. It comprises all of the parties that participate in the retail logistics process: manufacturers, wholesalers, third-party specialists, and the retailer.

vertical cooperative advertising agreement

manufacturer and retailer or a wholesaler and retailer share an ad.

storability product groupings

may be used for products needing special handling (supermarket has: freezer, frig, room-temp sections; florist has frig and not frig flowers)

canned sales presentation

memorized, repetitive speech given to all customers interested in a particular item. Works best if shoppers require little assistance and sales force turnover is high

category management

merchandising technique that some firms (supermarkets, drugstores, gen merch stores) use to improve productivity. Focuses on product category results rather than the performance of individual brands or models.

diversified retailer

multi-line firm operating under central ownership (operates multiple stores and is involved with different types of retail operations) Ex. Kroger

reach

number of distinct people exposed to a retailer's promotion efforts in a specific period

memorandum purchase

occurs when items are not paid for by the retailer until they are sold. Retailer can return unsold merch. however it take title on delivery and is responsible for damages

cooperative advertising

occurs when manufacturers or wholesalers and their retailers, or two or more retailers, share the costs of retail advertising

hierarchy of authority

outlines the job interactions within a company by describing the reporting relationships among employees (flat org - lots of employees report to 1 manager, tall - several management levels, few employees per manager)

advertising

paid, nonpersonal communication transmitted through out-of-store mass media by an identified sponsor

slotting allowances

payments that retailers require of vendors for providing shelf space

order-taking salesperson

performs routine clerical and sales functions - setting up displays, stocking shelves, answering simple questions, and ringing up sales

buyer

person responsible for selecting the merch to be carried by a retailer and setting a strategy to market that merch

sales manager

person who typically supervises the on-floor selling and operational activities for a specific retail department

market segment product groupings

place together various items that appeal to a given target market. (womens store: juniors, misses, ladies; music store breaks into genres)

curving (free-flowing) traffic flow

places displays and aisles in a free-flowing pattern (department stores, apparel stores, shopping oriented) -friendly atmosphere, browsing, walk any way

straight (gridiron) traffic flow

places displays and aisles in a rectangular or gridiron pattern (often used by food retailers, discount stores, drugstores, hardware stores, stationery stores) - people can shop quickly, efficiency

rack display

primarily functional use: to neatly hang or present products

visual merchandising

proactive, integrated approach to atmospherics taken by a retailer to create a certain "look" properly display products, stimulate shopping, and enhance the physical environment

inventory management

process whereby a firm seeks to acquire and maintain a proper merch assortment while ordering, shipping, handling, storing, displaying, and selling costs are kept in check

manufacturer (national) brands

produced and controlled by manufacturers. Usually well known, supported by manufacturer ads, require limited retailer investment in marketing, represent max product quality to consumers. (Apple, Coke, Gillette, Levi's, Microsoft, Nike)

seasonal merchandise

products that sell well over nonconsecutive time periods (ski-equipment and air-conditioner servicing have excellent sales during on season per year)

forecasts

projections of expected retail sales for given periods

PMs (promotional or push monies)

promotional money, push money, or prize money that a manufacturer provides for retail salespeople selling that manufacturer's brand

width of assortment

refers to the number of distinct goods/service categories (product lines)

depth of assortment

refers to the variety in any one goods/services category (product line) a retailer carries

incremental method

relies on prior promotion budgets to allocate funds. A percentage is either added to or subtracted from one year's budget to determine the next year's. (rarely tied to specific goals - gut feeling)

micromerchandising

retailer adjusts shelf-space allocations to respond to customer and other differences among local markets (Wal-Mart allots space to product lines and various stores to reflect differences in demographics, weather, and shopping)

cross-merchandising

retailer carries complementary goods and services to encourage shoppers to buy more (ex. apparel accessories)

objective-and-task method

retailer clearly defines its promotion goals and prepares a budget to satisfy them (goal might be to have 70% of people in its trading area know a retailer's name by the end of a one-month promotion campaign). Best budgeting technique

all-you-can-afford method

retailer first allots funds for each element of the retail strategy mix except promotion. The remaining funds go to promotion. (weakest technique)

primary data

retailer looks at data that are collected to address the specific issue or problem under study

secondary data

retailer looks at data that have been gathered for purposes other than addressing the issue or problem currently under study

percentage-of-sales method

retailer ties its promotion budget to revenue. ratio remains constant (still no relation to goals, promotion drops in low sales periods when it could be helpful to have more)

competitive parity method

retailer's promotion budget is raised or lowered based on competitors' actions. If leading competitor raises its budget, other retailers in the area may follow.

electronic data interchange (EDI)

retailers and suppliers regularly exchange information through their computers with regard to inventory levels, delivery times, unit sales, and so on of particular items

mystery shoppers

retailers hire people to pose as customers and observe their operations, from sales presentations to how well displays are maintained to service calls

assortment

selection of merchandise a retailer carries (includes both breadth of product categories and the variety within each category)

merchandising philosophy

sets the guiding principles for all the merchandise decisions that a retailer makes. Reflects target market desires, institution type, marketplace positioning, defined value chain, supplier capabilities, costs, competitors, product trends, etc.

product life cycle

shows the expected behavior of a good or service over its life (introduction, growth, maturity, decline)

marquee

sign that displays the store's name. (should attract attention - like Best Buy's marquee. McD's golden arches is best-known marquee)

basic stock list

specifies the inventory level, color, brand, style category, size, package, and so on for every staple item carried by the retailer

nonprobability sample

stores, products, or customers are chosen by the researcher - based on judgment or convenience

want book (want slip)

system that is a formal way to record consumer requests for unstocked or out-of-stock merchandise

solutions selling

takes a customer-centered approach and presents "solutions" rather than "products" (like grouping by price rather than product category, supermarkets sell ready-made meals)

training programs

teach new (and existing) personnel how best to perform their jobs or how to improve themselves

recruitment

the activity whereby a retailer generates a list of job applicants

job motivation

the drive within people to attain work-related goals. Positive or Negative.

observation

the form of research in which present behavior or the results of past behavior are noted and recorded

micromarketing

the retailer uses differentiated marketing and develops focused retail strategy mixes for specific customer segments, sometimes fine-tuned for the individual shopper.

atmosphere (atmospherics)

the store's physical characteristics that project an image and draw customers (for nonstore-based firms its physical characteristics of catalogs, web sites, etc.)

storefront

total physical exterior of the store itself (marquee, entrances, windows, lighting, and construction materials)

logistics

total process of planning, implementing, and coordinating the physical movement of merchandise from manufacturer to retailer to customer in the most timely, effective, and cost-efficient manner possible

horizontal cooperative advertising agreement

two or more retailers share an ad (often used by small noncompeting retailers, retailers in a shopping center, and franchisees of a given firm)

simulation

type of experiment whereby a computer program is used to manipulate the elements of a retail strategy mix rather than test them in a real setting

experiment

type of research in which one or more elements of a retail strategy mix are manipulated under controlled conditions

distributed promotion effort

used by retailers, such as fast-food restaurants, that promote throughout the year

massed promotion effort

used by retailers, such as toy retailers, that promote seasonally

model stock plan

used to project specific items, such as the number of green, red, and blue pullover sweaters of a certain design by size

never-out list

used when a retailer plans stock levels for best-sellers. Goal is to purchase enough of these products so they are always in stock

application blank

usually the first tool used to screen applicants; it provides data on education, experience, health, reasons for leaving prior jobs, outside activities, hobbies, and references.

planogram

visual (graphical) representation of the space for selling, merchandise, personnel, and customers - as well as for product categories. Also lays out their in-store placement

charge-backs

whereby retailers, at their sole discretion, make deductions in their bills for infractions ranging from late shipments to damaged and expired goods