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