Retail Managment Study Guide Chapters 1-5
Retail Managment Study Guide Chapters 1-5 MKTG 436
Popular in Retail Management
Popular in Marketing
This 9 page Study Guide was uploaded by Talia Standring on Tuesday March 22, 2016. The Study Guide belongs to MKTG 436 at San Francisco State University taught by Robert Strong in Spring 2016. Since its upload, it has received 13 views. For similar materials see Retail Management in Marketing at San Francisco State University.
Reviews for Retail Managment Study Guide Chapters 1-5
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 03/22/16
MKTG 436 – Spring ‘16 Study Guide for Exam 1 Chapter 1 Intro into Retailing According to Mr. Mallmann of Goldman Sachs, which of the following is NOT a major global trend in retail markets? Trends: Growth of Middle Class (china), Technology & Social Media, Premium & Highly Differentiated Products, Value Added Branded Products, Growth of Single Category Retail Firms, More Strategic Buyers in Asia, Private Equity Activity Growing For 2014 & 2015 what percentage is closest to the actual yearonyear growth of ecommerce? 11% & 10% How are retailers classified or categorized? location, store size, # outlets, chains (ex 2 or more) vs independents (ex true value) Market share refers to? the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself. Retailing defined?: Retailing encompasses the business activities involved in selling goods and services to consumers for their personal, family, or household use. It includes every sale to the final consumer. Retailing is the last stage in the channel of distribution.(The English word “retail” comes from the french word “retailler” which translates “to resize.” This refers to breaking bulk or the sorting process.) the final activities and steps needed to place merchandise made elsewhere into the hands of the consumer or to provide services to the consumer Samestore sales defined? If a company is growing by opening new stores, then presumably total revenues would be rising. Comparing total sales at two different points in time might be misleading. Samestore sales control for this by only looking at revenues of stores open within a specific period. The “Endless Aisle” refers to what? : the fact that stores are making their products more widely available by allowing you to order items online as well as ordering them in store when the are out of/not in stock. This allows them to stock more popular selling items on shelf space without having to discontinue less popular items, in turn not disappointing any customer ex: Ikea's in store kiosks, Amazon or Dicks in store to order products not in stock What are private label brands ? may be store branding, when a retailer develops its own brand name and contracts with a manufacturer to produce the product with the retailer’s brand or designer lines, where a known designer develops a line exclusively for the retailer. What is a "category killer?" : offers an extremely wide. It is a retailer that carries such a large amount of merchandise in a single category at such good prices that it makes it impossible for customers to walk out without purchasing what they need, thus killing the competition. Ex: Home Depot, Best Buy, Bed Bath and Beyond, BuyBuy Baby, PetSmart. What is the North American Industrial Classification System (NAICS)? The North American Industry Classification System (NAICS, pronounced Nakes) was developed under the direction and guidance of the Office of Management and Budget (OMB) as the standard for use by Federal statistical agencies in classifying business establishments for the collection, tabulation, presentation, and analysis of statistical data describing the U.S. economy. Use of the standard provides uniformity and comparability in the presentation of these statistical data. What was the major reason WalMart became the largest retailer? store size/ trend, Employs over 2 million employees, Provides equity growth, Leads in sustainability, Can help nearby local businesses, Coordinates disaster relief with FEMA, Early adopter of organic and locally sourced groceries Which is the fastest growing emarketing type? mobile marketing Which retailer gets shopped at least once per year by 85% of the American population? Walmart (By reducing unnecessary expenses innovating efficiency with technology) Which group of retail products went from 95% made in America in 1960 to only 2% made in America today? Apparel. Be familiar w/the top 10 largest American retailers (recognize a retailer on a list as the one NOT on the top 10 list). 2014: Walmart, Kroger, Costco, Home Deop, Walgreens, Target, CVS< Lowes, Amazon, Safeway The share of U.S. online retail sales from 2012 to 2017 is forecast to be approximately what percent of total retail sales? 9% What is “inventory turnover”? “Margin” refers to gross margin, which is retail sale price minus cost of goods sold. “Turnover” refers to how quickly retailer inventory sells, or how many times a year the inventory turns ex: Jewelry stores (high margins, low turnovers) opposite = 711 How do you calculate gross margin percentage of retail? It is a measure of profitability derived by dividing gross margin by net sales. Shows how much gross margin (net sales – cogs) the retailer makes as a percentage of sales. Margins divided by net sales Chapter 2 Strategic Planning and Operations Management Strategic planning or planning is the anticipation and organization of tasks that need to be accomplished by certain timelines to reach an objective. According to retail scientist Paco Underhill, why do grocery stores often “assault” customers entering the store with pleasant smells, such as a bakery, Starbucks or flower kiosks? sense of smell connected to the brain's limbic system, impulse buying An advantage chain retailers enjoy that independent retailers cannot is what? the ability of the central purchasing unit to buy on favourable terms, lower operating costs, the ability to place advertising for all selling units at one time, and the freedom to experiment in one selling unit without risk to the whole operation. Chains are able to buy on more favourable terms than singleunit stores owing to the volume of the central unit’s purchases and its ability to bring specialized buying skills to bear in those purchases. Chains can also achieve significant economies by combined wholesaling and retailing operations within the same business organization, since this structure improves coordination between the two branches and spares the wholesaler from both credit risks and the need for a sales staff. Customer satisfaction is so important to retailers because?A negative word will spread more quickly than something positive, customer satisfaction is a way to differentiate the retailer from the competition Define operations management deals with the activities directed at maximizing the efficiency of the retailer’s use of resources. It is frequently referred to as daytoday management. How do service retailers measure productivity in ways differently than product retailers? Productivity objectives – states the sales objectives that the retailer desires for each unit of resource input: floor space, labor, and inventory investment. In retail strategic planning what does the “retail mix” refer to? the combination of merchandise, price, advertising, and promotion, location, customer service and selling, and store layout and design. think of retail strategy as… Retail Location + Target Market + Value Proposition + Retail Mix = Retail Strategy > Competitive Adv Retail Mix: The combination of merchandise, price, advertising and promotion, location, customer service and selling, and store layout and design In which retail industry would “yield management” be used? The understanding, forecasting and reacting to changing customer needs in order to maximize revenue from a fixed capacity of available services. This would be used in measuring the number of customers who enter the door to measure success, conversion. It could be used in the restaurant industry to know how many customers are needed to service so you can staff the place. Know the relationship between cost, gross margin and retail. Has something to do with Markup? Know the steps in the strategic planning process.Define the Mission, Set the Business Goals, Conduct a SWOT analysis and environmental analysis, set marketing strategy, manage op’ns to goals Name the features of a good mission statement. Short and sufficient, simple in plain language used everyday, operative and leads to clearly understood action, defines what the organization does Of the following characteristics, which is NOT desirable for a retail manager to possess? Indecisiveness Recall the four major types of objectives that a retailer can formulate? Societal, Market performance, personal, and financial performance Recognize the three retail growth strategies as presented in class. Define target market, Competitive advantage = value proposition, Define retail mix SWOT analysis? Strenghts, Weaknesses, Opportunities, and Threats Consumer behavior, Competitors actions, Supply chain, Socioeconomic factors, Emerging technology, Legal developments, Ethical considerations The most effective strategy for a retailer to differentiate itself in the eyes of consumers is to: satisfy the consumer’s needs and wants better than the competition Understand the four major retail growth strategies. Market Penetration: existing customers, existing product mix (BOGO) Market Development: New customers, existing product mix (target expands to canada) Product Development: New product mix, existing customers (taco bell servicing booze) Diversification: New product mix, new customers (amazon) Why are labor costs significant? they are a retailer’s largest controllable operating expense. Smart goals = specific, measurable, attainable realistic timely Financial = Productivity = Space: Sales per square foot (or per shelf foot or per store…) Labor: Sales per hour (or per shift or per FTE…) Merchandise: Sales per inventory dollar (or per vendor or per dept) Operation Management = Operations is concerned with maximizing the efficiency of the retailer’s use of resources and with how the retailer converts these resources into sales and profits. Labor Costs: retails largest controllable operating expense, Just in Time Inventory: or “quick response” (QR) – reduces average inventory on hand and therefore increases….?, EDI Ordering, EDI Receiving, Auto Replenishment, POS Technology, Shrinkage Reduction, Customer Analytics, Supply Chain Management Chapter 3 Retail Customer Customer Satisfaction: What happens when a retailer MEETS or EXCEEDS a customer’s expectations ∙ Market segmentation defined? the dividing of a heterogenous consumer population into smaller, more homogeneous groups based on their characteristics (age, size, gender, race, ethnicity, geographic) ∙ Trends regarding current U.S. population. plus size, baby boomers 19451964, generation x 6580, millenials 802000 ex Chuck E Cheese, Will grow to 422458 MM by 2050;65 y.o.+ will grow from 13% to 20% by 2050;Fertility rate now 2.1, highest in 45 years;15to65 y.o. will grow 42% from 20002050; U.S. will outpace China, Russia & India in population growth in next 20 years. ∙ The most reliable indicator of a person’s income potential, attitudes, and spending habits? direct = education & income ∙ The boomerang effect: the recent trend of children returning to live with their parents after having already moved out 50% of all college graduates return home to live with their parents. ∙ Disposable income minus the money needed for necessities to sustain life, such as minimal housing, minimal food, and minimal clothing is…? Discretionary Income ∙ The phases of the consumer decision process. Need recognition 2. Information search 3. Evaluation of Alternatives 4. Purchase 5. Post Purchase Evaluation ∙ The cost of losing a customer. It costs about five times more to gain a new customer than keep an existing customer. ∙ Habitual, limited & extended decision making examples? Habitual: When a consumer relies on past experience and converts the problem into a situation that requires less thought ex milk Limited: middle risk & time ex people EXtended high risk & time ex car ∙ Scrambled merchandising? exists when a retailer handles many different and unrelated items. Scrambled merchandising exists when a retailer handles many different and unrelated items. Scrambled merchandising is the result of the pressure being placed on many retailers to increase profits by carrying additional merchandises or services that will also increase store traffic ∙ What’s the ACSI and what does it’s research tell us about customer satisfaction? American Customer Service Satisfaction Index (Retail, Energy, Travel, Healthcare, Shipping & Mail, Telecommunications, Information Services, Restaurants, Manufacturing,Finance & Insurance, EBusiness, Government) Asseses how well retailers are satisfying their markets Retail sales = 27% of GDP, CSS is a leading indicator of financial performance, More service required >> lower satisfaction, Price promotions can be good shortterm, difficult to maintain, Quality improvements more sustainable than cost cutting, Mergers & acquisitions affect customer satisfaction negatively ∙ Service Quality Model? (Access, Communication, Competence, Courtesy, Credibility, Reliability, Responsiveness, Securities, Tangibles, Understanding/Knowing the Customer) Knowledge Gap (mcdonalds), Standards Gap (comcast), Delivery Gap (united airlines), Communication Gap (muni) ∙ Customer decision process? ease of shopping > ease of transaction > customer satisfaction ∙ Changes in the U.S. population as it ages? trends ethnic, geographic………. economic trends : income growth, personal savings, income disparity, income by groups social trends: education, marital status, makeup of household, changing nature of work ∙ What is true about the “income gap” today? bigger than it was in 5090s / now @ 20 25% ∙ GINI coefficient? 0 = even everyone same income:The Gini coefficient (also known as the Gini index or Gini ratio) is a measure of statistical distribution of the income of a nation's residents.If Gini = 1.0, all the income is concentrated in one person. ∙ How will retailers compete in light of slowing population growth? TAking away sales from competitors ∙ Five major fronts or factors retailers compete for customers on? price for value offered, product selection, service level, customer experience Chapter 4 The Competitive Marketplace: price for benefits offered, service level, product selection, location or access, customer experience ∙ Different types of competition structures (e.g. monopolistic…) Pure competition: Occurs when a market has homogenous products and many buyers and sellers, all having perfect knowledge of the market, and ease of entry for both buyers and sellers. Monopolistic Competition: products are offered at different, yet viewed as substitutable for each other and the sellers recognize that they compete with sellers of these different products Oligopolistic Competition: Occurs when relatively few sellers, or many small firms who follow the lead of a few larger firms, offer essentially homogenous products and any action by one seller is expcted to be noticed and reacted to by the other sellers demand side: where optimum price? total revenue ∙ Outshopping: also known as market gravitation or market leakage, is the practice of going outside the local community to buy goods. This affects retailers in smaller, rural, local communities ∙ Types of nonprice retail market strategies: Competing on price alone is a nowin situation because price is the easiest variable for competitors to copy.(Store positioning, Advertising strategy, Customer experience, Merchandise planning & assortment, Private label brands, Store layout) ∙ Intratype vs. intertype competition Intratype: same retail format (ex. KFC $5 box and Popeyes $5 box) Intertype: different retail format (ex. Costco selling books vs Barnes and Noble selling books) ∙ Divertive competition Using scrambled merchandising to take business from competitors. ∙ Three models of retail competition / evolution High End Strategy: high prices, excellent facilities and services, upscale consumers Medium Strategy: moderate prices, improved facilities, broader base of value and service conscious consumers Lowend Strategy: Low prices, limited facilities and services, price sensitive consumers Evolutionary Model: Levitt’s Product Life Cycle ∙ Newest types of retail formats Off price retailers, discount retailers, liquidators, recycled merchandise retailers ∙ Offprice vs. discounter retailers Off Price wholesale places like Costco, outlets like Grocery Outlet Discount Target, Walmart While discounters offer continuity of brands, offpricers carry only brands that they are able to get special deals from the manufacturer or closeout wholesalers ∙ Manufacturer brand vs. private label brand Private Label = retailer’s own brand (ex. Target’s brand Market Pantry) almost no difference in taste or quality but significantly lower price due to labeling and packaging Chapter 5 Managing the Supply Chain How will retailers compete in light of slowing population growth? by taking away sales from competitors Major strategies retailers use to compete for customers? PLUS articles and film clips embedded in the slides from the chapter lecture material. CHAPTER 5 EXTRA NOTES: Supply Chain Management: Set of approaches and techniques to integrate supply chain members into a seamless value chain to produce and distribute merchandise appropriately and minimize system costs with necessary service levels Supply Chain: raw materials sourcing > manufacturer > wholesaler > retailer > consumer > waste stream 8 supply chain functions: buying, selling, storing, transporting, sporting, financing, info gathering, and risk taking objectives: speed, accuracy, efficiency length of chain “time to market” “quick to market” or “fast fashion”: building a speedy supply chain “Retailers Are Investing In Cheaper, Faster Delivery” ex: Macy's: Can Sameday Delivery Deliver Results? “Macy’s Leases Big Chunk Of Former Campbell Soup Plant For Distribution Center” Two ways to manage a supply chain 1. vertical marketing system 2. develop strong relationships with supply chain partners Administered Vertical Marketing System: system without common ownership or contractual relationships; dominant channel member controls the relationship Contractual Vertical Marketing System: independent firms in different levels of the supply chain joined through contracts to obtain economies of scale and coordination and reduce conflict Corporate Vertical Marketing System: System in which parent company has complete control and dictates supply chain priorities and objectives Cooperatives: Retailers owned corporation ex: ace hardware true value Franchising Balance of channel power reward power: based on ability of A to provide rewards to B ex: Selling Real Estate in the Retail Store “Slotting Allowances” expertise power: based on B’s perception A has special knowledge referent power: based on B’s desire to be associated with A coercive power: based on B’s belief that A has the ability to punish or harm B if B doesn’t do what A wants legitimate powers: based on A’s right to influence B pr p B’s belief that B should accept A’s influence, based on A’s authority or ownership status allowing it to control B information power: based on the ability of A to provide B factual data Channel Collaboration: Mutual Trust & Solidarity Conflict: perception, domain, goals perceptual incompatibility supplier trailer differences goals incompatibility: dual distribution ex Levis domain disagreement: over control of channel diverters/ gray marketers category management videos: walmart: innovated tech., elf: bicycle car, taco bell: delivery, shrimp peeled by slaves sold to global marketers
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'