Retail MKT 320 Test 2
Retail MKT 320 Test 2 MKT320
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This 14 page Study Guide was uploaded by Cathy Anderson on Sunday February 1, 2015. The Study Guide belongs to MKT320 at Florida International University taught by Ian Scharf in Fall. Since its upload, it has received 256 views. For similar materials see Retail Marketing in Marketing at Florida International University.
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Clutch. So clutch. Thank you sooo much Cathy!!! Thanks so much for your help! Needed it bad lol
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Date Created: 02/01/15
Chapter 7 Retail Locations Types of Locations Need to evaluate Size of trade area 0 Occupancy cost Pedestrian and vehicle customer traf c 0 Convenience Trade area geographic area that encompasses most of the customers who would patronize a speci c retail site Free standing site retail location for individuals the retailers is not connected to other retailers They might be near a shopping center Outparcel Free standing site next to another mall Not connected to mother store in the shopping center but are located on the premises in a parking lot banks McDonald fast foodetc They have limited trade area higher occupancy costs and little pedestrian traf c City or Town CBD Central Business District The traditional downtown business area in a city or town 1 Main StreetFound in small towns or suburbs a Streets converted into pedestrian walkways 2 Inner city High density urban area in large cities that are typically being redeveloped a Higher unemployment and lower median income b They provide services to and jobs to inner city residents 3 Shopping center group of retail and other commercial establishments that are planned developed owned and manages as a single property a Have one or two major retailers anchor stores They attract signi cant number of consumers i Strip shopping centers attached rows of nonenclosed stores with onsite parking usually located in front of the store 1 Anchored by supermarket or drugstore 2 Convenient locationeasy parking ii Power centers Shopping centers that consist of primarily of collections of bigbox retail stores Target offprice stores Marshalls warehouse clubs Costco category specialist Lowes 1 Free standing anchors iii Shopping Malls enclosed two department store anchors and specialty stores in between they are dying 1 Regional Mallless than 800000 sq ft vs Super regional malls more than 800000 sq ft attract many shoppers and have a large trade area inexpensive form of entertainment customers don39t worry abt weather higher occupancy costs strong competition iv Life 5 yle centers shopping centers that have an openair con guration of specialty stores entertainment and restaurants 1 Convenient for shoppers pedestrian friendly 2 lower occupancy costs 3 located near higherincome areas 4 part of mixed used development v Mixed Used Development combine retail with residential and business or other functions vi Outlets shopping centers that contain mostly manufactures and retailers outlet stored 1 have a strong entertainment component sometimes 2 tourism represents 50 of traf c vii Pop up storestemporary stores seasonal within a month viii Merchandise kiosk temporary selling spaces Typically located in the walkways of shopping malls eweww Location Retail Strategy a Convenience Strip malls b Greater comparisons shopping malls c Greater specialty power centers and shopping mall Legal Issues 1 Environmental and Sustainability a Two issues i Above Ground bugs lead pipes etc ii Below ground waste disposal 2 Zoning and Building Codes a Determines how a particular site can be used where you can put residential vs commercial i Building codeslegal restrictions that specify the type of parking lot etc for a speci c location ii Signs sign sizes and styles iii licensing requirementsVary upon regions liquor licenses Chapter 8 Retail Site Location Metropolitan Statistical Area MSA core urban area containing a population more than 50000 Micropolitan Statistical Area MiSA is a smaller unit of analysis with only 10000 inhabitants in its core urban area Best areas to locate a store are those that generate the highest longterm pro ts for a retailer Dependent on 1 The economic conditions 2 Competition 3 The strategic t of the area s population with the retailers market 4 The cost of operating stores Evaluating a site for locating a retail store 1 Site Characteristics a The traf c ow past the site and accessibility to the site i Natural barriers rivers and mountains vs Arti cial barriers railroad tracks parks highways b The characteristics of location i Parking of parking spaces congestion how bunched up it is to get into store ii Visibility customers39 ability to see the store from the street iii Adjacent tenants play well or hurt others c The costs associated with locating the site Trade Area A contiguous geographic area that accounts for the majority of a stores sales and customers Three areas 1 Primary trading area 5070 of customers 2 Secondary trading area 2030 of customers 3 Tertiary trading area everyone else i Parasite store one that does not create its own traf c and whose trade area is determined by the dominant retailer in the shipping center or area Census count of the population of a country as of a speci c date Demographic information based on sex age ethnicity education marital status etc Geographic Information system GIS a system of hardware and software used to store retrieve map and anlyze geographic data Negotiating a lease 1 Percentage leasethe rest is based on a percentage of sales a Retailers also pay a maintenance fee based on the of their square footage A percentage lease with a speci ed maximum is a lease that pays the lessor landlord a of sales up to a maximum amnt A percentage lease with a speci ed minimum means that the retailer must pay a minimum rent no matter how low sales are Sliding scale leasethe of sales paid as rent decreases as the sales go up 2 Fixed rate leases are most commonly used by community and neighborhood centers a Retailers pay a xed amnt per month over the life of the lease Graduated lease the rent increases by a xed amnt over a speci ed period of time A maintenance increase recoupment lease allows the landlord to increase the rent if insurance property taxes or utility bills increase beyond a certain point Chapter 9 Human Resource Management Human Resource Management HRbuild a basis for a sustainable competitive advantage and align the capabilities and behaviors of employees with the short and long term goals of the retail rm 1 Employee productivity related to retailers short term pro ts retailers sales or pro t divided by the number of employees 2 Employee turnover longterm performance of retailer number of employees leaving their job during the year divided by number of positions Desionino the organization structure for a retail rm Organization structure identi es the activities to be performed by speci c employees and determines the lines of authority and responsibility in the rm 1 Determine the task that must be performed a b C d Strategic management Administrative management operations Merchandise management Store management Single Store Retailer have little specialization because the of employees is limited each employee must perform a wide range of activities and the ownermanager is responsible for all management tasks 0 Merchandise managerBuyer handle the advertising and promotion tasks as well as merchandise selection and inventory management task National Retail Chain Managers must supervise units that are geographically distant from one another CEOResponsible for the entire organization MerchandisingSenior Vice President of merchandising SVP works with buyers and planners to develop and coordinate the management of the retailers merchandise Merchandising Planners responsible for allocating merchandise and tailoring the assortment of several categories for speci c stores in a geographic area Retail Organization Desion Issues Centralization occurs when the authority for retailing decisions is delegated to corporate managers rather than to geographically dispersed managers Decentralization occurs when the authority for retail decisions is assigned to lower levels in the organization A Retailers reduce cost when decision making is centralized in corporate management 1 Fewer managers are required to make the merchandise HR marketing real estate information system and nancial decisions 2 Buying across geographically dispersed stores the company can achieve lower prices from suppliers 3 Best ppl make decisions for the entire corporation 4 Increases ef ciency 5 Makes it harder for retailer to adapt to local market conditions Coordinatino Merchandise and Store Manaoement 3 Approaches large retailers use to coordinate buying and selling 1 Improving buyers appreciation for the store environment a Help corporate managers and buyers gain and appreciation for the activities performed in the stores the problems salespeople and department managers39 encounter and the needs of customers 2 Making Store Visits a Another form to increase customer contact and communication is having buyers and executives visit stores 3 Assigning Employees to Coordinating Roles Motivating employeesOrganization Culture The set of values traditions and customs of a rm that guides employee behavior Building Employee Commitment Skill development in Hiring and Training 1 Empowering employeestransfer decision making authority to employees a Employees become more con dent 2 Creating partnership relationships 1 Reduce status differences a Increase communication b Lower wage difference 2 Promote from within 3 Balance career and family a Flextime scheduling system that enables employees to choose the times they workgiven amnt of hrs to work per week b Job sharing 2 employees voluntarily are responsible for a job that was previously held by 1 person Career Development and Promotions Glass Ceiling and invisible barrier that makes it dif cult for minorities and women to be promoted beyond a certain level Leoal issues in HR manaoement 1 Equal Employment Opportunity protect employees from unfair discrimination in the workplace a lllegal discrimination b Protected class a group of individuals who share a common characteristic as de ned by law 2 Compensation40 hrweek over time rate and minimum wage a Same pay for menwomen doing the same work 3 Labor relations describe the process by which unions can be formed 4 Employee safety and healthemployer is obligated to provide each employee with an environment that is free of hazards 5 Sexual harassment 6 Employee privacy Perceptions of fairness 1 Distributive justice a When the outcomes received are viewed as fair with respect to the outcomes received by others 2 Procedural justice a Based on the fairness of the process used to determine the outcome Chapter 11 Customer Relationship Management CRMCustomer Relationship Management is a business philosophy and set of strategies programs and systems that focuses on identifying and building loyalty with a retailers most valued customers Share of Wallet of the customer s purchases made from the retailer wallet CRM Process Customer loyalty a Committed to retailer b Resisting competitive offers 1 Collecting customer data i Transactions SKU level ii Customer contacts iii Customer preferences stylesbrands iv Descriptive informationDemogrpahicpsychographic data v Responses to marketing activity b Identifying information i Asking customers for their identifying information 1 Ask while they shop ii Using biometrics 1 Identifying customers thru a card less cashless method nger print iii Offering frequent shopper programs 1 Programs that identify and provide rewards to customers who patronize a retailer 2 Frequent shopper card or privatelabel credit card iv Connecting internet and store purchasing data c P vacy i Cookiestext les that identify visitors when they return to a website ii USAthe retailer owns the info if the customer doesn39t want to be a part of it they quotoptoutquot iii European Unionthe consumer owns their info if the retailer wants to use it the customer has to quotoptinquot 2 Analyzing the customer data and identifying target customers a Identifying patterns in the data that can improve the effectiveness of retailing decisions b Deciding where to place merchandise categories in a store A Retail Analyticsstatistical techniques to nd patterns in a customer s purchase data B Market basket Analysis analysis of items that are purchased together Determines product locations C Identifying the Best Customers3 Ways i CLVCustomer Lifetime valueamnt of spent in your relationship with the retailer ii Customer pyramid 1 2 3 4 iii RFM r analys Platinum Segemnt top 25 CLV most loyal Goldnext 25 Ironremaining 50 Lead unpro table ecency frequency monetary isUsed by catalog retailers based on how recently they have made a purchase how frequently and how much they have bought 3 Developing CRM programs a Convert Good customers into best customers Customer Alchemy converting irongold customers to platinum 1 Addon sellingselling more products and services to existing customers ii Unprofitable Customers 1 Offer less costly services to satisfy the needs of lead customers 2 Charging customers for the services they are abusing 4 Implementing CRM programs Chapter 12 Managim the Merchandise Planning Process Merchandise Management Process by which a retailer offers the right quantity of the right merchandise in the right place the right time and meet the company39s nancial goals 4 Levels 1 Merchandise Group Senior Vice President is in chargeresponsible for several departments 2 Department Managed by Divisional Vice President 3 Classi cation Group of items targeting the same customer type 4 Stock Keeping Unit SKU particuar sizecolor and style Merchandise Catedorv an assortment of items that customers see as substitutes for each other Catedorv Management assigns one buyer or category manager to oversee all merchandising activities for the entire category Ensure that the stores assortment includes the quotbestquot combination of sizes and vendors Category Captains Works with the retailer to develop a better understanding of shopping behavior create assortments that satisfy consumer needs and improve the pro tability of the merchandise category c Makes merchandise management easier and can increase pro ts TVpes of Merchandise Management Planning Process 1 Staple Merchandise basic merchandise category categories that are in continuous demand over an extended time period a Limited product introductions b Continuous replenishment generating replacement orders automatically when inventory levels drop below predetermined levels 2 Fashion Merchandise categoryInconsistent demand for a short period of time a Continuous introduction of new product b Goal is to be close to out of stock as possible at the same time the SKU becomes out of fashion 3 Seasonal Merchandise items whose sales uctuate dramatically depending on the time of the year Forecasting Fashion Merchandise Previous Sales data Fashion amp Trend services Vendors Market Research PWF a Depth lnterview an unstructured personal interview in which the interviewer uses extensive probing to get individual respondents to talk in detail about a certain subject b Focus Group small group of respondents interviewed by a moderator using a loosely structural format Developing an assortment plan Assortment Plan the set of SKU39s that a retailer will offer in a merchandise category in each of its stores Re ects the breadth and depth of merchandise in a merchandise category a Variety breadth of different merchandising categories offered b Assortment depth of SKUs within a category Product Availability of the demand for a particular SKU that is satis ed Determined by back up stock buffersafety rock Establishing a control system for managing inventory The objective of the control system is to manage the ow of merchandise into the stores so that the amount of inventory in the category is minimized but the merchandise will still be available when customers want to buy it Control svstem for staple merchandise a Cycle Stock base stock inventory for which the level goes up and down due to the replenishment process a Merchandise you keep on hand if you can predict demand b Back up stock the level of inventory needed to ensure merchandise is available in light of uncertainties a Cushion for cycle stock so you don39t run out i The level depends on the product availability the retailer wants to provide ii The greater the uctuation in demand the more back up stock is needed iii Amount of back up stock also affected by lead timeamount of time from when you place and to when it arrives iv Vendors ll ratethe of complete orders received from a vendor c Order Point the amount of inventory below which the quantity available shouldn39t go or the item will be out of stock before the next order arrives Open to buy system a Used to keep track of the actual merchandise ow i What present inventory level is when purchased merchandise is schedules for delivery and how much has been sold to customers Analvzino merchandise management performance 1 Sell Through Analysis a Compares actual and planned sales to determine whether more merchandise is needed to satisfy demand or whether price reductions are required i Markdown money funds that a vendor gives a retailer to cover lost gross margin dollars that result from markdowns 2 ABC Analysis of assortments a Identi es the performance of individual SKUs in the assortment plan b Used to determine which SKU should be in the plan and how much backup stock and product availability c 8020 principle80 of a retailers sales or pro ts come from 20 of the products i A items accnt for only 5 of the SKUs in the category but represent 70 of sales ii B items represent 10 of the SKUs and 20 of sales iii C items account for 65 of SKUs but only 10 of sales iv D items are 20 of SKU but no sales ti marked down 3 Multiattribute analysis of vendors
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