Marketing bán hàng - Chapter 2: Types of retailers

Chapter 2 Types of RetailersThe World of RetailingGrowing Diversity of FormatsIncreasing Industry ConcentrationGlobalization2 General Trends in RetailingNew Types of RetailersIncreased ConcentrationGlobalizationGrowth In Services RetailerDemise of Pure Electronic Retailers (Webvan, eToys, etc) Growth in Use of Multi-Channel Retailing by Traditional RetailersIncrease Use of Technology to Reduce Cost, Increase Value Delivered3Merchandise OfferingVariety (breadth of merchandise) The number of merchandise categoriesAssortment (depth of merchandise)The number of items in a category (SKUs)Stockbyte/Punchstock ImagesJack Star/PhotoLink/Getty ImagesC Squared Studios/Getty ImagesRoyalty-Free/CORBISRoyalty-Free/CORBISRoyalty-Free/CORBISRoyalty-Free/CORBIS4Variety and Assortment of Bicycles5Food RetailersMom and Pop StoresConvenience StoresSupermarketsSupercentersGeneral Merchandise RetailersDepartment StoresSpecialty StoresDiscount StoresCategory SpecialistsOff-Price RetailersWarehouse ClubsTypes of Retailers6NAICS Codes for Retailers7Food Retailers Primary Shopping Format for Food Sales Growth Rates by Retail Format8Globalization of Wal-Mart9Characteristics of Food Retailers10Limited Assortment SupermarketsSave-A-Lot’s limited assortment formatmeans that stores carry the mostfrequently purchased grocery items inthe most popular size and varietyThe company carries high qualityexclusive brands – many produced by thesame manufacturers of leading namebrands – and an assortment of nationallybranded items.This allows Save-A-Lot to offer savings of up to 40% compared to conventional grocery stores – without asking shoppers to sacrifice quality.Used by permission of Save-A-Lot 11Conventional Supermarket Survival PackEmphasize Fresh PerishablesTarget health conscious and ethnic consumersProvide a better in-store experienceOffer more private label brands12Food Retailers Supermarkets -Cars, highways and TV to build brands -Knowledgeable customers – self service -Perishable vs. packaged goodsBig Box Retailers -Warehouse Clubs -Supercenters -Hypermarkets Convenience Stores13Convenience Stores Fight CompetitionTailors associates to local marketStores are more convenient to shopOffers fresh foodFast, casual restaurantsFinancial services availableOpening smaller stores closer to consumers – like airports14Issues in Food Retailing Competition from Discount Stores Changing Consumption Patterns Efficient Distribution Lower CostsLower PricesTime PressureEating Out MoreMeal Solutions15Types of General Merchandise RetailersDepartment StoresSpecialty StoresCategory SpecialistsHome Improvement CentersDiscount StoresDrugstoresOff-Price retailersExtreme Value Retailers16Characteristics of General Merchandise Retailers17Issues in Department Store RetailingCompetition -Discount Stores on Price -Specialty Stores on Service, Depth of AssortmentLower Cost by Reducing Services (?) -Centralized Cash WrapsMore Sales (?) -Customers Wait for SaleFocus on Apparel and Soft HomeDevelop Private Labels and Exclusive Brands18Three Tiers of Department StoresFirst Tier: upscale, high fashion chains with exclusive designer merchandise and excellent customer service.Example: Nordstrom, Neiman Marcus, Bloomingdales, Saks Second Tier: Retailers sell more modestlypriced merchandise with less customer service: Example: Macy’s Third Tier: Value oriented caters to more price conscious customerExample: JCPenney, Sears, Kohl’sRob Melnychuk/Getty Images19What To Do With an Eroding MarketTo deal with an eroding market Department stores are:attempting to increase the amount of exclusive merchandise they sellundertaking marketing campaigns to develop strong images for their stores and brandsbuilding better relationships with their key customersRoyalty-Free/CORBIS20Issues in Discount Store RetailingOnly Big Three Left Wal-Mart, Kmart, TargetWal-Mart’s DominanceDifferentiate Strategy Wal-Mart = Low Price and Good value Target = More Fashionable ApparelCompetition from Category Specialists Toys-R-Us, Circuit City, Sports AuthorityMcGraw-Hill Companies, Inc./Gary He, photographer21Issues in Specialty Store RetailingMall-Based Apparel RetailersDecline in Mall Shopping and Apparel Sales-Lack of New Fashions-Less Interest in Fashion-Increase Price ConsciousnessLifestyle Formats – Abercrombie and Fitch and Hot TopicsMcGraw-Hill Companies, Inc./Gary He, photographer22Issues in Drug Store RetailingConsolidation – Walgreens, CVS, Rite-AidCompetition from Supermarkets, discount Stores and mail-in ordersEvolution to a New Format-Stand Alone Sites with Drive Thru Windows-offering more frequent purchase food itemsImproved systems provide personalized service in the pharmacy Keith Brofsky/Getty Images23Category SpecialistsDeep and Narrow Assortments Destination StoresLow Price and ServiceWholesaling to Business Customers and Retailing to ConsumersIncredible GrowthRyan McVay/Getty Images24Issues in Home Improvement CentersHome Depot and Lowes act as both: Retailer and WholesalerConsumer Business 25Home Improvement CentersDisplays are warehousedCustomer Service: How to select and how to use merchandiseCompetition focuses on price, effort to differentiate and services providedRyan McVay/Getty Images26Issues in Extreme Value RetailingFocuses on Lower Income ConsumersNames mostly imply good value not $1 price pointsLow Cost LocationLimited ServicesOne of the Fastest Growing Retail SegmentsDollar Tree Family DollarDollar General 99 Cents Only StoreStockbyte/Punchstock Images27Non-store Retail FormatsElectronic RetailingCatalog and Direct MailDirect SellingTelevision Home ShoppingVending MachinesRoyalty-Free/CORBISRyan McVay/Getty Images28Electronic RetailingHistory of frenzied investments and false predictions of retail dominancePrimarily used by traditional retailers to compliment store and catalog offeringsExclusive e-tailers target small and dispersed niche marketsRandy Allbritton/Getty Images29What are Amazon and eBay? Amazon.com – Merchandise to consumers. Provides website development and fulfillment services to other retailerseBay – Acts as a mall or other shopping center providing a “place” for buyers and sellers to meetDon Farrall/Getty Images30Issues in Catalog RetailingLow Start Up CostEvolution of Multi-Channel OfferingHard to compete with large well established firmsIncreasing Mail CostsClutter from other CatalogsGeneral merchandise catalogs like JC PenneySpecialty Catalogs like JC Whitney, Victoria Secret31Issues in Direct SellingProviding information and demonstrations is costlyParty plan system: merchandise is demonstrated in a party atmosphereMulti-level network: Master distributors sell to distributors who sell merchandisePyramid schemes: Firm sells to other distributors and little if any merchandise goes to end users32Issues in Television Home ShoppingConsumers watch cable stations, infomercials or direct response adsFew consumers watch regularlyMost purchases made by small proportion of viewersCustomers can’t examine merchandiseCustomers must wait for merchandise to come onSells mostly jewelry, apparel, cosmetics, kitchenware, exercise equipmentRoyalty-Free/CORBIS33Issues in Vending Machine RetailingSales growth has been declining due to higher prices and healthier eating habitsNew technology may help sales growthVending machines are beginning to accept creditTrend of placing machines in captive consumer locationsRyan McVay/Getty Images34Types of Nonstore Retailers35Sales by Catalog Retailers36Services vs. Merchandise Retailers Intangibility -Problems in Evaluating Service Quality -Performance of Service Provider Simultaneous Production and Delivery -Importance of Service Provider Perishability -No Inventory, Must Fill Capacity Inconsistency of the Offering -Importance of HR Management37Type of Service Service Retail FirmsAirlines American, Delta, British Airways, Singapore AirwaysAutomobile maint/repair Jiffy Lube, Midas, AAMCOAutomobile rental Hertz, Avis, Budget, AlamoBanks Citibank, NCNB, Bank of AmericaChild care centers Kindercare, GymboreeCredit cards American Express, VISA, MastercardEducation University of Florida, Babson CollegeEntertainment parks Disney, Universal Studios, Six FlagsExpress package delivery Federal Express, UPS, US Postal ServiceFinancial services Merrill Lynch, Dean WitterFitness Jazzercise, Bally’s, Gold’s GymHealth Care Humana, HCAHome maintenance Chemlawn, MiniMaid, Roto-RooterExamples of Service Retailers38Examples of Service RetailersType of Service Service Retail FirmsHotels and motels Hyatt, Sheraton, Marriott, Days InnIncome tax preparation H & R BlockInsurance Allstate, State FarmInternet access/Elec info. American On-Line, CompuServeMovie theaters AMC, Loews/Sony, UniversalReal estate Century 21, Coldwell BankerRestaurants TGI Friday’s, Wendy’s, Pizza HutTruck rentals U-Haul, RyderWeight loss Weight Watchers, Jenny CraigVideo rental Blockbuster, Hollywood VideoVision centers Lenscrafter, Pearle39Merchandise/Service Continuum40Types of Retail Ownership Independent, Single Store EstablishmentsWholesaler Owned Cooperatives Corporate Chains Franchises(c) Brand X Pictures/PunchStock41Retailers Using Franchise Business Model42Franchising30 – 40% of US Retail SalesFranchisee Pays Fixed Fee Plus % of SalesFranchisee Implements ProgramWhy is This Ownership Format Efficient?The McGraw-Hill Companies, Inc./Jill Braaten, photographer43Reasons for Franchising GrowthTechnological advancesProfitable utilization of capital resourcesAttainment of the “American Dream”Demographic expansionProduct/service consistency44Types of Franchise SystemsTerritorialOperatingMobileDistributorshipCo-ownershipCo-managementLeasing/LicensingManufacturingService45Reasons for Franchising FailureInept managementFraudulent activitiesMarket saturation46Franchisor Positions in the Marketing ChannelManufacturer - retailerManufacturer - wholesalerWholesaler - retailerService sponsor - retailer47Franchisor BenefitsContinuous marketMarket informationMoneySales of productsRental and lease fees License feesManagement feesRoyalty fees48Franchisee BenefitsInitial ServicesMarket survey and site selection, facility design and layout, lease negotiation advice, financing advice, operating manuals, management training programs, and employee training.Continuous ServicesField supervision, merchandising and promotional materials, management and employee retraining, quality inspection, national advertising, centralized purchasing, market data and guidance, auditing and record keeping, management reports, and group insurance plans.49Franchisor Advantages/DisadvantagesAdvantagesRapid expansion, highly motivated franchisees do a good job, additional profits by selling franchisees products and services.DisadvantagesCompany-owned units may be more profitable, less control then independent retailers over advertising, pricing, personnel practices, etc.50Franchisee Advantages/DisadvantagesAdvantagesEstablished/proven product/service, business and technical assistance, and reduction in risk.DisadvantagesLoss of control since only semi-independent, franchisee outlets may compete with corporate-owned outlets, and high royalties, fees, costs on equipment, supplies, merchandise, rental/lease rates and mandatory participation in promotional and support services.51Franchising Trends for the New MilleniumSustained growthEnduring plus un-imagined applicationsInternational expansionIncreasing tensionsGreater emphasis on financial returns52Which Types of Retailers Will Be the First to Pursue Global Markets?Discount StoresCategory SpecialistsDepartment StoresSupermarketsServices Retailers53Increasing Concentration Drug Stores Walgreens, CVS, Rite-Aid and Eckerds53% of sales85% of sales Discount StoresWal-Mart, Target and Kmart54Why Is the Retail Industry Becoming More Concentrated?Traditionally retailers have been local businesses.Why are bigger firms emerging?Why are least concentrated sectors food retailers and services retailers?55