MAR 3023 PRINCIPLES OF MARKETING

1
MAR 3023 PRINCIPLES OF MARKETING

• Dr. Jaishankar Ganesh
• BA2 308G
• Retailing
• November 05 07, 2003

2
Retailing
All the activities directly related to the sale
of goods and services to the ultimate consumer
for personal, non-business use.
3
Major Types of Retail Operations
4
Classification of Retail Operations
5
Classification of Ownership
6
Basic Forms of Franchising
7
Level of Service
Full Service
Self Service
Discount stores
Exclusive stores
Factory outlets Warehouse clubs
8
Classifying Retailers by Product Lines

• Category Killer

Specialty Stores
Specific NARROW line
9
Classifying Retailers by Product Lines

• Department store
• Discount house
• Off-price retailer
• Catalog retailer

General Merchandise
10
Nonstore Retailing
11
Direct Marketing
12
Electronic Retailing
13
Retail Marketing Strategy
14
Defining a Target Market
15
Choosing the Retailing Mix
STEP 2 Choose the Retailing Mix
16
The Retailing Mix
17
Product Offering
The mix of products offered to the consumer by
the retailer also called the product assortment
or merchandise mix.
18
Merchandising Strategy

• Category management Retailing strategy which
  views each product category as an individual
  profit center, and the retailer manages the
  performance and growth of the entire category
• Scrambled Merchandising Combining dissimilar
  product lines to boost sales volume.

19
The Battle for Shelf Space

• Slotting allowances fees paid by manufacturers
  to secure shelf space from retailers

20
Retail Promotion Strategy
21
Factors to Consider in Site Selection
22
Location Decisions
23
Shopping Center and Mall Locations

• Advantages
• Design attracts shoppers
• Activities and anchor stores draw customers
• Ample parking
• Unified image

• Disadvantages
• Expensive leases
• Failure of common promotion efforts
• Lease restrictions
• Anchor store domination
• Direct competitors

24
Price
25
Gross Margin
The amount of money the retailer makes as a
percentage of sales after the cost of goods sold
is subtracted.
26
Pricing Strategy

• Markup The amount a retailer adds to a
  products cost to determine its selling price
• Markdown The amount by which a retailer reduces
  a products original selling price

27
Examples

• Markup as of Selling Price Markup / Selling
  Price
• Markup as of Cost Markup / Cost
• Product A costs 60 and sells for 100. Compute
  the markup as a of SP and as a of costs.
• Markup 100 - 60
• Markup 40
• Markup as on Selling Price 40 / 100 40
• Markup as on Costs 40 / 60 67

28
Examples

• Markdown Dollar Amount of Markdown / Original
  Selling Price
• Product A sells for 100. Since demand is low at
  this price, the retailer decides to change the SP
  to 80. Compute the markdown .
• Dollar amount of markdown
• Dollar amount of markdown 100 - 80 20.
• Markdown 20 / 100 20

29
Presentation of the Retail Store
30
Atmospherics

• Five Senses
• Sight
• Sound
• Feel
• Taste
• Smell

31
Sexy Smells

• Smell and Taste Treatment and Research
  Foundation, Chicago
• Alan Hirsch
• What odors turn people on?
• Subjected volunteers to various odors while
  measuring blood flow

32
Personnel and Customer Service
33
Trends in Retailing