Exam Retailing Essay

Retailing-consists of the final activities and steps needed to place mathematical production made elsewhere into the hands of the consumer or to append answers to the consumer. Last step in supply chain. Trends that affect Retailing to mean solar day * E-tailing- ie. The Internet accounts for less than 5% of retail sales but has changed consumer behavior. (speed, convenience, wangle, big info, lowest prices) hasnt destroyed *Bricks-and-Mortar retail merchants Retailers that oper take out of a physical building. but B & M retail merchants must give nodes more control to combat E-tailing.Outshopping-when customers get needed info (such as proper size or how to assemble a product) in the reposition and then orders it online for a write down price and to avoid paying sales tax. * Price Competition Loss Leader-selling a product at or below its cost Bottom Line-net service on an income statement *Same-Store sales-comp bes an individual stores sales to its sales for the homogeneous month in the previous year. *Market Share-the retailers arrive sales divided by total market sales *Scrambled Merchandising- exists when a retailer handles many different and unrelated items.The result of the pressure cosmos placed on many retailers to profit profits by carrying additional mathematical product or services (with higher(prenominal) profit permissivenesss) that will also increase store traffic ex. Convenience store that sells low margin gasoline but high margin bread, milk, beer, ciggs ETC. Supercenters, gift cards in mart stores but causes cost increases in RENT, INVENTORY COSTS, LABOR COSTs *Category Killer-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 that they need, thus KILLING the competitionCategorizing Retailers Census Bureau- NAICS code figure of speech of outlets- Chain? Or not? *Standard Stock list-a merchandising method in which all stores in a retail chain stock the same merchandise *Optional Stock List approach-merchandising method in which each store in a retail chain is given the flexibility to chasten its merchandise mix to local tastes and demands. *Channel Advisor or Captain-the institution (manufacturer, wholesaler, broker, or retailer) in the marketing credit line that is able to plan for and get separate channel institutions to engage in activities they might not otherwise engage in.Large store retailers are often able to perform the role of channel captain. *Private Label Branding- May be store branding, when a retailer develops its own brand name and contracts with a manufacturer to produce the product with the retailers brand, or designer lines, where a known designer develops a line exclusively for the retailer. Margin/Turnover Gross margin percentage- measure of advantageousness GROSS MARGIN/NET gross sales Gross Margin-NET SALES COST OF GOODS SOLDOperating Expenses-expen ses that a retailer incurs in running the business other than the cost of merchandise Inventory Turnover- refers to the number of times per year, on average, that a retailer sells its inventory. High Performance retailers-retailers that produce financial results substantially superior to the industry average. Low margin/low turnover-operates on a low gross margin percentage and a low rate of inventory turnover will not be able to generate sufficient profits to remain competitive and survive. High Margin/Low turnover-(bricks and mortar) high gross margin percentage and low ate of inventory turnover ( high end stores, mom and pop) Clicks and Mortar-instore and online Low margin High turnover- low gmp, high rate of inventory turnover (wal mart, amazon. com) High, High- convenience stores, 7 eleven, circle k, Location- new non traditional places. Size *Store management- the retail career path that involves responsibility for selecting, training, and evaluating personnel, as well as inst ore promotions, displays, customer service, building maintenance, and auspices *Buying-retailing career path whereby one uses quantitative tools to develop appropriate buying plans for the stores merchandise lines.Analytical method finder and investigator of facts notional Method- Idea person Two pronged approach- both analytical and creative CHAPTER 2 Strategic planning- involves adapting the resources of the firm to the opportunities and threats of an ever changing retail environment * schooling of perpetration statement * Definition of specific goals and objectives for the firm * Identification and analysis of the retailers strengths, weaknesses, opportunities and threats SWOT ANALYIS * Development of basic strategies that will enable the firm to reach its objectives and effect its missionMission statement- a basic description of the fundamental nature, rationale, and direction of the firm. Market Share- retailers TOTAL SALES/ TOTAL MARKET SALES Profit-based Objectives-deal directly with the monetary return a retailer desires from its business ROI/RONW- Return on investment/ Return on Net worth(predicate) STRATIEGIC PROFIT get (MEMORIZE) Net ProfitMargin Net Profit /Total Sales Return on Assets Net Profit* /Total Assets Financial Leverage Total Assets/Net Worth Return on Net WorthNet Profit*/Net Worth X = Asset Turnover Total Sales/Total Assets Stockouts- products that are out of stock and therefore un addressable to customers when they want them Productivity objectives- state how much output the retailer desires for each unit of resource input point space, labor, and inventory investment. * Sales prod net sales/ total square feet of retail floor space * Labor prod net sales/of spacious time equivalent employees * Merchandise prod net sales/average dollar investment in inventorySocietal Objectives- those that reflect the retailers desire to help society fulfill some of its needs. * Employment objectives * Payment of Taxes * Consumer Choice * Equity * Being a benefactor RASM- (revenue per available tail end mile) calculation used by airlines. Yield Management- the understanding, anticipating and reacting to changing customer needs in order to maximize the revenue from a fixed capacity of available services. (1)low marginal costs (2)fixed capacity (3) perishable product (4)fluctuation demand (5)different market segmentsPersonal Objectives-reflect the retailers desire to help individuals employed in retailing fulfill some of their needs. * Self Gratification * Status and respect * Power and authority Strategy- a carefully designed plan for achieving the retailers goals and objectives. 3 strategies Get shoppers into your store/ traffic strategy Convert these shoppers into customers by having them purchase merchandise (retailers conversion Do this at the lowest operating cost possible that is consistent with the level of service that your customers expectTarget market-the group of customers that the retailer is seeking to serve L ocation-geographic or cyber space where the retailer conducts business Retail mix- the combination of merchandise, price, advertising and promotion, locations, customer service and selling, and store layout and design Value proposition- clear statement of the tangible and/or intangible results a customer receives from shopping at and using the retailers products or services Operations Management- deals with activities directed at maximizing the efficiency of the retailers use of resources. It is frequently referred to as day to day management.CHAPTER 6 Horizontal Price Fixing- occurs when a group of competing retailers (or other channel members operating at a given level of distribution) establishes a fixed price at which to sell certain brands of products ILLEGAL violates Sherman Antitrust Sec 1 Vertical Price Fixing-occurs when a retailer collaborates with the manufacturer or wholesaler to resell an item at an agreed upon price Price discrimination- occurs when 2 retailers buy an identical amount of like grade and quality merchandise from the same supplier but pay different prices. Clayton act makes only certain forms illegal DEFENSESCost justification- differential in price could be accounted for on the basis of differences in cost to the seller in the manufactur, sale, or delivery. Due to differences in quantity or method. Changing market differences-justifies based on the danger of imminent downslope of perishable goods or on the obsolescence of seasonal goods. Meeting Competition in good faith -lower price was made in good faith in order to meet an equally low price of a competitor Deceptive Pricing-occurs when an misleading price is used to lure customers into the store and then hush-hush charges are added or the item advertised may be unavailable.Predatory Pricing-exists when a retail chain charges different prices in different geographic areas to fleet competition in selected geographic areas. Palming off-occurs when a retailer represents that mer chandise is made by a firm other than the true manufacturer Deceptive advertising-when a retailer makes false of misleading advertising claims about the physical makeup of a product, the benefits to be gained by its use, or the appropriate uses for the product. Bait and switch- advertising or promoting a product at an unrealistically low rice to serve as bait and then trying to switch the customer to a higher priced product. Product liability laws-deal with the sellers responsibility to market safe products. These laws invoke the forseeability doctrine, which states that a seller of a product must attempt to preclude how a product may be misused and warn the consumer against hazards of misuse. Expressed warranties- are either written or verbalized agreements about the performance of a product and can cover all attributes of the merchandise or only one attributeImplied warranty of merchantability- made by every retailer when the retailer sells goods and implies that the merchandise sold is fit for the ordinary purpose for which such goods are typically used Implied warranty of fitness- a warranty that implies that the merchandise is fit for a particular purpose and arises when the customer relies on the retailer to assist or make the selection of goods to serve a particular purpose Territorial restrictions-are attempts by the supplier, usually a manufacturer, to limit the geographic area in which a retailer may resell its merchandiseDual distribution- occurs when a manufacturer sells to item-by-item retailers and also through its own retail outlets One way exclusive dealing arrangement-occurs when the supplier agrees to give the retailer the exclusive right to sell the suppliers product in a particular trade area Two way exclusive dealing arrangement- occurs when the supplier offers the retailer the exclusive distribution of a merchandise line or product in a particular trade area if in return the retailer will agree to do something or the manufacturer, such as heavily promote the suppliers products or not handle competing brands. ILLEGAL. Tying agreement-exists when a seller with a strong product or service requires a buyer to purchase a weak product or service as a condition for buying the strong product or service Ethics-set of rules for human moral behavior Explicit code of ethics-consists of a written policy that states what is ethical and unethical behavior Implicit code of ethics- an offhanded but well understood set of rules or standards of moral responsibility Chapter 14Empowerment- occurs when employees are given the power in their jobs to do the things necessary to pander and make things right for customers. Servant leadership-an employees recognition that their primary responsibility is to be of service to others. 20% of customers generate 80% of sales value proposition-the promised benefits a retailer offers in relation to the cost the consumer incurs customer relationship management CRM-comprised of an integrated informa tion system where the fundamental unit of data collection is the customer, supplemented by germane(predicate) information about the customer erformance appraisal and review- is the formal, systematic assessment of how well employees are performing their jobs in relation to established standards and the communication of that assessment to employees Motivation-is the purport that a person has to excel at activities, such as a job, that he or she undertakes Esprit de corps- occurs when a group of workers feel a common mission and a passion for that mission and a pride in being part of the groupFixed component- typically is composed of some base remuneration per hour, week, month, or year Variable component-is often composed if some bonus that is received if performance warrants Fringe benefit package-is a part of the total stipend package offered to many retail employees and may include health insurance, disability benefits, life insurance, retirement plans, child care, use of an a uto, and financial counseling Job enrichment- the bear upon of enhancing the core job characteristics to improve the motivation, productivity, and job satisfaction of employees.