Professional Documents
Culture Documents
Chapter 2
Chapter 2
PPT 2-1
Chapter 2
Types of Retailers
McGraw-Hill/Irwin
Levy/Weitz:
PPT 2-2 Retailing Management, 5/e Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
The World of Retailing
PPT 2-3
Trends in Retailing
Globalization
PPT 2-4
New Types of Retailers
• Category Specialists
-PetsMart
-Bed, Bath and Beyond
- Michaels
• CarMax and Auto Nation
• Wal-Mart Supercenters
-Supermarket + Discount Store
• Ebay, Priceline, Travelocity
PPT 2-5
Increasing Concentration
53% of sales
85% of sales
PPT 2-6
Globalization of Wal-Mart
PPT 2-7
Types of Retailers
PPT 2-9
Sales by Merchandise Category
PPT 2-10
Merchandise Offering
PPT 2-11
Variety and Assortment of Bicycles
PPT 2-12
Types of Retailers
PPT 2-13
Shopping Patterns by Types of Retail Outlets
Source: “Consumers Are Skeptical Again,” “63rd Annual Report of the Grocery Industry,” Progressive Grocer, April 1996, p.42.
PPT 2-14
Food Retailers
Convenience Stores
PPT 2-15
Types of Food Retailers
PPT 2-16
Issues in Food Retailing
Efficient
Distribution Lower Costs Lower Prices
PPT 2-17
Types of General Merchandise Retailers
• Discount Stores
• Specialty Stores
• Category Specialists
• Home Improvement Centers
• Department Stores
• Drugstores
• Off-Price retailers
• Value Retailers
PPT 2-18
Characteristics of General Merchandise Retailers
PPT 2-19
Issues in Discount Store Retailing
PPT 2-21
Category Specialists
PPT 2-22
Issues in Department Store Retailing
• Competition
-Discount Stores on Price
-Specialty Stores on Service, Depth of Assortment
PPT 2-23
Issues in Drug Store Retailing
PPT 2-24
Issues in Off-Price Retailing
• Opportunistic Buying
• Hurt By Sales in Department Stores
• Buying First Line Merchandise
PPT 2-25
Issues in Value Retailing
PPT 2-26
Summary
Many
Many New
New Typesofof
Types retailers,Increased
retailers, Increased
Diversity to Meet Diverse Needs
Diversity to Meet Diverse Needs
PPT 2-27
Non-store Retail Formats
Electronic Retailing
Direct Selling
Vending Machines
PPT 2-28
Types of Nonstore Retailers
PPT 2-29
Sales by Non-store Format
2005
PPT 2-30
Issues in Catalog Retailing
PPT 2-31
Services 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 Management
PPT 2-32
Examples of Service Retailers
Type of Service Service Retail Firms
PPT 2-33
Examples of Service Retailers
Type of Service Service Retail Firms
PPT 2-34
Merchandise/Service Continuum
PPT 2-35
Types of Retail Ownership
• Corporate Chains
• Franchises
PPT 2-36
Trends in Ownership
PPT 2-37
Franchising
PPT 2-38
Reasons for Franchising Growth
Technological advances
Demographic expansion
Product/service consistency
PPT 2-39
Types of Franchise Systems
Territorial
Operating
Mobile
Distributorship
Co-ownership
Co-management
Leasing/Licensing
Manufacturing
Service
PPT 2-40
Reasons for Franchising Failure
Inept management
Fraudulent activities
Market saturation
PPT 2-41
Franchisor Positions in the Marketing Channel
Manufacturer - retailer
Manufacturer - wholesaler
Wholesaler - retailer
PPT 2-42
Franchisor Benefits
Continuous market
Market information
Money
Royalty fees
Sales of products
License fees
Management fees
PPT 2-43
Franchisee Benefits
Initial Services
Market survey and site selection, facility design
and layout, lease negotiation advice, financing
advice, operating manuals, management training
programs, and employee training.
Continuous Services
Field 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.
PPT 2-44
Franchisor Advantages/Disadvantages
Advantages
Rapid expansion, highly motivated franchisees
do a good job, additional profits by selling
franchisees products and services.
Disadvantages
Company-owned units may be more profitable,
less control then independent retailers over
advertising, pricing, personnel practices, etc.
PPT 2-45
Franchisee Advantages/Disadvantages
Advantages
Established/proven product/service, business
and technical assistance, and reduction in risk.
Disadvantages
Loss 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.
PPT 2-46
Franchising Trends for the New Millennium
Sustained growth
International expansion
Increasing tensions
PPT 2-47
Theories of Retail Institution Change
CYCLICAL THEORIES
Wheel of retailing (price/service)
Accordion Theory (assortment)
EVOLUTIONARY THEORIES
Dialectic process (retailer)
Natural selection (customer)
PPT 2-48
Wheel of Retailing
PPT 2-49
The Dialectic Process
THESIS
Department store
High margin
Low turnover SYNTHESIS
High price Discount department
Full service store
Downtown location
Plush facilities Average margins
Average turnover
Moderate prices
ANTITHESIS Limited services
Discount store Suburban locations
Modest facilities
Low margin
High turnover
Low price
Self-service Source: Reprinted with the permission of
Macmillan College Publishing Company from
Low rent location Retailing, 4th Edition, by Dale M. Lewison.
Spartan facilities Copyright © 1991 by Macmillan
College Publishing Company, Inc.
PPT 2-50