Chapter 1

An
Introduction
to Retailing RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH,
10th Edition

BERMAN EVANS
 Chapter Objectives
 To define retailing, consider it from different
perspectives, demonstrate its impact, and note
its special characteristics
 To introduce the concept of strategic planning
and apply it
 To show why the retailing concept is the
foundation of a successful business, with an
emphasis on the total retail experience,
customer service, and relationship retailing
 To indicate the focus and format of the text

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 Retailing

Retailing encompasses the business

activities involved in selling goods and
services to consumers for their personal,
family, or household use. It includes every
sale to the final consumer.

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 Issues in Retailing

How can we best serve our customers

while earning a fair profit?
How can we stand out in a highly
competitive environment where consumers
have so many choices?
How can we grow our business, while
retaining a core of loyal customers?

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 The Philosophy

Retailers can best address these questions

by fully understanding and applying the
basic principles of retailing, as well as the
elements in a well-structured, systematic,
and focused retail strategy.

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 Figure 1-1: Boom Times
for Lowe’s

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 An Ideal Candidate for a
Retailing Career
Be a people person (human being)
Be flexible
Be decisive
Have analytical skills
Have stamina (Patient)

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 Table 1-1: The 10 Largest
Retailers in the United States
Rank Company Main Emphasis
1 Wal-Mart Full-line discount stores, supercenters, membership
clubs
2 Home Depot Home centers, design centers
3 Kroger Supermarkets, convenience stores, jewelry stores
4 Target Full-line discount stores, supercenters
5 Costco Membership clubs
6 Albertson’s Supermarkets, drugstores
7 Walgreens Drugstores
8 Lowe’s Home centers
9 Sears Department stores, specialty stores
10 Safeway Supermarkets

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 Figure 1-4: A Typical Channel
of Distribution

Manufacturer
Retailer

Final
Wholesaler
Consumer

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 Figure 1-5: The Retailer’s Role in
the Sorting Process

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 Multi-Channel Retailing
A retailer sells to consumers through
multiple retail formats
Web sites
Physical stores

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 Distribution Types
• Exclusive: suppliers make agreements with one or few
retailers that designate the latter as the only ones in a
specified geographic area to carry certain brands or products
• Intensive: suppliers sell through as many retailers as possible
• Selective: suppliers sell through a moderate number of
retailers
Number of intermediaries: Exclusive distribution involves selecting only a limited number of intermediaries to
carry the product exclusively, while selective distribution involves selecting a limited number of
intermediaries to carry the product.
Control over distribution: Exclusive distribution provides the manufacturer with complete control over the
distribution channels, while selective distribution provides some level of control over the distribution
channels but not complete control.
Product availability: Exclusive distribution restricts the availability of the product to only authorized channels,
while selective distribution makes the product available through a limited number of authorized
channels.

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 Figure 1-7: Comparing
Distribution Types

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 Figure 1-8: Special Characteristics
Affecting Retailers
Small
Impulse
Average
Purchase
Sale

Retailer’s
Strategy

Popularity
Of Stores
Through location…

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 Six Steps in Strategic Planning
1. Define the type of business in term of goods or services
(Full service or no frills)
2. Set long-run and short-run objectives (Sales ,market share
and profits)
3. Determine the customer market on the basis of
characteristics
4. Devise an overall, long-run plan gives general direction to
firm and employees
5. Implement an integrated strategy that combine such
factors ,location, product assortment ,pricing, advertising,
and displays. to achieve objectives
6. Evaluate and correct
A retail strategy is the overall plan guiding a retail firm. It influences the firm’s
business activities and its response to market forces, such as competition
and the economy.

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 Figure 1-9: “Pay Less + Export
More” at Target

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 Aspects of Target’s Strategy

 Growth objectives (Market  Employee relations

share ,Profit)  Innovation (creating
 Appeal to a prime mark (the unique ways to delight
class of target customer) customers)
 Distinctive image  Commitment to
technology
 Focus (delight customers
 Community involvement
while increase investment )
 Monitoring performance
 Customer service
 Multiple points of contact
( through advertising,
stores in different
places ,open 7days,…

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 Figure 1-10: Applying the
Retailing Concept
Customer Orientation
Satisfying needs &wants

Coordinated Effort
Maximizing efficiency Retailing Retail
Concept Strategy
Value Driven
Adding Benefits

Goal Orientation
Setting goals

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 Customer Service

• Activities undertaken by a retailer in

conjunction with the basic goods and
services it sells
Store hours
Parking
Shopper-friendliness
Credit acceptance
Salespeople

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 Figure 1-12: A Customer
Respect Checklist
 Do we trust our customers?
 Do we stand behind what we sell?
 Is keeping commitments to customers
important to our company?
 Do we value customer time?
 Do we communicate with customers
respectfully?
 Do we treat all customers with respect?
 Do we thank customers for their business?
 Do we respect employees?

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 Relationship Retailing

• Seek to establish and maintain long-term bonds

with customers, rather than act as if each sales
transaction is a completely new encounter
– Concentrate on the total retail experience
includes all the elements in a retail offering that
encourage consumer during their contact with
retailer ,no. of sales people parking
– Monitor satisfaction
– Stay in touch with customers

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 Effective Relationship Retailing

• Use a win-win approach

– It is harder to get new customers than to
keep existing ones happy
• Develop a customer database
– Ongoing customer contact is improved
with information on people’s attributes
and shopping behavior

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