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Chapter 16: Retailing and Digital Marketing - Coggle Diagram
Chapter 16: Retailing and Digital Marketing
How Price Affects Demand
Retailing
The activities involved in selling merchandise to consumers
Strategic Considerations for Retail Strategy
Customer service strategy
Choosing which services to offer and how much
to charge for them depends on
Store size, type, and location
Merchandise assortment
Services offered by competitors
Customer expectations
Financial resources
Pricing strategy
Retailers determine a pricing strategy based on
Type of product
Company objectives
Competitor pricing
Customer perceptions
Markup
The amount a retailer adds to a product’s cost to set the final selling price
Showrooming
When a customer examines and compares products at a
store, then buys the product through an online retailer
Merchandising strategy
To develop a successful merchandise mix, a retailer
must weigh a few priorities
The preferences and needs of its defined target market
The overall profitability of each product line and category
Location/distribution strategy
Planned shopping centers: A group of retail stores designed, coordinated, and marketed to shoppers in a geographic trade area
Promotional strategy
Decisions about the amount and type of
promotion are influenced by the target market
and other components of the retailer’s strategy
Best Buy uses many promotional techniques
Commercials
Banner ads on websites
Weekly circulars
In-store promotions
Store atmospherics
The exterior of a store
Identifies the retailer
Attracts its target shoppers
The interior of a store should
Induce shoppers to buy
Complement the retailer’s image
Respond to customers’ interests
Components Retailing Strategy
Pricing strategy
Prices reflect a retailer’s marketing objectives and policies
Customer service strategy
Some stores offer no-frills shopping
Location/Distribution strategy
Location can be a determining factor in the
success or failure of a retail business
Promotional strategy
Retailers use promotional techniques to entice more
shoppers
Merchandising strategy
Guides a retailer’s decisions regarding the items it
will offer.
Atmospherics
The physical characteristics and amenities that attract
customers and satisfy their shopping needs
Categorizing Retailers
Shopping effort
This classification is based on the reasons
consumers shop at a particular retailer
Shopping stores
Stores where consumers compare prices, assortments, and quality levels before making purchase decisions
Specialty retailers
Stores that combine carefully defined product lines, services, and
reputations in attempts to persuade consumers to expend considerable effort to shop at their stores
Convenience retailers
Stores that appeal to customers by having accessible locations,
extended store hours, rapid checkout service, and adequate parking
Services provided
This classification differentiates retailers
by the services they provide
Forms of ownership
The easiest way to categorize retailers
may be by ownership structure
Chain stores
Independent retailers
Product line:
General-merchandise retailers
Stores that carry a wide variety of product lines stocked
in some depth and distinguish themselves from specialty retailers by the large number of product lines they carry
Supermarkets
Stores that sell mainly groceries, but also a wide selection of
items in other categories
Specialty stores
Focus on a single product category but stock it in considerable
depth or variety
Department Store
A series of specialty stores under one roof
Direct Marketing and Nonstore Retailing
Direct marketing
A broad concept that includes direct mail,
direct selling, online retailing, direct-response
retailing, and automatic merchandising
Direct mail
A type of direct marketing that comes in many forms
Direct selling
Manufacturers bypass retailers and wholesalers, setting up
their own channels to sell their products directly to consumers
Online retailing
Online retailers sell directly to consumers using
e-commerce stores
Direct-response retailing
A hybrid of physical retail, online retail, and direct
mail promotion
Automatic merchandising
Determining an Effective Retail Strategy
for Manufacturers