Retail management levy weitz 8th edition

We have thousands of online textbooks and course materials mostly in PDF that you can download immediately after purchase. Retailing is a high-tech, global, growth industry that plays a vital economic role in society. The 8th edition maintains the basic philosophy of previous editions while focusing on key strategic issues with an emphasis on financial considerations and implementation through merchandise and store management.

These strategic and tactical issues are examined for a broad spectrum of retailers, both large and small, domestic and international, selling merchandise and services. You can share your ebook free to your friends. Happy you, happy us! Assortment is the number of different items in a merchandise category. Each different item of merchandise is called a SKU stock keeping unit. See PPT Ask students to give examples of local retailers with low variety and high assortment, with high variety and low assortment.

What benefits does high variety offer to customers? What is the benefit of high assortment? Ask student to give an example of an SKU. Chapter 02 - Types of Retailers retailers to provide some services-- accepting personal checks, displaying merchandise, providing parking, and being open long and convenient hours. Discuss the type of customer that would shop in each store.

How do these customers differ and what types of services would these customers expect? When a retailer offers many SKUs, inventory investment increases because the retailer must have back-up stock for each SKU. See example in PPT for illustration Customers like wide variety, deep assortments, and a lot of service, though some customers appreciate having the retailer edit the assortment for them. Why don't discount stores offer more services? They appeal to a target segment that does not want to pay the cost for more service options.

PPT shows a comparison of sales and growth rates in various retail sectors II. Now conventional supermarkets account for only 56 percent of food sales. At the same time, traditional food retailers carry many nonfood items. What are the pros and cons of these different food retailer formats? See PPT Ask students to consider the retail mixes of the major supermarkets in the area surrounding campus. Which compete on price? On merchandise? On service?

A combination? Supercenters are attracting customers with their broader assortments and general merchandise at attractive prices. Full-line discount chains and extreme value retailers are increasing the amount of shelf space they devote to consumables. Alternatively, why would they shop for food at supercenters, warehouse clubs or convenience stores? Based on these discussions, will conventional supermarkets be driven out of business by competing formats?

See PPT for coverage of Trends. Chapter 02 - Types of Retailers deli and bakery departments , targeting health conscious and ethnic consumers, providing a better in-store experience, and offering more private-label brands. Fair trade means purchasing from factories that pay workers a living wage, well more than the prevailing minimum wage, and offer other benefits like onsite medical treatment. Private- label brands benefit both customers and retailers. Branding strategies are covered in depth in Chapter At , to , square foot these stores offer a wide variety of food and non-food merchandise.

See PPT for an illustration of the characteristics of supercenters and warehouse clubs. The supercenter is one of the fastest growing retail formats. Why is the supercenter more attractive than a hypermarket in the U. What are benefits to consumers 5. They typically stock fewer SKUs than supercenters. Located in large, warehouse-type structures with large parking facilities, hypermarkets typically carry a larger selection of food items than supercenters with a focus on perishables.

What are the disadvantages? Where do students fall on the debate over the proliferation of supersize stores? Have any of their hometowns faced a battle over the building of a Wal-Mart or other supercenter? Ask students why they believe feelings run so deep on this particular retailing issue.

Ask students to give local examples of warehouse clubs. What is the target market for warehouse clubs? Consumers with larger families and small businesses. They reduce inventory holding costs by carrying a limited assortment of fast-selling items and buying merchandise opportunistically. Are warehouse clubs wholesalers or retailers? When they sell to small businesses they are wholesalers.

When they sell to individual members for personal or household use, they are retailers. Which products do they tend to buy most often at convenience stores? In general, what is so "convenient" about convenience stores? Chapter 02 - Types of Retailers work. Others are exploring the use of technology to increase shopping convenience such as self-service kiosks.

See PPT , , Ask students to give examples of local department stores. Why do customers go to department stores? Ask students to give local examples of specialty stores. What are the differences between specialty stores, department stores, and discount stores?

Where do students buy business suits, dresses, jeans, computers, electronics? Why do they go to that type of store? Which department store tier do students prefer? Which tier do they shop most often? Discuss differences in these responses. They offer both private and national brands. Discuss the target markets of the three largest full- line discount store chains Wal-Mart, Target and Kmart. How will the category specialists Toys R Us affect the retail strategy of full-line discount store chains?

What about Internet only retailers? In general, what are the factors that contribute to the success of discount stores despite increasing competition from other formats? Specialty stores tailor their retail strategy toward a very specific market segment. One specialty retailer, Hot Topics, focuses on selling licensed, music- inspired apparel to teenagers in mall-based stores. Ask students what retail strategy elements must be in place for a retailer like Hot Topics to remain successful.

Which of these stores have they visited? Ask which target market s this concept is 9. Chapter 02 - Types of Retailers offering new, fresh merchandise times per week. Pharmaceuticals often represent 50 percent of drugstore sales and an even greater percentage of their profits. Prescription pharmaceutical margins are shrinking due to governmental health care policies and HMOs. Also, drugstore retailers are encouraging pharmacists to take the time to provide personalized service.

See PPT Ask students if they have shopped online for drugstore products. What has been their experience? Do they think the Internet is a viable channel for drugstore merchandise? These retailers predominantly use a self-service approach, but they offer assistance to customers in some areas of the store.

How are they similar to specialty stores? Discuss the differences and similarities with discount stores. Chapter 02 - Types of Retailers category of merchandise, they can use their buying power to negotiate low prices, and assured supply when items are scarce. A home improvement center is a category specialist offering equipment and material used by do-it-yourselfers and contractors to make home improvements.

Office Depot; Home Depot vs. Direct competition focuses on price, resulting in reduced profits because the competitors have difficulty differentiating themselves on other elements of the retail mix. Ask students to describe an experience at a home improvement center such as Home Depot in terms of merchandise, atmosphere and salesperson service. Ask students to name the extreme value retailers in the local marketplace.

How many have shopped at one of them? For what types of merchandise? What is the primary appeal of these retailers? Chapter 02 - Types of Retailers maintain very low prices. Rather, the names imply a good value but do not limit prices to the arbitrary dollar price point. Most merchandise is bought opportunistically from manufacturers or other retailers with excess inventory at the end of the season.

The merchandise may be in odd sizes or unpopular colors or styles, or it may be irregulars, merchandise that has minor mistakes in construction. Off-price retailers can buy at low prices because they don't ask suppliers for advertising allowances, return privileges, markdown adjustments, or delayed payments.

What do consumers like about off- price retailers? What don't they like? See PPT for a summary of the issues facing off-price retailers Ask students which type of off-price retailer offers consumers truly the best value? Chapter 02 - Types of Retailers customers can't be confident that the same type of merchandise will be in stock each time they visit the store.

Outlet stores also allow manufacturers some control over where their branded merchandise is sold at discount prices. PPT 1. Services are performances or actions rather than objects. It is difficult for customers to evaluate services before they buy them, or even after they buy and consume them.

Services retailers often use tangible symbols to inform customers about the quality of their services. To evaluate the quality of their offering, services retailers place emphasis on soliciting customer evaluations and Ask students how customers can evaluate the quality of an intangible service offering.

What problems does intangibility cause for the services retailer? Chapter 02 - Types of Retailers complaints. The simultaneity of production and consumption creates some special problems for services retailers. While customers can return damaged merchandise to a store, customers that are dissatisfied with services have limited recourse. Thus it is critical for services retailers to get it right the first time. What problems does simultaneous production cause for the services retailer?

They can't be saved, stored, or resold. This is in contrast to merchandise, which can be held in inventory until a customer is ready to buy it.

Thus, services retailers often have times when their services are underutilized and other times when they have to turn customers away because they cannot accommodate them. Give examples of retailers for which perishability is a real problem? What actions have students seen services retailer take to make waiting time more enjoyable for customers? They also attempt to make customer waiting time more enjoyable.

Because services are performed by people, no two services will be identical. What problems does inconsistency cause for the services retailer? Are there services retailers whose inconsistency is acceptable? The major classifications of retail ownership are: 1 independent, single-store establishments, 2 corporate chains, and 3 franchises.

See PPT A wholesale-sponsored voluntary cooperative group is an organization operated by a wholesaler offering a merchandising program to small, independent retailers on a voluntary basis. Ask students to give examples of local independent, single-store retailers. Do they shop at independents? Why or why not? Do students believe national chains will drive all independents out of business? Chapter 02 - Types of Retailers B. Wal-Mart has pursued a strategy of opening stores on the outskirts of small rural towns with populations between 25, and 50, These stores offer broader selection of merchandise at much lower prices than previously available from local retailers.

Discuss the pros and cons of this strategy in class. What ramifications may result? Monopolizing market, demise of small stores, potential to become major employer in rural area. The franchisee also agrees to operate the outlet as per the procedures prescribed by the franchisor.

Ask students to give examples of local franchises. If they wanted to own a retail business, would they want a franchise or their own store?

What are the advantages of being a franchisee? PPT provides a brief introduction to the Franchising form of retail ownership. Traditional institutions have been joined by category specialists, hypermarkets and superstores, extreme value retailers, and nonstore retailers among others.

Chapter 02 - Types of Retailers IX. It might be as informal as walking through a competitor's store and looking around. However, a structured analysis is more helpful in developing a retail offering that will attract consumers from a competitor's store. For an exercise on comparison shopping see Ancillary Exercise Breaking the class into groups and having each group do a comparison shopping exercise is a good way to get students to understand the difference between retailers and the types of decisions retail manager make.

Have each group compare different institutions selling the same merchandise category. For example, men's suits in a department store and men's specialty store, athletic shoes in a discount store and specialty shoe store, CD's in a discount store and a specialty music store. Analyze their variety and assortment of athletic footwear by creating a table similar to that in Exhibit 2—2. Students should be able to fill in this type of table and explain their findings. How did each retailer meet your shopping needs?

Get your parents to do the same thing. Tabulate your results by type of retailer. Are your shopping habits significantly different or are they similar to those of your parents?

Students should keep a list of places shopped. Results can be compared to a parent or another classmate. Thais assignment should give student insight to their own consumer buying behavior and how they select merchandise and retail formats. If any of these categories of merchandise are missing, explain how this could be a potential opportunity for growth for this supermarket.

Responses here will vary. Some stores have big commitment to organic, locally grown, ethnic and private label merchandise. Bureau of the Census Internet site at www. Which categories of retailers have the largest percentage of sales in the fourth quarter the holiday season? Students will notice that many retail categories generate their largest percentage of sales in the fourth quarter.

How many of these retailers in the Top Ten have you patronized as a customer? Did you know that they were operated as a franchise? Look at the list for previous years to see changes in the rankings.

Click on the link, About the Franchise , and describe what factors were used to develop the list. Finally, what is the nature of the business that seems to lend itself to franchising?

Students should uncover some notable changes in the Top Perhaps most significant, Subway has been moved into the number 2 spot after many years at number 1. What do students believe are behind the reinvigoration of these fast food franchise retailers? Will they be able to maintain these positions in the face of changing trends in consumer lifestyles and food retailing? The web site notes that the list of the Top franchises is based on quantifiable measures such as financial strength and stability, growth rate, size of the system, and number of years in business.

Students will likely notice that service-based retailers tend to lend themselves best to the franchise system, particularly those services that allow for standardization of business practices and retail operating formats.

This retailer sells domestics bed linens, bathroom and kitchen items and home furnishings cookware and cutlery, small household appliances, picture frames, and organizing supplies. Distinguish between variety and assortment. Why are these important elements of retail market structure?

The main difference between variety and assortment is that variety refers to the number of different merchandise categories a retailer sells, whereas assortment is the number of different items or SKUs in a merchandise category. In addition, variety is often referred to as the breadth of merchandise carried by the retailer, and assortment is referred to as the depth of merchandise. These elements form an integral part of the retail market structure, since it is the retail offering that ultimately distinguishes one retailer from another.

Choose a small, independent retailer and explain how it can compete against a large national chain. It is very difficult for independents to compete against chains on price. Corporate chains can buy merchandise at lower cost because they buy in large quantities. Thus, they can offer the same merchandise at lower prices than independents. However, chains also tend to have the same merchandise in all stores. Thus independents can compete effectively against chains by offering merchandise that is tailored to the needs of the local community.

In addition, chains are often very bureaucratic. They have a lot of rules, which constrain the nature of the service that can be provided to customers.

In addition, store managers in chains often move from store to store or they are promoted to higher-level management positions. Therefore, they have less opportunity to develop long-term relationships with customers. Chapter 02 - Types of Retailers Independents can compete by offering better service—by developing personal relationships with local customers. What do off-price retailers need to do to compete against other formats in the future? The main competitive weapon for the off-price retailers is their low price.

While they may not directly compete with higher service formats, such as department and specialty stores, they do face increasing competition from discount stores. Here, the off-price stores may be at a relative disadvantage since their merchandise is based upon opportunistic buying, while discount stores offer a relatively stable mix of merchandise at stable prices everyday low pricing. Since the option of improving service may increase costs and weaken their only source of competitive advantage, low price, off-price retailers should focus on strategies to keep their costs and prices low and explore low cost methods of attracting and retaining customers.

In terms of keeping operational costs low, they can locate in lower cost urban and rural areas note that outlet stores are more clustered within outlet malls located farther from the city but near major highways. They can also implement more efficient inventory and merchandise management systems note that for a discount store, such as Wal-Mart, operational efficiency and costs reductions are crucial to offering lower prices to customers. Also, they can expand their sourcing to include imports from low cost international markets.

Another threat for off-price retailers may be from Internet stores. Often several stores publicize their low prices and also attempt to match consumer price preferences through reverse bidding and auctions sites such as Priceline and eBay.

Off-price retailers can explore the possibility of using the Internet for relatively low cost advertising about current merchandises since their merchandise stocks fluctuate more rapidly due to opportunistic buying. Factory outlet stores, on the other hand, can compete more directly over the Internet.

Compare and contrast the retail mixes of convenience stores, traditional supermarkets, superstores, and warehouse stores. Can all of these food retail institutions survive over the long run?

Chapter 02 - Types of Retailers Element of Retail Mix Convenience Store Traditional Supermarket Superstore Warehouse Store Location Typically freestanding, easily accessible sites Typically in strip shopping centers Typically in strip shopping centers Typically in strip shopping centers Merchandise Assortment Limited variety and assortment Average variety and assortment Greater variety with deeper assortment than supermarket Greater variety with about the same assortment as supermarket.

Primary difference is that merchandise assortment varies because of opportunistic buying. Pricing Higher pricing than supermarkets Average pricing. Some chains have constant every day pricing and others have special sale high-low pricing.

Lower pricing than supermarkets. Typical every day pricing. Pricing depends on cost of merchandise bought on special buys. Advertising and Promotion Personal selling Limited advertising, frequent shopper programs tied to gasoline sales. Minimal High-low pricing chains advertise weekly specials. Minimal Limited advertising since most have everyday pricing. Minimal Minimal promotion since all merchandise is basically on sale.

Minimal Store design and display Designed for quick and easy merchandise selection and checkout Typically use a grid- iron with cross-hatch aisles, extensive signs. Same as supermarket. A bit more disorganized to give the customers the feel of searching for a bargain. Service Minimal Some services for produce, bakery, meat and fish categories. Some services for produce, bakery, meat and fish areas. Minimal All four types will persist because they appeal to different customer needs.

The warehouse stores typically have larger pack sizes that are very attractive to customers with large families and to small business owners like local restaurants. In addition, due to the varying assortments, customers who are brand loyal might not want to shop in these stores.

These retailers offer easy in and out access and speedy transactions. In response to competitive pressures from other food retailers, as well as dependency on gasoline sales, many convenience stores are now offering consumers fresh food and healthy fast food choices to reduce dependency on fuel sales while maintaining on-the-go ease and convenience.

Chapter 02 - Types of Retailers The superstores are low in price but more inconvenient to shop in because of the large size. Thus they appeal to customers who are very price conscious and are willing to drive a longer distance and spend more time shopping in a larger store. Conventional supermarkets are the most convenient.

They also provide more services for customers such as cutting meat to order. Conventional supermarkets appeal to customers who value service and convenience and are not as price conscious. Note that the same consumer may shop at all four types of food retailers depending on the nature of the shopping trip. For example, a consumer might stock up on basic such as toilet paper, soft drinks, and can goods at a warehouse or superstore and then go to a supermarket to buy meat, produce, and gourmet food.

Could a large discounter, such as Target or Walmart, enter another retail format such as convenience stores or department stores in the future? Would they be successful with either strategy? Explain why or why not. Both Target and Walmart have had success entering other store formats. Target is offering more supermarket items and Walmart has food stores and warehouse stores. Based on these experiences it could be possible for theses discounters to enter other formats. Department stores may be more problematic because there has been considerable industry consolidation in this category.

There are already three tiers in the department store category, therefore there is already high competition. Why are retailers in the limited assortment supermarket and extreme value discount store sectors growing so rapidly?

Both limited assortment supermarkets and extreme value discount stores focus on relatively limited merchandise offerings at highly appealing low! The retail formats are able to offer their extremely low prices through maximizing efficiency.

The same brand and model of a personal computer is sold by specialty computer stores, discount stores, category specialists, online retailers and warehouse stores. Why would a customer choose one retail format over the others?

Each type of retail store provides a unique combination of price and services tailored to the needs of different types of customers. The specialty store typically will have higher prices, but will offer more services.

It will have salespeople with technical expertise available to provide information to customers and answer questions. This service is particularly valuable to customers who do not know much about computers.

Chapter 02 - Types of Retailers On the other hand, discount stores, category specialists, and warehouse stores have lower prices and do not offer much personalized service. These stores are more attractive to customers who have more expertise and do not need personalized service.

Due to the greater assortment in category specialists, customers are able to compare the prices and features of different brands in one store visit. Warehouse and discount stores have limited assortments and thus customers can only see a limited set of brands and models. But they can also buy merchandise in different product categories at the same time they are buying a computer. Some customers will prefer the convenience and selection offered online.

The Internet may also be used to collect information and compare features and prices prior to shopping in a store location. Choose a product category that both you and your parents purchase e. In which type of store do you typically purchase this merchandise?

What about your parents? Explain why there is and is not a difference in your store choices. If price is a major factor, there may be some similarities between the students and their parents; both may shop at discount stores. The merchandise, service and prices for the various retail formats stocking different product categories are different. In general, stores deliberately targeting a younger population will be favored by students since these stores would better match their expectations of merchandise such as fashion clothing , prices and services students may consider themselves savvy customers for certain products, such as music and electronic equipment, and may not need the type of service demanded by their parents for instance in purchasing business clothing.

At many optical stores you can get your eyes checked and purchase glasses or contact lenses. How is the shopping experience different for the service as compared to the product? Design a strategy designed to get customers to purchase both the service and the product.

In so doing, delineate specific actions that should be taken to acquire and retain optical customers. Optical stores present an interesting mix of service and related merchandise. On one hand, the eye examination is usually done by a trained and licensed eye doctor and here the service experience is often very professional and similar to a visit to any physician or hospital.

On the other hand, the glasses or contact lenses are displayed in a retail store setting with the service being mostly oriented towards helping the customer try out various options. The contrasts between the service and retail environments may be unnerving for some customers.

Chapter 02 - Types of Retailers One strategy to reduce the gap is to ensure that the retail setting is very professional and courteous. Since the problem has been detected and identified by the eye doctor, the sales staff in the retail setting could engage and interact more directly with the customer with more of a problem-solving approach. It must also be recognized that most customers who are prescribed glasses for the first time are likely to continue wearing glasses or contact lenses for the rest of their lives.

Thus, it is important to start building consumer trust and confidence through professional service and expertise. One strategy would be to encourage customers to return for an eye examination every year and also have their current prescription for the glasses or lenses checked. Another is to provide free repair service for the frames. Many experts believe that customer service is one of retailers' most important issues in the new millennium. How can retailers that emphasize low price such as discount stores, category specialists, and off-price retailers improve customer service without increasing costs and thus, prices?

It is very difficult to offer high-quality, personalized customer service at a low cost, because personalized service is provided by people who have to be paid more. Price-oriented retailers provide service by using signage to make it easy for customers to locate products, having many checkout counters so customers can pay for merchandise quickly, and using displays to demonstrate the use of merchandise and information about the merchandise.

These store layout and display activities do not require people, but they make it easier for customers to buy merchandise. Personalized service from employees can be provided economically by having a centralized place in the store where experts are available to answer questions.

Rather than have a lot of employees circulating throughout the store, a smaller number of employees can be in one central location. However, customers will have to come to the service providers rather than the service providers going to the customers.