Levy, M., Weitz, B. A.: Retailing Management
Introduction to the world retailing
Retailing is a very important part of global, high-tech business. Because the very large retails are often multinational (or at least divided to really large area), i.e. Wall-Mart, 7-Eleven, Tesco stores …, they have to use very sophisticated communication and information systems to manage their business.
Retailing provides considerable value to consumers while giving people opportunities for rewarding and challenging careers. Retailing industry has to change really quickly because of changes of costumers’ needs and the technology.
If retailing is successful, it means it is offering the right product, at the right price, in the right place, at the right time, and making the profit. To make this all happen, retailers have to understand what the costumers want and what the competitors are offering in the same time (both for the present time and for the longest future able to predict).
Retail managers have many responsibilities. They have to make complex decisions in selecting target markets and retail locations, determining what merchandise and services to offer, negotiating with suppliers and distributing merchandise to stores, training and motivating the sales associates, and deciding how to price, promote, and present merchandise.
1 What is retailing?
Retailing means “a set of business activities that adds value to the products and services sold to costumers for their personal or family use”. It involves sale of products in stores, but also the sale of services.
1 Retailer’s role in distribution channel
Retailers are the final part of the whole distribution channel. A distribution channel is a set of companies that help get the product from the place of made to the final costumer. If one company more than one set of activities in the channel (manufacturing, wholesaling, retailing …), it means the company is vertical integrated.
2 Functions performed by retailers
1) Providing an assortment of products and services,
2) Breaking bulk,
3) Holding inventory,
4) Providing services,
5) Increasing the value of product and services.
3 Structure of retailing and distribution channels around the world
1) U.S. distribution system – large retail firms mostly, 2) Japanese distribution system – many small stores and many relatively small firms, 3) European distribution system – between U.S. and Japanese.
2 Opportunities in retailing
1) Management opportunities – large possibility to learn and responsibilities in many different areas of management. 2) Entrepreneurial opportunities
3 The retail management decision process
1 Understanding the world of retailing
Retail managers must understand the environment, costumers and competition to develop and implement really effective strategy. Critical environmental factors are: ▪ macroenvironment – technological, social, ethical, legal, political factors, ▪ microenvironment – retailer’s competitors and costumers.
2 Developing the retail strategy
The retail strategy “indicates how the firm plans to focus the sources to accomplish its objectives”. It identifies: ▪ the target market,
▪ the nature of merchandise,
▪ building a long term advantage over competitors.
3 Implementing the retail strategy
Managers have to develop a retail mix that satisfies the needs of its target market better than the competitors. “The retail mix is the combination of factors retailers use to satisfy costumer needs and influence their purchase decisions.”
▪ types of merchandise and services offered,
▪ merchandise pricing,
▪ advertising and promotional programs,
▪ store design,
▪ merchandise display,
▪ assistance to costumers provided by salespeople,
▪ convenience of store’s location....