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Short One Line Answers in Retailing

FACULTY: Dr.AMIT MITTAL


CLASS: PGDBM III SEMESTER

1. What is a store atmosphere

Refers to a store's physical characteristics that are used to develop an image and draw
customers.

2. What are Ancillary Customer Services

Extra elements that enhance a retail strategy mix. They do not have to be provided.

3. What is an Assortment Display

An interior display in which a retailer exhibits a wide range of merchandise for the
customer. It may be open or closed.

4. What is an Automatic Reordering System

Orders merchandise when stock-on-hand reaches a pre-determined reorder point. An


automatic reorder can be generated by a computer on the basis of a perpetual
inventory system and reorder point calculations

5. What is Bait Advertising

An illegal practice whereby a retailer lures a customer by advertising goods and


services at exceptionally low prices; then, once the customer contacts the retailer, he
or she is told the good/service of interest is out of stock or of inferior quality. A
salesperson tries to convince the customer to purchase a better, more expensive
substitute that is available. The retailer has no intention of selling the advertised item.

6. What is a Balanced Tenancy

Occurs when stores in a planned shopping center complement each other in the
quality and variety of their product offerings. The kind and number of stores are
linked to the overall needs of the surrounding population.

7. What is the Basic Stock Method

An inventory-level planning tool wherein a retailer carries more items than it expects
to sell over a specified period:

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8. What do you mean by ‘Battle of the Brands’

When retailers and manufacturers compete for shelf space allocated to various brands
and for control over display locations.

9. What is Benchmarking in retailing

Occurs when the retailer sets its own standards and measures performance based on
the achievements of its sector of retailing, specific competitors, high-performance
firms, and/or the prior actions of the company itself.

10. What is Bottom-Up Space Management Approach

Exists when planning starts at the individual product level and then proceeds to the
category, total store, and overall company levels.

11. What is a Box (Limited-Line) Store

A food-based discounter that focuses on a small selection of items, moderate hours of


operation (compared to supermarkets), few services, and limited national brands.

12. What is a Category Killer Store

An especially large specialty store featuring an enormous selection in its product


category and relatively low prices. It draws consumers from wide geographic areas.

13. What is Category Management

A relationship-oriented technique that some firms, especially supermarkets, are


beginning to use to improve shelf-space productivity.

14. What is a Central Business District (CBD)

The hub of retailing in a city. It is the largest shopping area in that city and is
synonymous with the term "downtown." The CBD exists where there is the greatest
concentration of office buildings and retail stores.

15. What is a Centralized Buying Organization

Occurs when a retailer has all purchase decisions emanating from one office.

16. What is a Chain

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Multiple retail units under common ownership that engage in some level of
centralized (or coordinated) purchasing and decision making.

17. What is Channel Control

Occurs when one member of a distribution channel can dominate the decisions made
in that channel by the power it possesses.

18. What is Cognitive Dissonance

Doubt that occurs after a purchase is made, which can be alleviated by customer after-
care, money-back guarantees, and realistic sales presentations and advertising
campaigns.

19. What is Data-Base Retailing

A way of collecting, storing, and using relevant information on customers.

20. What is Data Warehousing

A new advance in data-base management whereby copies of all the data bases in a
company are maintained in one location and can be assessed by employees at any
locale.

21. What is a Dead Area

Awkward spaces where normal displays cannot be set up.

22. What is a Department Store

A large retail unit with an extensive assortment (width and depth) of goods and
services that is organized into separate departments for purposes of buying,
promotion, customer service, and control.

23. What is the Depth of Assortment

Refers to the variety in any one goods/service category with which a retailer is
involved.

24. What is a Destination Store

A retailer to whom consumers will make a special shopping trip. The destination may
be a store, a catalog, or a Web site.

or

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A retail outlet with a trading area much larger than that of a competitor with a less
unique appeal to customers. It offers a better merchandise assortment in its product
category(ies), promotes more extensively, and creates a stronger image.

25. What is Direct Marketing

A form of retailing in which a customer is first exposed to a good or service through a


non-personal medium and then orders by mail or phone -- sometimes, by computer.

26. What is Efficient Consumer Response (ECR)

A form of logistics management through which supermarkets are incorporating


aspects of quick response inventory planning, electronic data interchange, and
logistics planning.

27. What is Electronic Article Surveillance(EAS)

Involves attaching specially designed tags or labels to products.

28. What is Electronic Data Interchange (EDI)

Lets retailers and suppliers regularly exchange information through their computers
with regard to inventory levels, delivery times, unit sales, and so on, of particular
items.

29. What is an Electronic Point-of-Sale System

Performs all tasks of a computerized checkout and also verifies check and charge
transactions, provides instantaneous sales reports, monitors and changes prices, sends
intra- and interstore messages, evaluates personnel and profitability, and stores data.

30. What is an Ensemble Display

An interior display whereby coordinated merchandise is grouped and displayed


together.

31. What is Everyday Low Pricing (EDLP)

A version of customary pricing, whereby a retailer strives to sell its goods and
services at consistently low prices throughout the selling season.

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Short One Line Answers in Retailing (MM-306)

FACULTY: AMIT MITTAL

CLASS: MBA III SEMESTER

What is a Factory Outlet

A manufacturer-owned store selling that firm's closeouts, discontinued merchandise,


irregulars, canceled orders, and, sometimes, in-season, first-quality merchandise.

What is FLC-Family Life Cycle

Describes how a traditional family evolves from bachelorhood to children to solitary


retirement.

What is the FIFO Method

Logically assumes old merchandise is sold first, while newer items remain in inventory. It
matches inventory value with the current cost structure.

What is a Retailer’s Financial Leverage

A performance measure based on the relationship between a retailer's total assets and net
worth. It is equal to total assets divided by net worth.

What is Financial Merchandise Management

Occurs when a retailer specifies exactly which products are purchased, when products are
purchased, and how many products are purchased.

What is Fixed Pricing

Exists in situations where a branch of government has some degree of control and
retailers must conform to a stated price structure.

What is Flat Organization

A firm with many subordinates reporting to one supervisor.

What is Flea Market

Has many retail vendors offering a range of products at discount prices in plain
surroundings. Many flea markets are located in nontraditional sites not normally
associated with retailing. They may be indoor or outdoor.

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What is Flexible Pricing

A strategy that allows consumers to bargain over selling prices; those consumers who are
good at bargaining obtain lower prices than those who are not.

What is Floor-Ready Merchandise

Items that are received at the store in condition to be put directly on display without any
preparation by retail workers.

What is Food-Based Superstore

A retailer that is larger and more diversified than a conventional supermarket but usually
smaller and less diversified than a combination store. It caters to consumers' complete
grocery needs and offers them the ability to buy fill-in general merchandise.

What is a Formal Buying Organization

Views the merchandise-buying function as a distinct retail task; a separate department is


set up.

What is Franchising

Involves a contractual arrangement between a franchisor (a manufacturer, a wholesaler,


or a service sponsor) and a retail franchisee, which allows the franchisee to conduct a
given form of business under an established name and according to a given pattern of
business.

What is Fringe Trading Area

Includes the customers not found in primary and secondary trading areas. These are the
most widely dispersed customers.

What is Full-Line Discount Store

A type of department store characterized by (1) a broad merchandise assortment; (2)


centralized checkout service; (3) merchandise normally sold by self-service with minimal
assistance; (4) no catalog order service; (5) private-brand nondurable goods and well-
known manufacturer-brand durable goods; (6) hard goods accounting for a much greater
percentage of sales than at traditional department stores; (7) a relatively inexpensive
building, equipment, and fixtures; and (8) less emphasis on credit sales than in full-
service stores.

What is Functional Product Groupings

Categorize and display a store's merchandise by common end uses.

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What are Generic Brands

No-frills goods stocked by some retailers. These items usually receive secondary shelf
locations, have little or no promotion support, are sometimes of less overall quality than
other brands, are stocked in limited assortments, and have plain packages.

What is Geographic Information System (GIS)

Combine digitized mapping with key locational data to graphically depict such trading-
area characteristics as the demographics of the population, data on customer purchases,
and listings of current, proposed, and competitor locations.

What is Gross Margin Return on Investment (GMROI)

Shows the relationship between total dollar operating profits and the average inventory
investment (at cost) by combining profitability and sales-to-stock measures.

What is Horizontal Cooperative-Advertising Agreement

Enables two or more retailers (usually small, situated together, or franchisees of the same
company) to share an ad.

What is Horizontal Price Fixing

Involves agreements among manufacturers, among wholesalers, or among retailers to set


prices. This is, regardless of how "reasonable" resultant prices may be.

What is Huff's Law of Shopper Attraction

Delineates trading areas on the basis of the product assortment carried at various
shopping locations, travel times from the consumer's home to alternative shopping
locations, and the sensitivity of the kind of shopping to travel time.

What is Impulse Purchases

Occur when consumers purchase products and/or brands they had not planned on buying
before entering a store, reading a mail-order catalog, seeing a TV shopping show, tuning
to the World Wide Web, and so on.

What is an Independent

A retailer that owns only one retail unit.

What is an Inside Buying Organization

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Staffed by a retailer's own personnel; merchandise decisions are made by permanent
employees of the firm.

What is an Intensive Distribution strategy

Takes place when suppliers sell through as many retailers as possible. This arrangement
usually maximizes suppliers' sales; and it enables retailers to offer many brands and
product versions.

What is Inventory Shrinkage

Involves employee theft, customer shoplifting, and vendor fraud.

What is an Isolated Store

A freestanding retail outlet located on either a highway or a street. There are no adjacent
retailers with which this type of store shares traffic.

What is Leader Pricing

Occurs when a retailer advertises and sells selected items in its goods/service assortment
at less than usual profit margins. The goal is to increase customer traffic in the hope of
selling regularly priced goods and services in addition to the specially priced items.

What is a Leased Department

A department in a retail store -- usually a department, discount, or specialty store -- that is


rented to an outside party.

What is the LIFO Method

Assumes new merchandise is sold first, while older stock remains in inventory. It
matches current sales with the current cost structure.

What is Logistics The total process of moving goods from a manufacturer to a customer
in the most timely and cost-efficient manner possible.

Loss Leaders Items priced below cost to lure more customer traffic. Loss leaders are
restricted by state minimum-price laws.

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Short One Line Answers in Retailing (MM-306)
18-7-2007

Manufacturer (National) Brands Produced and controlled by manufacturers. They are


usually well known, supported by manufacturer ads, somewhat pre-sold to consumers,
require limited retailer investment, and often represent maximum product quality to
consumers.

Markdown A reduction from selling price to meet the lower price of another retailer,
adapt to inventory overstocking, clear out shopworn merchandise, reduce assortments of
odds and ends, and increase customer traffic.

Market Penetration A pricing strategy in which a retailer seeks to achieve large


revenues by setting low prices and selling a high unit volume.

Market-Segment Product Groupings Place various products appealing to a given target


market together.

Market Skimming A pricing strategy wherein a firm charges premium prices and attracts
customers less concerned with price than service, assortment, and status.

Markup The difference between merchandise costs and retail selling price.

Markup Pricing A form of cost-oriented pricing in which a retailer sets prices by adding
per-unit merchandise costs, operating expenses, and desired profit.

Marquee A sign used to display a store's name and/or logo.

Massed Promotion Effort Used by retailers that promote mostly in one or two seasons.

Mass Marketing Selling goods and services to a broad spectrum of consumers.

Mass Merchandising A positioning approach whereby retailers offer a discount or value-


oriented image, a wide and/or deep merchandise assortment, and large store facilities.

Mazur Plan Divides all retail activities into four functional areas: merchandising,
publicity, store management, and accounting and control.

Megamall An enormous planned shopping center with 1-million-plus square feet of retail
space, multiple anchor stores, up to several hundred specialty stores, food courts, and
entertainment facilities.

Membership Club Aims at price-conscious consumers, who must be members to shop.

Merchandise Buying and Handling Process Comprised of an integrated and systematic


sequence of steps from establishing a buying organization through regular re-evaluation.

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Merchandise Space The area where nondisplayed items are kept in stock or inventory.

Merchandising Consists of the activities involved in acquiring particular goods and/or


services and making them available at the places, times, and prices and in the quantity to
enable a retailer to reach its goals.

Micro-Merchandising A strategy whereby a firm adjusts shelf-space allocations to


respond to customer and other differences among local markets.

Model Stock Approach A method of determining the amount of floor space to carry and
display a proper merchandise assortment.

Mother Hen with Branch Store Chickens Organization Exists when headquarters
executives oversee and operate the branches. This works well if there are few branches
and the buying preferences of branch customers are similar to customers of the main
store.

Multiple-Unit Pricing A policy whereby a retailer offers discounts to customers who buy
in quantity.

Mystery Shoppers People hired by retailers to pose as customers and observe their
operations, from sales presentations to how well displays are maintained to in-home
service calls.

Negotiated Pricing Occurs when a retailer works out prices with individual customers
because a unique or complex service is involved and a one-time price must be agreed
upon.

Neighborhood Business District (NBD) An unplanned shopping area that appeals to the
convenience-shopping and service needs of a single residential area. The leading retailer
is typically a supermarket, a large drugstore, or a variety store and it is situated on the
major street(s) of its residential area.

Neighborhood Shopping Center A planned shopping facility with the largest store being
a supermarket and/or a drugstore. It serves 3,000 to 50,000 people who are within 15
minutes' driving time (usually fewer than 10 minutes).

Never-Out List Used when a retailer plans stock levels for best-sellers. Items accounting
for high sales volume are stocked in a manner that ensures they are always available.

Niche Retailing Enables retailers to identify customer segments and deploy unique
strategies to address the desires of those segments.

Nonstore Retailing Utilizes strategy mixes that are not store-based to reach consumers
and complete transactions. It occurs via direct marketing, direct selling, and vending
machines.

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Open-to-Buy The difference between planned purchases and the purchase commitments
already made by a buyer for a given time period, often a month. It represents the amount
the buyer has left to spend for that month and is reduced each time a purchase is made.

Opportunistic Buying Negotiating special low prices for merchandise whose sales have
not lived up to expectations, end-of-season goods, items consumers have returned to the
manufacturer or another retailer, and closeouts.

Order-Getting Salesperson Actively involved with informing and persuading


customers, and in closing sales. This is a true "sales" employee.

Order Lead Time The period from the date an order is placed by a retailer to the date
merchandise is ready for sale (received, price-marked, and put on the selling floor).

Order-Taking Salesperson Involved in routine clerical and sales functions, such as


setting up displays, placing inventory on the shelves, answering simple questions, filling
orders, and ringing up sales.

Organizational Mission A retailer's commitment to a type of business and to a


distinctive role in the marketplace. It is reflected in the firm's attitudes to consumers,
employees, suppliers, competitors, government, and others.

Outshopping When a person goes out of his or her hometown to shop.

Outside Buying Organization A company or person external to the retailer that is hired
to fulfill the buying function, usually on a fee basis.

Overstored Trading Area A geographic area with so many stores selling a specific good
or service that some retailers will be unable to earn an adequate profit.

AMIT MITTAL

Parasite Store An outlet that does not create its own traffic and that has no real trading
area of its own.

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Percentage-of-Sales Method A promotional budgeting technique whereby a retailer ties
its promotion budget to sales revenue.

Percentage Variation Method An inventory-level planning method where beginning-of-


month planned inventory level during any month differs from planned average monthly
stock by only one-half of that month's variation from estimated average monthly sales.

Performance Measures The criteria used to assess retailer effectiveness. They include
total sales, average sales per store, sales by goods/service category, sales per square foot,
gross margins, gross margin return on investment, operating income, inventory turnover,
markdown percentages, employee turnover, financial ratios, and profitability.

Personal Selling Involves oral communication with one or more prospective customers
for the purpose of making sales.

Personnel Space The area required for employees for changing clothes, lunch and coffee
breaks, and rest rooms.

Physical Inventory System Involves an actual counting of merchandise. A retailer using


the cost method of inventory valuation and relying on a physical inventory system can
derive gross profit only as often as it conducts a full physical inventory.

Planned Shopping Center Consists of a group of architecturally unified commercial


establishments built on a site that is centrally owned or managed, designed and operated
as a unit, based on balanced tenancy, and surrounded by parking facilities.

Planogram A visual (graphical) representation of the space to be allocated to selling,


merchandise, personnel, and customers -- as well as to product categories.

PMs A manufacturer's payments for retail salespeople selling that manufacturer's brand.
PMs are in addition to the compensation received from the retailer.

Point of Indifference The geographic breaking point between two cities (communities),
so that the trading area of each can be determined. At this point, consumers would be
indifferent to shopping at either area.

Point-of-Purchase (POP) Display An interior display that provides consumers with


information, adds to store atmosphere, and serves a substantial promotional role.

Positioning Enables a retailer to devise its strategy in a way that projects an image
relative to its retail category and its competitors, and elicits consumer responses to that
image.

Poverty of Time Occurs when greater striving for financial security leads to less rather
than more free time since the alternatives competing for consumers' time rise
considerably.

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Power Center A shopping site with (a) up to a half-dozen or so category killer stores and
a mix of smaller stores or (b) several complementary stores specializing in a product
category.

Power Retailer The status reached by a company that is dominant in some aspect of its
strategy. Consumers view the company as distinctive enough to become loyal to it and go
out of their way to shop there.

Predatory Pricing Involves large retailers that seek to destroy competition by selling
goods and services at very low prices, thus causing small retailers to go out of business.
The practice is restricted by federal and state laws.

Prestige Pricing Assumes consumers will not buy goods and services at prices deemed
too low. It is based on the price-quality association.

Price Line Classifications Enable retail sales, inventories, and purchases to be analyzed
by retail price category.

Price Lining (1) A practice whereby retailers sell merchandise at a limited range of price
points, with each price point representing a distinct level of quality.

Price Lining (2) Used by service retailers providing a wide selection of services. A range
of prices is matched to service levels.

Private (Dealer) Brands Contain names designated by wholesalers or retailers, are more
profitable to retailers, are better controlled by retailers, are not sold by competing
retailers, are less expensive for consumers, and lead to customer loyalty to retailers.

Prototype Stores Occur with an operations strategy that requires multiple outlets in a
chain to conform to relatively uniform construction, layout, and operations standards.

Psychological Pricing Refers to consumer perceptions of retail prices.

Publicity Any nonpersonal form of public relations whereby messages are transmitted
through mass media, the time or space provided by the media is not paid for, and there is
no identified commercial sponsor.

Public Relations Entails any communication fostering a favorable image for a retailer
among its publics (consumers, investors, government, channel members, employees, and
the general public).

Quick Response (QR) Inventory Planning Enables a retailer to reduce the amount of
inventory it keeps on hand by ordering more frequently and in lower quantity.

Rack Display An interior display that hangs or presents products neatly.

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Reference Groups Influence people's thoughts and/or behavior. They may be classified
as aspirational, membership, and dissociative.

Regional Shopping Center A large, planned shopping facility appealing to a


geographically dispersed market. It has at least one or two full-sized department stores
and 50 to 150 or more smaller retailers. The market for this center is 100,000-plus people,
who live or work up to 30 minutes' driving time from the center.

Reilly's Law of Retail Gravitation The traditional means of trading area delineation that
establishes a point of indifference between two cities or communities, so the trading area
of each can be determined.

Relationship Retailing Exists when retailers seek to establish and maintain long-term
bonds with customers, rather than act as if each sales transaction is a completely new
encounter with them.

Reorder Point The stock level at which new orders must be placed.

Resident Buying Office An inside or outside buying organization that is usually situated
in important merchandise centers (sources of supply) and provides valuable data and
contacts.

Retail Audit The systematic examination and evaluation of a firm's total retailing effort
or some specific aspect of it. Its purpose is to study what a retailer is presently doing,
appraise how well the firm is performing, and make recommendations for future actions.

Retail Balance Refers to the mix of stores within a district or shopping center.

Retail Information System Anticipates the information needs of retail managers;


collects, organizes, and stores relevant data on a continuous basis; and directs the flow of
information to the proper retail decision makers.

Retailing Consists of those business activities involved in the sale of goods and services
to consumers for their personal, family, or household use.

Retailing Concept Comprises these four elements: customer orientation, coordinated


effort, value-driven, and goal orientation.

Retailing Effectiveness Checklist Lets a firm systematically assess its preparedness for
the future.

Retail Institution Refers to the basic format or structure of a business. Institutions can be
classified by ownership, store-based retail strategy mix, service versus goods retail
strategy mix, and nonstore-based retail strategy mix.

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Retail Life Cycle A theory asserting that institutions -- like the goods and services they
sell -- pass through identifiable life-cycle stages: innovation, accelerated development,
maturity, and decline.

Retail Method of Accounting A way by which the closing inventory value is determined
by calculating the average relationship between the cost and retail values of merchandise
available for sale during a period.

Retail Organization How a firm structures and assigns tasks (functions), policies,
resources, authority, responsibilities, and rewards so as to efficiently and effectively
satisfy the needs of its target market, employees, and management.

Retail Performance Index Encompasses five-year trends in revenue growth and profit
growth, and a six-year average return on assets.

Retail Promotion Any communication by a retailer that informs, persuades, and/or


reminds the target market about any aspect of that firm.

Retail Reductions Represent the difference between beginning inventory plus purchases
during the period and sales plus ending inventory. They should encompass anticipated
markdowns, employee and other discounts, and stock shortages.

Retail Strategy The overall plan guiding a retail firm. It has an influence on the firm's
business activities and its response to market forces, such as competition and the
economy.

Safety Stock The extra inventory kept on hand to protect against out-of-stock conditions
due to unexpected demand and delays in delivery.

Saturated Trading Area A geographic area having a proper amount of retail facilities to
satisfy the needs of its population for a specific good or service, as well as to let retailers
prosper.

Scenario Analysis Lets a retailer project the future by examining the key factors that will
affect its long-run performance and then preparing contingency plans based on alternate
scenarios.

Scrambled Merchandising Occurs when a retailer adds goods and services that are
unrelated to each other and to the firm's original business.

Secondary Business District (SBD) An unplanned shopping area in a city or town that is
usually bounded by the intersection of two major streets. It has at least a junior
department store, a variety store, and/or some larger specialty stores -- in addition to
many smaller stores.

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Secondary Trading Area A geographic area with an added 15 percent to 25 percent of a
store's customers. It is located outside a primary trading area, and customers are more
widely dispersed.

Selective Distribution Takes place when suppliers sell through a moderate number of
retailers. This allows suppliers to have higher sales than in exclusive distribution and lets
retailers carry some competing brands.

Selling Space The area set aside for displays of merchandise, interactions between
salespeople and customers, demonstrations, and so on.

Separate Store Organization Treats each branch as a separate store with its own buying
responsibilities. Customer needs are quickly noted, but duplication by managers in the
main store and the branches is possible.

Service Blueprint Systematically lists all the service functions to be performed and the
average time expected for each one's completion.

Service Retailing Involves transactions between companies or individuals and final


consumers where the consumers do not purchase or acquire ownership of tangible
products. It encompasses rented goods, owned goods, and nongoods.

SERVQUAL Lets retailers assess the quality of their service offerings by asking
customers to react to a series of statements in five areas of performance: reliability,
responsiveness, assurance, empathy, and tangibles.

Sorting Process Involves the retailer's collecting an assortment of goods and services
from various sources, buying them in large quantity, and offering to sell them to
consumers in small quantities.

Specialty Store A general merchandise retailer that concentrates on selling one goods or
service line.

Standardization A strategy of directly applying a domestic market retail strategy to


foreign markets.

Stock Turnover Represents the number of times during a specific period, usually one
year, that the average inventory on hand is sold. Stock turnover can be computed in units
or dollars (at retail or cost).

Storability Product Groupings Classify and display products needing special handling
and storage together.

Storefront The total physical exterior of a store. It includes the marquee, entrances,
windows, lighting, and construction materials.

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Store Loyalty Exists when a consumer regularly patronizes a particular retailer (store or
nonstore) that he or she knows, likes, and trusts.

Straight (Gridiron) Traffic Flow Presents displays and aisles in a rectangular or


gridiron pattern.

String An unplanned shopping area comprising a group of retail stores, often with similar
or compatible product lines, located along a street or highway.

Supercenter A special type of combination store that blends an economy supermarket


with a discount department store.

Supermarket A self-service food store with grocery, meat, and produce departments and
minimum annual sales of $2 million. This retail category includes conventional
supermarkets, food-based superstores, combination stores, box (limited-line) stores, and
warehouse stores.

Theme-Setting Display An interior display that depicts a product offering in a thematic


manner and lets a retailer portray a specific atmosphere or mood.

Total Retail Experience Consists of all the elements in a retail offering that encourage or
inhibit consumers during their contact with a given retailer.

Trading Area A geographic area containing the customers of a particular firm or group
of firms for specific goods or services.

Traditional Department Store A department store where merchandise quality ranges


from average to quite good, pricing is moderate to above average, and customer service
levels of help range from medium to high.

Unbundled Pricing Involves a retailer's charging separate prices for each service
offered.

Understored Trading Area A geographic area having too few stores selling a specific
good or service to satisfy the needs of its population.

Unit Control Relates to quantities of merchandise a retailer handles during a stated time
period.

Unit Pricing A practice required by many states, whereby retailers (mostly food stores)
must express price in terms of both the total price of an item and its price per unit of
measure.

Universal Product Code (UPC) A classification for coding data onto products by a
series of thick and thin vertical lines. It lets retailers record data instantaneously as to the
model number, size, color, and other factors when an item is sold, and to transmit the data

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to a computer monitoring unit sales, inventory levels, and other factors. The UPC is not
readable by humans.

Unplanned Business District A type of retail location where two or more stores situate
together (or in close proximity) in such a way that the total arrangement or mix of stores
in the district is not the result of prior long-range planning.

Usage Rate Refers to average sales per day, in units, of merchandise..

Value Pricing Occurs when prices are set on the basis of fair value for both the service
provider and the consumer.

Variable Markup Policy A strategy whereby a retailer purposely varies markups by


merchandise category.

Variable Pricing A pricing strategy wherein a retailer alters its prices to coincide with
fluctuations in costs or consumer demand.

Variety Store A retail store that handles a wide assortment of inexpensive and popularly
priced goods and services, such as stationery, gift items, women's accessories, health and
beauty aids, light hardware, toys, housewares, confectionery items, and shoe repair.

Vending Machine A retailing format that involves the coin- or card-operated dispensing
of goods and services. It eliminates the use of sales personnel and allows around-the-
clock sales.

Vertical Cooperative-Advertising Agreement Enables a manufacturer and a retailer or a


wholesaler and a retailer to share an ad.

Vertical Marketing System Consists of all the levels of independently owned businesses
along a channel of distribution. Goods and services are normally distributed through one
of three types of systems: independent, partially integrated, and fully integrated.

Vertical Price Fixing Occurs when manufacturers or wholesalers are able to control the
retail prices of their goods and services.

Vertical Retail Audit Involves analyzing -- in depth -- a retail firm's performance in one
area of its strategy mix or operations.

Video Catalog A retail catalog that appears on a CD-ROM disk and is viewed on a
computer monitor.

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Video Kiosk A freestanding, interactive computer terminal that displays products and
related information on a video screen; it often uses a touchscreen for people to make
selections.

Want Book (Want Slip) A notebook or slip in which store employees record consumer
requests for unstocked or out-of-stock merchandise.

Warehouse Store A food-based discounter offering a moderate number of food items in a


no-frills setting.

Weeks' Supply Method An inventory-level planning method wherein beginning


inventory is equal to several weeks' expected sales. It assumes the inventory carried is in
direct proportion to sales.

Wheel of Retailing A theory stating that retail innovators often first appear as low-price
operators with a low-cost structure and low profit-margin requirements. Over time, these
innovators upgrade the products they carry and improve their facilities and customer
services. They then become vulnerable to new discounters with lower cost structures.

Width of Assortment Refers to the number of distinct goods/service categories with


which a retailer is involved.

Yield Management Pricing Used when a service firm determines the combination of
prices that yield the highest level of revenues for a given time period.

Zero-Based Budgeting The practice followed when a firm starts each new budget from
scratch and outlines the expenditures needed to reach that period's goals. All costs must
be justified each time a budget is done.

Amit Mittal
Program Director
PGDBM
NSB
New Delhi

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