Retailing Terms

80/20 Rule
A commonly used rule of thumb, the 80/20 Rule, implies that a small number of events (20%) is responsible for a large percentage (80%) of the results.

Ad Slick
Ad slicks refer to the final, camera-ready advertisement. It gets its name from the glossy paper on which it is printed.

Add-On Sales
Add-on sales are the promotion of additional products or services to a customer at the time of purchase.

Anchor Store
A major retail store used to drive business to smaller retailers. These larger department stores or grocery stores are generally part of a retail chain and are the prominent business in a shopping mall.

Atmosphere
Atmosphere is the physical characteristics and surrounding influence of a retail store that is used to create an image in order to attract customers.

Big Box Stores

Large stand-alone store with varying market niches.

Black Friday
Black Friday is used to describe a number of historical Fridays in which an event led to public chaos or disaster.

Blue Law
Rules created to prohibit particular activities to certain days or hours. Many blue laws have been removed from the law books or are no longer enforced.

Booking Program
A vendor booking program is the opportunity to view new products or samples now and to place an order for that merchandise to be delivered at a later date.

Break-Even Point
What is the break-even point? The point in business where the sales equal the expenses. There is no profit and no loss.

Brick and Mortar

Brick and mortar store refers to retail shops that are located in a building as opposed to an online shopping destination, door-to-door sales, kiosk or other similar site not housed within a structure.

Category Killer
A large retail chain store that is dominant in its product category. This type of store generally offers an extensive selection of merchandise at prices so low smaller stores cannot compete.

Chain Store
One of a number of retail stores under the same ownership and dealing in the same merchandise.

Co-operative
What does co-op stand for? What is a co-operative as relating to retail business? Learn more about this and other retailing terms.

Comp Sales
Comparable-store sales is a measurement of productivity in revenue used to compare sales of retail stores that have been open for a year or more.

Contribution Margin
Contribution Margin is the difference between total sales revenue and total variable costs. The term is applied to a product line and is generally expressed as a percentage.

Coupon
A promotional tool in the form of a document that can be redeemed for a discount when purchasing goods or services. Coupons feature specific savings amount or other special offer to persuade consumers to purchase specific goods or services or to purchase from specific retailers.

CRM - Customer Relationship Management

Customer Relationship Management (CRM) is a business strategy designed to reduce costs and increase profitability by strengthening customer loyalty.

Cross-Sell
Cross-selling refers to a sales technique in which the salesperson recognizes what a customer is purchasing and will make suggestions or recommendations of other related merchandise the shopper may also be interested in purchasing.

Cyber Monday
Cyber Monday is one of the busiest shopping days of the year for online retailers. Retailers notice a spike in sales on this day as many consumers who were too busy to shop over the Thanksgiving weekend or did not find what they were looking for, headed to the web on Monday from work or home to find bargains.

Dead Stock
Does your retail store have dead stock? Learn more about this retailing term for used or unsold merchandise.

Digital Signage
Digital signage refers to a variety of technologies used to replace traditional retail signs. Instead of static print signs and billboards, digital signage is composed of electronic signs dispersing content and messages in the most targeted, interactive way.

Drop Shipping
Drop shipping is the process in which a retailer markets a product, collects payment from the customer and then orders the item from a supplier, to be shipped directly that customer. The retailer's profit is the difference between the amount collected and the amount spent. No inventory is held and the retailer is not involved in the shipping.

EIN - Employer Identification Number

An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. Most businesses need an EIN. You may apply for an EIN in various ways, including online.

Exit Interview
Written or verbal conversation with a departing employee that show why the employee is leaving and how the business is viewed by others.

Facing
The number of identical products (or same SKU) facing out toward the customer. Facings are used in planograms and when zoning a retail store.

Fair Trade

Fair trade is an organized movement developed to promote standards of environmentalism and fair wages, alleviate global poverty and ensure that companies negotiate with the growers, manufacturers and producers of products for a fair price. This social-responsibility movement focuses on exports from developing countries.

First In, First Out

A method of stock rotation in which goods that are received first are sold first. Newly received product is stocked behind the older merchandise.

FOB
Shipping term used to indicate who is responsible for paying transportation charges.

Keystone
Keystone pricing is a method of marking merchandise for resell to an amount that is double the wholesale price.

Kiosk
The term kiosk, as related to retailing, refers to a small stand-alone structure used as a point of purchase. This can be either a computer or display screen used to disseminate information to customers or may be a freestanding, full-service retail location. Kiosks are often found in malls and other high-traffic locations.

Layaway
Layaway is the act of taking a deposit to store merchandise for a customer to purchase at a later date.

Loss Leader
Merchandise sold below cost by a retailer in an effort to attract new customers or stimulate other profitable sales.

Loss Prevention

Loss prevention is the act of reducing the amount of theft and shrinkage within a business. Planned reduction in the selling price of an item, usually to take effect either within a certain number of days after seasonal merchandise is received or at a specific date.

Marketing Calendar
A marketing calendar is a tool used by retailers to show what marketing events, media campaigns and merchandising efforts are happening when and where, as well as the results..

Merchandise Mix
A merchandise mix is the breadth and depth of the products carried by retailers. Also known as product assortment.

Minimum Advertised Price

A suppliers pricing policy that does not permit its resellers to advertise prices below some specified amount. It can include the resellers retail price as well.

Mystery Shopping
What is a mystery shopping program? Learn about this retailing term to effectively improve business.

Odd-Even Pricing
A form of psychological pricing that suggests buyers are more sensitive to certain ending digits.

Open-to-Buy
Merchandise budgeted for purchase during a certain time period that has not yet been ordered.

Operating Expenses
The sum of all expenses associated with the normal course of running a business.

Point-of-Purchase Display
Point-of-purchase displays, or POP displays, are marketing materials or advertising placed next to the merchandise it is promoting. These items are generally located at the checkout area or other location where the purchase decision is made. For example, The checkout counters of many convenience stores are cluttered with cigarette and candy POP displays.

POS
Point of Sale (POS) refers to the area of a store where customers can pay for their purchases. The term is normally used to describe systems that record financial transactions. This could be an electric cash register or an integrated computer system which records the data that comprises a business transaction for the sale of goods or services.

Private Label
Products which are generally manufactured or provided by one company under another company's brand.

Quantity Discount
A reduction in price based on the amount purchased. May be offered in addition to any trade discount.

RFID
Radio Frequency Identification (RFID) refers to the technology that uses radio waves to transmit a product's unique number from a tag to a reader.

Run of Paper
Run of paper is an advertising term by newspapers referring to an advertisement that may be placed anywhere within the paper.

Sales Floor

The sales floor is the location of a retail store where goods are displayed and sales transactions take place. For example, the receiving of merchandise takes place in the stock room, but all direct sales and customer interactions are done on the sales floor.

Sell-Through Rate
Sell-through Rate is a calculation, commonly represented as a percentage, comparing the amount of inventory a retailer receives from a manufacturer or supplier against what is actually sold to the consumer.

Shoplifting
Shoplifting is the theft of property which is worth less than $500 and which occurs with the intent to deprive the owner of that piece of property. The crime of shoplifting is the taking of merchandise offered for sale without paying.

Shrinkage
Retail shrinkage is a reduction or loss in inventory due to shoplifting, employee theft, paperwork errors and supplier fraud.

SKU
The Stock Keeping Unit (SKU) is a number assigned to a product by a retail store to identify the price, product options and manufacturer.

Sliding
A loss prevention term referring to the act of a cashier passing merchandise around the cash register barcode scanner without actually scanning the item.

Standard Industrial Classification Code (SIC Codes)

A coding system using four digits to identify specific industrial sectors within the Federal Government. The first two digits identify the broad industrial sector and the last two digits represent a facility's specialty within this broad sector.

Staple Goods

Staple goods are products purchased regularly and out of necessity. Traditionally, these items have fewer markdowns and lower profit margins. While price shifts may raise or lower demand for certain kinds of products, the demand for staple goods rarely changes when prices change.

Sustainability
Sustainability refers to the characteristic of certain products that provide environmental, social and economic benefit. Sustainable products are produced with minimal energy and packaging. They are considered ecofriendly as they cause no harm to the environment throughout their entire life cycle.

Triple Net Lease - NNN or Net-Net-Net

A triple net lease is a rental agreement on a commercial property where the tenant agrees to pay all real estate taxes, building insurance, and maintenance on the property.

Visual Merchandising
Visual merchandising is the art of implementing effective design ideas to increase store traffic and sales volume.

Word-of-Mouth
Possibly the most effective form of marketing. It is the verbal recommendation and positive approval by a satisfied customer.

Retail marketing assignment

(Retail terms & Swot analysis of pizza hut)

Submitted by: Waqar Hussain 2010-ag-1026 MBA Section-A Submitted to: Sir Zeshan

Institute of business management & sciences

SWOT ANALYSIS OF PIZZA HUT

Is a restaurant chain and international franchise based in Addison, Texas, USA (a northern suburb of Dallas) specializing in American-style pizza along with side dishes including (depending On location): buffalo wings, breadsticks, and garlic bread. Pizza Hut is the world's largest pizza restaurant chain and is a subsidiary Of Yum! Brands, Inc., whose restaurants total approximately, 34,000 restaurants, delivery-carry out units, and kiosks in 100 Countries. The chain was founded as a pizzeria in 1958 by the Carney brothers-Dan and Frank. Borrowing $600 from their mother, the brothers purchased some second-hand equipment. The then Wichita State University students took a family pizza recipe, rented a small building, and opened the first restaurant at a busy intersection in Wichita, Kansas. The oldest continuously-operating Pizza Hut in the world is in Manhattan, Kansas, in a shopping and tavern district known as Aggieville.

Swot analysis of pizza hut Strengths:

Part of the largest restaurant chain in the world Over 20,000 franchises around the world

 Brand leader in the UK Innovative range of pizzas under one roof Famous television advertising Food attracts people of various ranges from young to old. Sound financial situation and international turnover. 100% owned by yum! Pizza Hut sits on top of global full-service restaurant tree

Weaknesses:
Loyal customers are feeling that the satisfaction of the pizzas is declining. While Novak said Pizza Huts expansion into China is going exceedingly Well, there is battling problems in New Zealand and Australia. There are complex computer systems and internal conflicts from Franchisees. There is a lack of organic pizzas, which will limit the target market

Threat:
Rising competition undermines Pizza Hut as consumers go for greater Convenience Rising cheese costs threaten margins Threat from Dominos pizza, also from Mc Donalds who have tried to Introduce a new meal that is a Pizza called: McPizza.

Opportunities
New Pizzas with different crust sizes and flavours.
Pizza Hut expands Indian market menu and looks to old favourite to Bolster sales in the US. Pizza Hut targets upscale products and a downscale consumer base

Pizza hut strengths:

Through pizza hut being the largest restaurant chain in the world, this obviously means they dominate their market, and can invest in new products, e.g. new pizzas. They have low competition, although they do have competitors such as dominos pizza, yet they have an advantage over these as pizza hut are a restaurant as well as a take away unlike dominos pizza, this means pizza hut may have more sales therefore more income, which may help pizza hut with any improvements or adjustments needed to the business. Pizza hut has a huge market segment, attracting more customers meaning a higher percentage in sales, which may lead to greater profits.

Pizza hut weaknesses:

Loyal customers are feeling that the satisfaction of the pizzas is declining. This may lead to low customer satisfaction and a reduction in customers and credibility in the market, this may lead to customers converting to main competitors such as dominos pizza. While Novak said Pizza Huts expansion into China is going exceedingly well, there is battling problems in New Zealand and Australia. This therefore meaning they are losing money in places such as new Zealand and Australia, this could be due to their culture and lifestyle, maybe meaning

pizza hut need to introduce a more varied range of products to attract customers of all lifestyles and cultures. There are complex computer systems and internal conflicts from franchisees, this leads to de-motivation of staff. Lowering the quality of products (pizzas), service to customers, and could lead to a lack of new ideas.

Pizza Hut Threats:

Rising competition undermines Pizza Hut as consumers go for greater convenience; this will lower the amount of sales consumed by Pizza Hut as these sales are going to smaller companies who are charging less. Rising cheese costs threaten margins, cheese is essential to the business as it is there primary good, there for they are unable to go with out it, this may lead to Pizza Hut eventually buying goods from abroad or buying cheaper brands. Threat from Dominos pizza, also from Mc Donalds who have tried to introduce a new meal that is a Pizza called: McPizza. So Pizza hut will have to improve or maintain the quality of the pizzas in order to compete with Dominos and McDonalds, to ensure that Pizza hut dominate this market. They will also have to keep their prices down and this may lead to them buying good from abroad where it is cheaper.

Opportunities
Pizza Hut can introduce new Pizzas with different crust sizes and flavours. This may attract new customers with new tastes and this may increase their sales. Pizza Hut has expanded into the Indian market menu and looks to the old favourite to bolster sales in the US. Pizza Hut has targeted upscale products and a downscale consumer base; this will attract customers who are more willing to buy these Pizzas.

Ansoffs Matrix:
Shows the main strategic options available to firms. We believe that the best option for Pizza hut is to introduce new products in existing market. So this firm should follow a product development strategy. This may involve substantial modification of or additions to its present product range, which in turn might require extensive research and development. So Pizza Hut can introduce a new Pizza with different toppings in order to widen their product range. Also as Pizza Hut lead this market segment they have the money to indulge in research and development. We feel that Pizza Hut should not follow the strategy of diversification, this is a high risk strategy as it would be very difficult for them to find a completely different product as they are un experienced and

have limited skills for example in producing footballs. Customers in this segment would prefer to go to top brands such as Adidas and Nike.