5th Edition

PPT 1-1 Consumer Behavior Ignacio J. Vzquez E. 2007

 Chapter 1

Introduction to the
World of Retailing

McGraw-Hill/Irwin
PPT 1-2 Consumer
Levy/Weitz: Behavior 5/e
Retailing Management,
Ignacio J. Vzquez E. 2007
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights
 What is Retailing?

Retailing a set of business activities that

adds value to the products and services sold to
consumers for their personal or family use.

A retailer is a business that sells products

and/or services to consumers for personal or
family use.

PPT 1-3 Consumer Behavior Ignacio J. Vzquez E. 2007

 Examples of Retailers

Retailers:
-Sears, Holiday Inn, McDonalds, Amazon.com, Jiffy
Lube, AMC Theaters, American Eagle Outfitter, FAO
Schwartz, Kroger

Firms that are retailers and wholesalers that

sell to other business as well as consumers:
-Office Depot, The Home Depot, United Airlines, Bank
of America, Sams Clubs

PPT 1-4 Consumer Behavior Ignacio J. Vzquez E. 2007

 How Retailers Add Value

Breaking Bulk
-Buy it in quantities customers want
Holding Inventory
-Buy it at a convenient place when you want it
Providing Assortment
-Buy other products at the same time
Offering Services
-See it before you buy, get credit, layaway
PPT 1-5 Consumer Behavior Ignacio J. Vzquez E. 2007
 How Retailers Add Value

The value of the product and service increases

as the retailer performs functions.

Doll can be bought

on credit or put on
layaway

Doll is featured on
floor display
Doll is offered in
convenient
locations in
Doll is developed in quantities of one
several styles
Doll is developed at
manufacturer
PPT 1-6 Consumer Behavior Ignacio J. Vzquez E. 2007
 Manufacturers Perspective

The Four Ps of Marketing

Retailers
Retailersare
are part
part of
of the
the
distribution channel
distribution channel
Product

Distribution Price

Promotion

PPT 1-7 Consumer Behavior Ignacio J. Vzquez E. 2007

 Distribution Channel

PPT 1-8 Consumer Behavior Ignacio J. Vzquez E. 2007

 Retailers are a Business Like Manufacturers

Accounting Finance Marketing

Operations MIS Human Resources

PPT 1-9 Consumer Behavior Ignacio J. Vzquez E. 2007

 Decision Variables for Retailers

Customer Service

Store Design Merchandise

and Display Assortment
Retail
Strategy
Pricing Location

Communication
Mix

PPT 1-10 Consumer Behavior Ignacio J. Vzquez E. 2007

 Economic Significance of Retailing

Over $2.5 trillion in annual U.S. sales

-greater than medical care, housing, recreation combine

Employs 17% of population

-about the same as manufacturing and growing

Management training opportunities

Entrepreneurial opportunities

PPT 1-11 Consumer Behavior Ignacio J. Vzquez E. 2007

 Nature of Retail Industry is Changing

To Todays Retailer

Mom and Pop Store

PPT 1-12 Consumer Behavior Ignacio J. Vzquez E. 2007

 Retailing is a High Tech Industry

- Selling Merchandise over the Internet

- Using Internet to manage supply chains

- Analyze POS data to tailor assortments to stores

- Computer systems for merchandise planning

PPT 1-13 Consumer Behavior Ignacio J. Vzquez E. 2007

 Globalization of Retailing

Source Merchandise From Around the World

Wal-Mart Operates in U.S., China, Mexico, UK, Germany

Carrefour has Stores in 25 Countries

PPT 1-14 Consumer Behavior Ignacio J. Vzquez E. 2007

Retail Environment Differs Across the Globe

US Japan
Concentration High Medium

Store Size Big Small

Role of Low High

Wholesaling

Efficiency High Low

PPT 1-15 Consumer Behavior Ignacio J. Vzquez E. 2007

 JC Penneys Strategic Evolution

Main Street private label soft goods retailer

Changes in environment -- increased disposable
income, growth of suburbs, interstate highway
program
Emulate Sears in enclosed suburban malls
Focus on soft goods -- drop automotive, sporting
goods, hardware
Develop catalog, develop electronic retailing
Future (?)
PPT 1-16 Consumer Behavior Ignacio J. Vzquez E. 2007
 Sears Strategic Evolution

Large number of merchandise categories --

appliances, hardware, apparel
Malls evolved into places for buying soft goods,
hard goods sold at category killers
The Softer Side of Sears
Refocused on value -- Testing carts in stores
Acquired Lands End
Reviewed training program for new managers
PPT 1-17 Consumer Behavior Ignacio J. Vzquez E. 2007
 Whole Foods Implementation

Strategy - organic and natural

foods supermarket chain

Assortment beyond
organic/natural foods
Private labels - Whole
Food, 360 Day Value
Love, trust, and employee
empowerment
Equality in compensation
PPT 1-18 Consumer Behavior Ignacio J. Vzquez E. 2007
 Hot Topics Retail Mix

Customer Service Location

Store Design Merchandise

Retail Strategy Assortment
And Display

Communication Pricing
Mix
PPT 1-19 Consumer Behavior Ignacio J. Vzquez E. 2007
 Hot Topics Retail Mix

Location Strategy

Enclosed malls

Customer
Service

Store Display Merchandise

And Design Assortment

Communication Pricing
Mix

PPT 1-20 Consumer Behavior Ignacio J. Vzquez E. 2007

 Hot Topics Retail Mix

Assortment Strategy

Customer
Service Location

Many Different
Store Design
and Display
Hot Band
T-shirts and
Communication
Pricing
Accessories
Mix

PPT 1-21 Consumer Behavior Ignacio J. Vzquez E. 2007

 Hot Topics Retail Mix

Location
Pricing Strategy
Customer
Merchandise
Service
Assortment

Store Design
and Display

Communication
Mix Modest with Sales

PPT 1-22 Consumer Behavior Ignacio J. Vzquez E. 2007

 Hot Topics Retail Mix

Customer
Service Location

Communication Mix Store Design

Merchandise
And Display
Assortment

Pricing

TV and
Magazine Ads

PPT 1-23 Consumer Behavior Ignacio J. Vzquez E. 2007

 Hot Topics Retail Mix

Store Design and Display

Customer
Service Location

Heavy Metal,
Merchandise
Gothic Look Assortments

Communication
Mix Pricing

PPT 1-24 Consumer Behavior Ignacio J. Vzquez E. 2007

 Hot Topics Retail Mix

Customer Service

Modest
Location

Merchandise
Assortment

Store Design
and Display Pricing

Communication
Mix

PPT 1-25 Consumer Behavior Ignacio J. Vzquez E. 2007

 Macys Retail Mix

Customer
Location
Service

Store Design Merchandise

And Display Retail Strategy Assortment

Pricing
Communication
Mix
PPT 1-26 Consumer Behavior Ignacio J. Vzquez E. 2007
 Macys Retail Mix

Location Strategy

Enclosed Malls

Customer
Service

Store Display Merchandise

And Design Assortment

Communication Pricing
Mix

PPT 1-27 Consumer Behavior Ignacio J. Vzquez E. 2007

 Macys Retail Mix

Assortment Strategy

Customer
Service Location

Store Design
and Display
Many Items in
Apparel and
Communication
Soft Home
Mix Pricing

PPT 1-28 Consumer Behavior Ignacio J. Vzquez E. 2007

 Macys Retail Mix

Location
Pricing Strategy
Customer
Merchandise
Service
Assortment

Store Design
and Display

Communication
Mix
Moderate with
Frequent Sales

PPT 1-29 Consumer Behavior Ignacio J. Vzquez E. 2007

 Macys Retail Mix

Customer
Service Location

Communication Mix Store Design

And Display Merchandise
Assortment

Pricing

TV, Newspaper Ads

and Special Events

PPT 1-30 Consumer Behavior Ignacio J. Vzquez E. 2007

 Macys Retail Mix

Store Design and Display

Customer
Service Location

Ring with Displays Merchandise

Assortments

Communication
Mix Pricing

PPT 1-31 Consumer Behavior Ignacio J. Vzquez E. 2007

 Macys Retail Mix

Customer Service

Modest
Location

Merchandise
Assortment

Store Design
and Display Pricing

Communication
Mix

PPT 1-32 Consumer Behavior Ignacio J. Vzquez E. 2007

 Wal-Marts Retail Mix

Customer Location
Service

Store Design Merchandise

And Display Retail Strategy Assortment

Communication Pricing
Mix

PPT 1-33 Consumer Behavior Ignacio J. Vzquez E. 2007

 Wal-Marts Retail Mix

Location Strategy

Free-standing Stores

Customer
Service

Store Display Merchandise

And Design Assortment

Communication
Mix Pricing

PPT 1-34 Consumer Behavior Ignacio J. Vzquez E. 2007

 Wal-Marts Retail Mix

Assortment Strategy

Customer
Service Location

Large Number
Store Design
and Display
of Categories
Few Items
Communication
Mix Pricing
in Each Category

PPT 1-35 Consumer Behavior Ignacio J. Vzquez E. 2007

 Wal-Marts Retail Mix

Location
Pricing Strategy
Customer
Merchandise
Service
Assortment

Store Design
and Display

Communication
Mix Low, EDLP

PPT 1-36 Consumer Behavior Ignacio J. Vzquez E. 2007

 Wal-Marts Retail Mix

Customer
Service Location

Communication Mix
Store Design Merchandise
and Display Assortment

Pricing

TV and Newspaper
Insert Ads

PPT 1-37 Consumer Behavior Ignacio J. Vzquez E. 2007

 Wal-Marts Retail Mix

Store Design and Display

Customer
Service Location

Basic, Special
Merchandise
Displays Assortments
for Products
Communication
Mix Pricing

PPT 1-38 Consumer Behavior Ignacio J. Vzquez E. 2007

 Wal-Marts Retail Mix

Customer Service

Limited

Location

Merchandise
Assortment

Store Design
and Display Pricing

Communication
Mix

PPT 1-39 Consumer Behavior Ignacio J. Vzquez E. 2007

 Career Opportunities in Retailing
Start Your Own Business
List of Retail Entrepreneurs on
Forbes 400 Richest Americans
Walton Family (Wal-Mart)
Fisher (The Gap)
Wexner (Limited)
Menard (Menards)
Marcus, Blank (The Home Depot)
Kellogg (Kohls)
Schulze (Best Buy)
Levine (Family Dollar)
Gold (99Cent Only)
PPT 1-40 Consumer Behavior Ignacio J. Vzquez E. 2007
 Misconceptions About Careers in Retailing

Dont need college

Low pay
Long hours
Boring
Dead-end job
No benefits
Everyone is part-time
Unstable environment

PPT 1-41 Consumer Behavior Ignacio J. Vzquez E. 2007

 Why You Should Consider Retailing

Entry level management positions

-Department manager or assistant buyer/planner
-Manage and have P&L responsibility on your first job
Starting pay average with great benefits
- Some retailers pay graduate school
No two days are alike
Buying for financially oriented people
Management for people people

PPT 1-42 Consumer Behavior Ignacio J. Vzquez E. 2007

 Types of Jobs in Retailing

Most entry level jobs are in

store management or buying, but

retailers also have staff specialists:

--accounting and finance
--real estate
--human resource management
--supply chain management
--advertising
--public affairs
PPT 1-43 Consumer Behavior Ignacio J. Vzquez E. 2007
 Centro de Comercio Detallsita

www.gda.itesm.mx/ccd
ADMINISTRACIN DE MERCANCAS / PRECIOS: Aprenders el manejo de compras,
resurtidos e inventarios que realizan las empresas de comercio al detalle. Analizars
la tecnologa que est revolucionando el retail y estudiars la administracin y el
establecimiento de precios, as como el desarrollo y presentacin de lneas de
producto, dando especial atencin a las relaciones comprador-proveedor.
INTERNSHIP I Y II: Aplicars tus conocimientos dentro de una empresa detallista. en
el verano trabajars 7hrs. diarias por 5 semanas en una empresa de comercio al
detalle, en donde conocers las diferentes reas de la empresa y tendrs la
oportunidad de resolver algn problema o realizar un proyecto especfico.
ADMINISTRACIN DE LA TIENDA Y SERVICIO AL CLIENTE: Analizars los procesos
en el manejo y administracin de una tienda. Aprenders temas relacionados con
sistemas de informacin, recursos humanos, imagen y diseo de la tienda (visual
merchandising), servicio al cliente y CRM (Customer Relationship Management),
entre otros.
ESTRATEGIA DE COMERCIO DETALLISTA MULTICANAL: Conocers las estrategias
que siguen los principales detallistas y su implicacin en las ventas. Comprenders
la metodologa para la ubicacin de puntos de venta. Aplicars las estrategias de
publicidad y promocin que se utilizan en el comercio detallista. Adems,
aprenders la nueva tendencia en el retail de administracin por categoras.

PPT 1-44 Consumer Behavior Ignacio J. Vzquez E. 2007