Retail Final Notes PDF

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Notes taken for the final exam from both the book and lectures....

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CHAPTER 5 – RETAIL MARKET STRATEGY RETAIL STRATEGY: how retailer deals with customers-environment-competition 1. TARGET MARKET SEGMENT 2. RETAIL FORMAT (how to meet customer’s needs) 3. SUSTAINABLE COMPETITIVE ADVANTAGE RETAIL MARKET: customers with similar needs; retailers that meet these needs similarly. Based on demographics, lifestyle, location. SUSTAINABLE COMPETITIVE ADVANTAGE: maintaining a position in the market. Approaches: - CUSTOMER LOYALTY: committed to buy from specific retailer o BRAND IMAGE: assures same quality and satisfaction; creates emotional trust. o POSITIONING: image of the brand in the customer’s mind next to competition; created by using the RETAIL MIX. o UNIQUE MERCHANDISE: provide different merchandise (private label) o CUSTOMER SERVICE: excellent treatment -

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o LOYALTY PROGRAMS (Customer Relationship management): rewards STRONG RELATIONSHIP WITH VENDORS/SUPPLIERS o Develop beneficial assets and programs that give advantage EFFICIENT INTERNAL OPERATIONS o Cost advantage over competitors o Offer customers more benefits than competitors at the same cost LOCATION: Not easily duplicated

● Perceptual map: graphic image of customer’s retailer preference; distance means how similar retailers are. ● Cross-selling: sales associate moves through departments ● VERTICAL INTEGRATION: Retailer moves to wholesale or manufacturing ● Mission Statement: objectives and principals GROWTH STRATEGIES: 1. MARKET PENETRATION: SAME TARGET – SAME FORMAT o Used to get more people in the store o More store hours, more stores, merchandise display used to increase sales 2. MARKET EXPANSION: NEW MARKET – SAME FORMAT 3. RETAIL FORMAT DEVELOPMENT: SAME TARGET – DIFFERENT FORMAT 4. DIVERSIFICATION: NEW TARGET – NEW FORMAT

CHAPTER 10 – INFORMATION SYSTEMS AND SUPPLY CHAIN MANAGEMENT DISTRIBUTION CENTER: Warehouse that receives merchandise from multiple vendors and distributes it. SUPPLY CHAIN MANAGEMENT: Activities to efficiently manage the flow of merch from vendors to customers. - BENEFITS (lead to more sales, lower costs, more turnover, less MDs): o FEWER STOCKOUTS o TAILORED ASSORTMENTS o HIGHER RETURN ON ASSETS: because more sales = more profit without more inventory - OBJECTIVES: o Minimize investments in inventory cots so it’s available at the right time UPC – UNIVERSAL PRODUCT CODE: bar code used to collect data at POS and inform buyers. ASN – ADVANCED SHIPPING NOTICE: tells DC what is being shipped and when will be delivered. DATA WAREHOUSE: Data collected at POS EDI – ELECTRONIC DATA EXCHANGE: computer-to-computer exchange of documents. ● Security policy objectives: authentication – authorization – integrity ● Floor ready merchandise: ready to be in stores ● Pick ticket: doc that tells the order filler # of items to get to the storage LOGISTICS: Planning, implementing and controlling efficient flow of goods and services. REVERSE LOGISTICS: Moving returned items back to vendors. BULLWHIP EFFECT: uncoordinated channels cause buildup  of inventory - CAUSED BY: o Delays in sending/receiving orders o Overreacting to shortages (re-ordering too much) o Order in large batches - REDUCE IT BY: o USING EDI o SHARING INFO o VENDOR MANAGED INVENTORY o EMPLOYING COLLABORATIVE PLANNING, FORECASTING AND REPLENISHMENT

VMI - VENDOR MANAGED INVENTORY: VENDOR responsible for maintaining inventory levels - Determines a reorder point and shares data via EDI CPFR - COLLABORATIVE PLANNING, FORECASTING AND REPLENISHMENT: advanced collaborative vendor-retailer system to share information RFID – RADIO FREQUENCY IDENTIFICATION: Tech that identifies person/object by radio waves - ELIMINATES SCANNING - MORE DATA CAPACITY - IT UPDATES AUTOMATICALLY – REAL TIME INVENTORY LEVELS - REDUCE THEFT

CHAPTER 16 – MANAGING THE STORE JOB DESCRIPTION: activities employee needs to perform JOB ANALYSIS: assigning the right person with the skills to the job TITLE VII OF CIVIL RIGHTS: Prohibits discrimination based on race/origin/gender ● Disparate treatment: discrimination to minorities ● ADA – AMERICAN DISABILITY ACT: Law protecting disabled ● Employees feel motivated when: o Their efforts help achieve manager’s goals o Rewards when achieving goals ▪

EXTRINSIC REWARD: money-promotion-recognition

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A LA CARTE PLANS: based on employees desires

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INTRINSIC REWARDS: non monetary

EMPLOYEE SOCIALIZATION: committing new employees to the firm COMPENSATION PLANS: - STRAIGHT SALARY: fixed $ - INCENTIVE COMPENSATION (Commission): based on productivity - DRAWING ACCOUNT: sales compensation – weekly check - QUOTA BONUS PLAN: performance goal reward LEADERSHIP: influencing

AUTOCRATIC: manager makes decisions then communicates it DEMOCRATIC: decisions based on opinions INVENTORY SHRINKAGE: reduction of inventory caused by theft/misplacing

CHAPTER 17 – STORE LAYOUT/DESIGN OBJECTIVES: - Implement retailer’s strategy - Build loyalty by providing experience - Increase sales - Control costs - Meet legal standards UTILITARIAN BENEFITS: locate easily products without hassle HEDONIC BENEFITS: focused on experience GRID LAYOUT: Long GONDOLAS in aisles; supermarket; cost efficient; utilitarian RACETRACK LAYOUT – LOOP: MAJOR AISLE  to facilitate customer traffic; see all merchandise FREE FORM LAYOUT: ASSYMETRICAL AISLES ; specialty stores; relaxing shopping experience; reduced merchandise SALES PER SQ FOOT: Measure of space productivity END CAPS: Display fixture at the end of the aisle FREIGHT FOWARDERS: purchase transport services; consolidate small shipments into larger for smaller cost CROSS-DOCKING: Items unloaded from shipper’s truck and put into store DROP SHIPPING: retailer receives orders; sends to vendor; vendor to consumer RECEIVING: Fill forms to record receipt of merchandise PULL SUPPLY STRATEGY: restock based on data at POS; less overstock

PUSH SUPPLY STRATEGY: stock based on historical data...