Test 1 vocab PDF

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All the vocabulary from the book for test 1. Fold paper to put terms on one side and definitions on the other...

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Test 1 vocab retailing retailer vertical integration backward integration forward integration breaking bulk intratype competition scrambled merchandising intertype competition retail strategy

retail mix NAICS

variety assortment breadth of merchandise depth of merchandise SKU conventional supermarket limited assortment supermarket extreme value food retailer

the set of business activities that adds value to products and services sold to customers for their personal or family use a business that sells products and/or services to consumers for their personal or family use a firm performs more than one set of activities in the channel (retailers operating their own distribution centers) a retailer performs some wholesaling and manufacturing activities (retailers operate warehouses) manufacturer undertakes retailing and wholesaling activities (Apple operating its own retail stores) when retailers offer products in smaller quantities tailored to individual consumers’ and households’ consumption pattern competition between the same type of retailers when retailers offer merchandise not typically associated with their type of store competition among retailers that sell similar merchandise using different types of retail outlets—drug & department stores 1. identifies the target market 2. the nature of the merchandise and how the target market will be satisfied 3. how the retailer will develop unique assets that enable it to achieve long-term advantage over its competitors a set of decisions retailers make to satisfy customer needs and influence their purchase decisions North American Industry Classification System—a classification scheme developed by USA, Canada, Mexico to collect data on business activity in each country the number of merchandise categories a retailer offers the number of different items offered in a merchandise category variety assortment stock-keeping unit; each different item of merchandise a large, self-service retail food store offering groceries, meat, and produce as well as some nonfood items such as health, beauty aids, and general merchandise—30,000 SKUs 1500 SKUs, lots of self/service ex Save-A-Lot & ALDI same as limited assortment supermarket

supercenter

large stores, 160K-200K sq ft, that combine a supermarket with a full-line discount store (Walmart, Super Target) hypermarket large (160K-200K sq ft); 60-70% food, 30-40% general merchandise, fewer SKUS than supercenters warehouse club retailers that offer a limited and irregular assortment of food and general merchandise with little service at low prices for ultimate consumers and small businesses (Costco, Sam’s Club) convenience store limited assortment, 3,000-5,000 sq ft stores, speedy checkout, high prices department store retailers that carry a broad variety and deep assortment, offer customer service, and organize their stores into distinct departments for displaying merchandise (Macy’s) soft goods nondurable or consumable goods (cosmetics, clothing, bedding) hard goods manufactured items that are expected to last several years durable goods same as hard goods full-line discount broad variety of merchandise, limited service, low prices store (Walmart, Kmart, Target) specialty store limited number of complementary merchandise & high service (stores you’d find at the mall) thrift store specialty store where merch is donated and proceeds go to charity consignment specialty store that accepts used merchandise from people and shop pays them after it’s sold category specialist category killer offer a complete assortment in a category (Home Depot, Staples) extreme value small discount stores that offer a broad variety but shallow retailer assortment of household goods, health & beauty care products, and groceries (Dollar General, Family Dollar) dollar store extreme value retailer off-price retailer offer an inconsistent assortment of brand-name merchandise at a significant discount off the MSRP (HomeGoods, TJ Maxx) closeout retailer end-of-season merchandise that will not be used in next season outlet store off-price retailers owned by manufacturers or retailers factory outlet outlet store owned by manufacturers service retailers primarily sell services rather than merchandise retail chain a company that operates multiple retail units under commmon ownership and usually has centralized decision making for defining and implementing its strategy (Walmart, Best Buy) franchising a contractual agreement in which the franchisor (company) sells the rights to use its business trademark, service mark, or trade name, or another commercial symbol of the company to the franchisee for a one time franchise fee and ongoing royalty fee, typically expressed as a percentage of gross monthly sales multichannel using more than one channel to sell and deliver merchandise and retailing services to customers

omniretailing retail channel internet retailing mobile retailing catalog channel

live chat channel migration showrooming

buying process unsatisfied needs internal sources external sources information search every day low prices satisfaction post-purchase evaluation extended problem solving financial risks social risks physical risks limited problem solving impulse buying unplanned purchasing habitual decision

a coordinated multichannel retail offering that provides a seamless customer experience when using all of the retailer’s shopping channels the way a retailer sells and delivers merchandise and services to its customers fastest growing channel; retailer interacts w customers via web accessing the internet using a smartphone nonstore retail channel in which the retail offering is communicated to customers through a catalog mailed to customers customers can have an instant messaging convo with a customer service representative when a customer gathers info from one of its channels, then buys from a channel hosted by a competitor occurs when a consumer goes into a store to learn about different brands and products and then searches the internet for the same product at a lower price the steps consumers go through when buying a product/service a customer’s desired level of satisfaction differs from their present level of satisfaction information in a customer’s memory (names, images, past experiences) with different stores info provided by a host of sources (advertising, other people) depends on the value customers believe they can gain from searching vs the cost of searching assures customers that they won’t find the same product for a cheaper price somewhere else postconsumption evaluation of how well a store or product meets or exceeds customer expectations ^^ becomes part of a customer’s internal information and affects store and product evaluations and purchase decisions a purchase decision process in which sucstomers devote considerable time and effort to analyze their alternatives arise when a customer purchases an expensive product/service arise when customers believe a product will affect how others view them when customers feel that a product or service may affect their health or safety a purchase decision process involving a moderate amount of effort and time a buying decision made by customers on the spot after seeing the merchandise same as impulse buying purchase decision process involving little or no conscious effort

making brand loyalty retailer loyalty reference group store advocates culture retail market segment actionable identifiable substantial reachable geographic segmentation demographic segmentation lifestyle psychographics lifestyle segmentation benefit segmentation retail strategy

target market retail format sustainable competitive advantage retail market market penetration G.O cross-selling

customers like and buy a specific brand in a product category customers like and habitually visit the same retailer to purchase a type of merchandise includes one or more people whom a person uses as a basis of comparison for beliefs, feelings, and behaviors customers who like a store so much that they actively share their positive experiences with friends and family the meaning, beliefs, morals, and values shared by most members of a society a group of customers who are attracted to the same retail mix because they have similar needs the retailer should know what to do to satisfy needs for the consumers in the segment the retailer is able to determine which customers are in the market segment the market is big with significant buying power the retailer can target promotions and other elements of the retail mix to consumers in the segment groups customers according to where they live groups consumers on the basis of easily measured, objective characteristics such as age, gender, income, and education refers to how people live, how they spend their time and money, what activities they pursue, attitudes, etc same as lifestyle uses VALS survey to classify consumers into 8 segments grouping consumers seeking similar benefits a statement identifying the retailer’s target market, the format and resources the retailer plans to use to satisfy the target market’s needs, and the bases on which the retailer plans to build a sustainable competitive advantage the market segment toward which the retailer plans to focus its resources and retail mix the nature of the retailer’s operations—its retail mix an advantage that the retailer has over its competition that is not easily copied by competitors and thus can be maintained over a long period of time a group of consumers with similar needs and a group of retailers that satisfy those needs using a similar retail channel & format (G.O.= growth opportunity) same retailing format, same customers —approaches to get people to come back more often sales associates in one department attempt to sell complementary

market expansion G.O. retail format development G.O diversification G.O. strategic retail planning process mission statement SWOT analysis strengths and weaknesses analysis opportunities and threats analysis barriers to entry scale economies bargaining power of vendors competitive rivalry return on assets net sales

gross margin gross profit operating expenses net profit margin assets debt-to-equity ratio liabilities current ratio quick ratio acid-test ratio top-down planning bottom-up planning

merchandise from other departments to their customers same retailing format, new customers new retailing format, same customers new retailing format, new customers set of steps a retailer goes through to develop a strategy and plan a broad description of a retailer’s objectives and the scope of activities it plans to undertake an analysis of the retailer’s internal & external environment analysis of: financial resources, customer loyalty, locations, HR, staff and systems, vendor relationships, etc factors associated with the market, competition, and environment dynamics that are typically beyond the retailer’s control conditions in a retail market that make it difficult for other firms to enter the market cost advantages due to a retailer’s size only a few vendors control the merchandise sold in the market so they have the opportunity to dictate prices and other terms the frequency and intensity of reactions to actions undertaken by competitors the profit generated by the assets possessed by the firm the total revenues received by a retailer that are related to selling merchandise during a given time period minus returns, discounts, and credits for damaged merchandise the net sale minus the cost of goods sold same as gross margin selling, general, and administrative expenses—overhead costs associated with normal business operations the operating profit margin minus interest, taxes, and depreciation economic resources owned or controlled by a firm the retailer’s short- and long-term debt divided by the value of the owners’ or stockholders’ equity in the firm a company’s debts, which is the $ it owes its vendors for merch short term assets divided by short term liabilities short term assets less inventory divided by short term liabilities same as quick ratio goals get set at the top of the organization and are passed down to the lower operating levels lower levels in the company developing performance objectives that are aggregated up to develop overall company objectives

input measures output measures productivity measure

resources or money allocated by a retailer to achieve outputs or results assess the results of a retailer’s investment decisions the ratio of an output to an input; determines how effectively retailers use their resources; returns on investment in inputs...