PPT 1-1

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Introduction to Retail Marketing

PPT 1-2

Consumer Behavior

Ignacio J. Vázquez E. © 2007

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. Vázquez 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. Vázquez 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. Vázquez E. © 2007

How Retailers Add Value

Doll can be bought on credit or put on layaway

Doll is featured on floor display

Doll is offered in �convenient locations in quantities of one

Doll is developed in several styles

Doll is developed at manufacturer

The value of the product and service increases �as the retailer performs functions.

PPT 1-6

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Manufacturer’s Perspective

The Four P’s of Marketing

Distribution

Retailers are part of the

distribution channel

Retailers are part of the

distribution channel

Product

Price

Promotion

PPT 1-7

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Distribution Channel

PPT 1-8

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Retailers are a Business Like Manufacturers

PPT 1-9

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Decision Variables for Retailers

Customer Service

Store Design �and Display

Merchandise�Assortment

Communication� Mix

Location

Pricing

Retail

Strategy

PPT 1-10

Consumer Behavior

Ignacio J. Vázquez 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. Vázquez E. © 2007

Nature of Retail Industry is Changing

Mom and Pop Store

To Today’s Retailer

PPT 1-12

Consumer Behavior

Ignacio J. Vázquez 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. Vázquez 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. Vázquez 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. Vázquez E. © 2007

JC Penney’s 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. Vázquez 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. Vázquez 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. Vázquez E. © 2007

Hot Topic’s Retail Mix

Retail Strategy

Customer Service

Location

Merchandise

Assortment

Pricing

Communication

Mix

Store Design

And Display

PPT 1-19

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Hot Topic’s Retail Mix

Enclosed malls

Location Strategy

PPT 1-20

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Hot Topic’s Retail Mix

Many Different Hot Band

T-shirts and Accessories

Assortment Strategy

PPT 1-21

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Hot Topic’s Retail Mix

Modest with Sales

Pricing Strategy

PPT 1-22

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Hot Topic’s Retail Mix

Communication Mix

TV and �Magazine Ads

PPT 1-23

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Hot Topic’s Retail Mix

Store Design and Display

Heavy Metal, �Gothic Look

PPT 1-24

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Hot Topic’s Retail Mix

Customer Service

Modest

PPT 1-25

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Macy’s Retail Mix

Retail Strategy

Customer �Service

Location

Merchandise�Assortment

Pricing

Communication �Mix

Store Design�And Display

PPT 1-26

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Macy’s Retail Mix

Enclosed Malls

Location Strategy

PPT 1-27

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Macy’s Retail Mix

Many Items in �Apparel and �Soft Home

Assortment Strategy

PPT 1-28

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Macy’s Retail Mix

Moderate with� Frequent Sales

Pricing Strategy

PPT 1-29

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Macy’s Retail Mix

Communication Mix

TV, Newspaper Ads �and Special Events

PPT 1-30

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Macy’s Retail Mix

Store Design and Display

Ring with Displays

PPT 1-31

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Macy’s Retail Mix

Customer Service

Modest

PPT 1-32

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Wal-Mart’s Retail Mix

Retail Strategy

Customer �Service

Location

Merchandise�Assortment

Pricing

Communication �Mix

Store Design�And Display

PPT 1-33

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Wal-Mart’s Retail Mix

Free-standing Stores

Location Strategy

PPT 1-34

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Wal-Mart’s Retail Mix

Location

Pricing

Communication �Mix

Store Design� and Display

Customer �Service

Large Number �of Categories

Few Items �in Each Category

Assortment Strategy

PPT 1-35

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Wal-Mart’s Retail Mix

Low, EDLP

Pricing Strategy

PPT 1-36

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Wal-Mart’s Retail Mix

Communication Mix

TV and Newspaper�Insert Ads

PPT 1-37

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Wal-Mart’s Retail Mix

Store Design and Display

Basic, Special �Displays �for Products

PPT 1-38

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Wal-Mart’s Retail Mix

Customer Service

Limited

PPT 1-39

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Career Opportunities in Retailing�Start Your Own Business

• Walton Family (Wal-Mart)
• Fisher (The Gap)
• Wexner (Limited)
• Menard (Menard’s)
• Marcus, Blank (The Home Depot)
• Kellogg (Kohl’s)
• Schulze (Best Buy)
• Levine (Family Dollar)
• Gold (99Cent Only)

List of Retail Entrepreneurs on �Forbes 400 Richest Americans

PPT 1-40

Consumer Behavior

Ignacio J. Vázquez E. © 2007

Misconceptions About Careers in Retailing

• Don’t 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. Vázquez 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. Vázquez 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. Vázquez E. © 2007

Centro de Comercio Detallsita

• www.gda.itesm.mx/ccd
• ADMINISTRACIÓN DE MERCANCÍAS / PRECIOS: Aprenderás el manejo de compras, resurtidos e inventarios que realizan las empresas de comercio al detalle. Analizarás la tecnología que está revolucionando el retail y estudiarás la administración y el establecimiento de precios, así como el desarrollo y presentación de líneas de producto, dando especial atención a las relaciones comprador-proveedor. 
• INTERNSHIP I Y II: Aplicarás tus conocimientos dentro de una empresa detallista. en el verano trabajarás 7hrs. diarias por 5 semanas en una empresa de comercio al detalle, en donde conocerás las diferentes áreas de la empresa y tendrás la oportunidad de resolver algún problema o realizar un proyecto específico.  
• ADMINISTRACIÓN DE LA TIENDA Y SERVICIO AL CLIENTE: Analizarás los procesos en el manejo y administración de una tienda. Aprenderás temas relacionados con sistemas de información, recursos humanos, imagen y diseño de la tienda (visual merchandising), servicio al cliente y CRM (Customer Relationship Management), entre otros.  
• ESTRATEGIA DE COMERCIO DETALLISTA MULTICANAL: Conocerás las estrategias que siguen los principales detallistas y su implicación en las ventas. Comprenderás la metodología para la ubicación de puntos de venta. Aplicarás las estrategias de publicidad y promoción que se utilizan en el comercio detallista. Además, aprenderás la nueva tendencia en el retail de administración por categorías.   

PPT 1-44

Consumer Behavior

Ignacio J. Vázquez E. © 2007