Chapter 14 Review PDF

1 Iyania Messinga Professor Holmes MK341A 09 November 2023 Chapter 14 Review Retailing involves the sale of products to ultimate consumers for personal, family, or household use. Retailers play an important role in the economy by providing services, making product selections easier, and facilitatin...

1 Iyania Messinga Professor Holmes MK341A 09 November 2023 Chapter 14 Review Retailing involves the sale of products to ultimate consumers for personal, family, or household use. Retailers play an important role in the economy by providing services, making product selections easier, and facilitating comparison shopping. Retailing is now done through multiple channels, including online and brick-and-mortar stores. General-merchandise retailers include department stores, discount stores, convenience stores, supermarkets, superstores, hypermarkets, warehouse clubs, and warehouse showrooms. Online retail sales are increasing and now account for 13% of total retail sales in the United States. Brick-and-mortar retailers include department stores, discount stores, convenience stores, supermarkets, superstores, hypermarkets, warehouse clubs, and warehouse showrooms. Department stores are large retail organizations characterized by a wide product mix and are service-oriented. Discount stores offer brand-name and private-brand products at low prices with lower profit margins. Convenience stores are small and open long hours, stocking about 500 items. Supermarkets are large, self-service stores with a complete line of food products and some non-food products. Superstores are giant retail outlets that carry food and non-food products, along with services such as dry cleaning and automotive repair. Hypermarkets are larger than superstores and offer 45,000 to 60,000 different types of low-priced products. Warehouse clubs 2 are members-only establishments that combine features of cash-and-carry wholesaling with discount retailing. Warehouse showrooms are low-cost buildings with large inventories and minimal services. Specialty retailers offer narrow but deep product lines and are often referred to as limited-line or single-line retailers. Category killers are a type of specialty store that compete on low prices and product availability. Off-price retailers offer limited lines of national-brand and designer merchandise at discounted prices but often lack customer services. Location is an important strategic decision for retailers and affects the limited geographic trading area from which a store draws its customers. Shopping centers range from neighborhood to super regional and lifestyle, and power centers are a combination of off-price stores and category killers. Specialty retailers focus on narrow and deep assortments rather than specialty items, and they may be referred to as limited-line or single-line retailers. Traditional specialty retailers typically offer shopping products such as apparel, jewelry, sporting goods, fabrics, computers, and pet supplies. Category killers are very large specialty stores that compete on the basis of low prices and product availability, and off-price retailers buy manufacturers' seconds, overruns, returns, and off-season merchandise for resale at deep discounts. Strategic issues in retailing include location of stores, which is an important strategic decision that dictates the limited geographic trading area from which a store draws its customers. Different types of shopping centers include neighborhood, community, regional and superregional, lifestyle, and power centers. Franchising is an arrangement in which a supplier (franchisor) grants a dealer (franchisee) the right to sell products in exchange for consideration, such as a percentage of total 3 sales in exchange for equipment, buildings, management know-how, and marketing assistance. Franchising has become increasingly popular due to changes in the international marketplace, the U.S. service economy, and corporate interest in joint-venture activity. The advantages for the franchisee include limited capital, business experience, lower failure rates, access to guidance and advice, and materials for local advertising. Advantages for the franchisor include fast product distribution, motivated franchisees, and higher income. Disadvantages for the franchisee include having to abide by the provisions of the franchise agreement, paying to use the franchisor's name, and having to work long hours. Disadvantages for the franchisor include giving up control and individual establishments not being operated to the franchisor's standards. Retail technologies and positioning are also important strategic issues in retailing, as consumers expect convenience, information, and a seamless experience across platforms, and retailers must identify unserved or underserved market segments. Store image is also important, as retailers use elements such as music, color, and layout to influence customer attention. Category management is a retail strategy of managing groups of similar products produced by different manufacturers. It is used to allocate space in supermarkets for their many product categories and improve sales and customer satisfaction. Direct marketing is the use of telephone, internet and nonpersonal media to introduce products to customers, who can then purchase them via mail, telephone or online. Direct selling is marketing products to ultimate consumers through face-to-face sales presentations. Vending is the use of machines to dispense products and requires a small amount of space with no sales personnel needed. Wholesaling is the transactions in which products are bought for resale, for making other products or for general business operations and can provide services to both producers and retailers. Merchant 4 wholesalers are independently owned businesses that take title to goods and provide services to customers. Full-service wholesalers are merchant wholesalers that perform the widest range of wholesaling functions. Agents, brokers, manufacturers' agents, selling agents, and commission merchants are all intermediaries used in wholesaling. They all represent either buyers or sellers and negotiate purchases and expedite sales in exchange for a commission, which is based on the product's selling price. Each intermediary type provides a different set of services, such as physical possession of merchandise, long-term relationship with buyers or sellers, representation of competing product lines, limited geographic territory, credit to customers, and delivery of merchandise to customers. Additionally, manufacturers may set up their own sales branches or offices to perform wholesaling and physical distribution activities, in order to reach customers more effectively and strengthen supply chain efficiency.