Identify retailers in terms of the utilities they provide.
Retailers provide time, place, form, and possession utilities. Time utility is provided by stores with convenient time-of-day (e.g., open 24 hours) or time-of-year (e.g., seasonal sports equipment available all year) availability. Place utility is provided by the number and location of the stores. Possession utility is provided by making a purchase possible (e.g., financing) or easier (e.g., delivery). Form utility is provided by producing or altering a product to meet the customer's specifications (e.g., custom-made shirts).
Explain the alternative ways to classify retail outlets.
Retail outlets can be classified by their form of ownership, level of service, and type of merchandise line. The forms of ownership include independent retailers, corporate chains, and contractual systems that include retailer-sponsored cooperatives, wholesaler-sponsored voluntary chains, and franchises. The levels of service include self-service, limited-service, and full-service outlets. Stores classified by their merchandise line include stores with depth, such as sporting good specialty stores, and stores with breadth, such as large department stores.
Describe the many methods of nonstore retailing. Nonstore retailing includes automatic vending, direct mail and catalogs, television home shopping, online retailing, telemarketing, and direct selling.
The methods of nonstore retailing vary by the level of involvement of the retailer and the level of involvement of the customer. Vending, for example, has low involvement, whereas both the consumer and the retailer have high involvement in direct selling.
Classify retailers in terms of the retail positioning matrix.
The retail positioning matrix positions retail outlets on two dimensions: breadth of product line and value added. There are four possible positions in the matrix. Stores such as Bloomingdale's have a broad product line and high value added. Stores such as Wal-Mart also have a broad product line but have low value added because they offer fewer services. Tiffany & Co. represents a narrow product line and high value added. Finally, stores such as Payless ShoeSource offer a narrow product line and low value added.
Develop retailing mix strategies over the life cycle of a retail store.
The retail life cycle describes the process of growth and decline for retail outlets through four stages: early growth, accelerated development, maturity, and decline. The retail mix—pricing, store location, communication, and merchandise—can be managed to match the retail strategy with the stage of the life cycle. The challenge facing retailers is to delay entering the decline stage, where market share and profit fall rapidly.
