Consumer Behavior Ignacio J. Vázquez E. © 2007: 5 Edition

5th Edition
PPT 1-1 Consumer Behavior Ignacio J. Vázquez E. © 2007

Chapter 1
Introduction to the
World of Retailing
McGraw-Hill/Irwin
Levy/Weitz:
PPT Retailing Management,
1-2 Consumer 5/e
Behavior Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
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.

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

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
How Retailers Add Value
The value of the product and service increases

as the retailer performs functions.
Doll can be bought

on credit or put on
layaway
Doll is featured on
floor display
Doll is offered in
convenient
locations in
Doll is developed in quantities of one
several styles
Doll is developed at
manufacturer
Manufacturer’s Perspective
The Four P’s of Marketing

Retailers
Retailersare
are part
part of
of the
the
distribution channel
distribution channel
Product
Distribution Price
Promotion

Distribution Channel
PPT 1-4
Distribution Channel

Retailers are a Business Like Manufacturers
Accounting Finance Marketing
Operations MIS Human Resources

Decision Variables for Retailers
Customer Service
Store Design Merchandise

and Display Assortment
Retail
Strategy
Pricing Location
Communication
Mix

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

Nature of Retail Industry is Changing
To Today’s Retailer
Mom and Pop Store

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

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

Retail Environment Differs Across the Globe
US Japan
Concentration High Medium
Store Size Big Small
Role of Low High

Wholesaling
Efficiency High Low

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 (?)
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
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
Hot Topic’s Retail Mix
Customer Service Location

Retail Strategy Assortment
And Display
Communication Pricing
Mix
Location Strategy
Enclosed malls
Customer
Service
Store Display Merchandise

And Design Assortment
Mix

Assortment Strategy
Customer
Service Location
Many Different
Store Design
and Display
Hot Band
T-shirts and
Communication
Pricing
Accessories
Mix

Location
Pricing Strategy
Customer
Merchandise
Service
Assortment
Store Design
and Display
Communication
Mix Modest with Sales

Customer
Service Location
Communication Mix Store Design

Merchandise
And Display
Assortment
Pricing
TV and
Magazine Ads

Store Design and Display
Customer
Service Location
Heavy Metal,
Merchandise
Gothic Look Assortments
Communication
Mix Pricing

Customer Service
Modest
Location
Merchandise
Assortment
Store Design
and Display Pricing
Communication
Mix

Macy’s Retail Mix
Customer
Location
Service

And Display Retail Strategy Assortment
Pricing
Communication
Mix
Macy’s Retail Mix
Location Strategy
Enclosed Malls
Customer
Service

Mix

Macy’s Retail Mix
Assortment Strategy
Customer
Service Location
Store Design
and Display
Many Items in
Apparel and
Communication
Soft Home
Mix Pricing

Macy’s Retail Mix
Location
Pricing Strategy
Customer
Merchandise
Service
Assortment
Store Design
and Display
Communication
Mix
Moderate with
Frequent Sales

Macy’s Retail Mix
Customer
Service Location
Communication Mix Store Design

And Display Merchandise
Assortment
Pricing
TV, Newspaper Ads

and Special Events

Macy’s Retail Mix
Customer
Service Location
Ring with Displays Merchandise

Assortments
Communication
Mix Pricing

Macy’s Retail Mix
Customer Service
Modest
Location
Merchandise
Assortment
Store Design
and Display Pricing
Communication
Mix

Wal-Mart’s Retail Mix
Customer Location
Service

And Display Retail Strategy Assortment
Mix

Location Strategy
Free-standing Stores
Customer
Service

Communication
Mix Pricing

Assortment Strategy
Customer
Service Location
Large Number
Store Design
and Display
of Categories
Few Items
Communication
Mix Pricing
in Each Category

Location
Pricing Strategy
Customer
Merchandise
Service
Assortment
Store Design
and Display
Communication
Mix Low, EDLP

Customer
Service Location
Communication Mix
and Display Assortment
Pricing
TV and Newspaper
Insert Ads

Customer
Service Location
Basic, Special
Merchandise
Displays Assortments
for Products
Communication
Mix Pricing

Customer Service
Limited
Location
Merchandise
Assortment
Store Design
and Display Pricing
Communication
Mix

Career Opportunities in Retailing
Start Your Own Business
List of Retail Entrepreneurs on
Forbes 400 Richest Americans
• 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)
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

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

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
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.

Consumer Behavior Ignacio J. Vázquez E. © 2007: 5 Edition

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5th Edition

PPT 1-1 Consumer Behavior Ignacio J. Vázquez E. © 2007

• Retailing – a set of business activities that

• A retailer is a business that sells products

PPT 1-3 Consumer Behavior Ignacio J. Vázquez E. © 2007

• Firms that are retailers and wholesalers that

PPT 1-4 Consumer Behavior Ignacio J. Vázquez E. © 2007

The value of the product and service increases

Doll can be bought

The Four P’s of Marketing

PPT 1-7 Consumer Behavior Ignacio J. Vázquez E. © 2007

PPT 1-8 Consumer Behavior Ignacio J. Vázquez E. © 2007

Accounting Finance Marketing

Operations MIS Human Resources

PPT 1-9 Consumer Behavior Ignacio J. Vázquez E. © 2007

Store Design Merchandise

PPT 1-10 Consumer Behavior Ignacio J. Vázquez E. © 2007

• Over $2.5 trillion in annual U.S. sales

• Employs 17% of population

• Management training opportunities

PPT 1-11 Consumer Behavior Ignacio J. Vázquez E. © 2007

Mom and Pop Store

PPT 1-12 Consumer Behavior Ignacio J. Vázquez E. © 2007

- 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

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

Store Size Big Small

Role of Low High

Efficiency High Low

PPT 1-15 Consumer Behavior Ignacio J. Vázquez E. © 2007

• Main Street private label soft goods retailer

• Large number of merchandise categories --

Strategy - organic and natural

Customer Service Location

Store Design Merchandise

Store Display Merchandise

PPT 1-20 Consumer Behavior Ignacio J. Vázquez E. © 2007

PPT 1-21 Consumer Behavior Ignacio J. Vázquez E. © 2007

PPT 1-22 Consumer Behavior Ignacio J. Vázquez E. © 2007

Communication Mix Store Design

PPT 1-23 Consumer Behavior Ignacio J. Vázquez E. © 2007

Store Design and Display

PPT 1-24 Consumer Behavior Ignacio J. Vázquez E. © 2007

PPT 1-25 Consumer Behavior Ignacio J. Vázquez E. © 2007

Store Design Merchandise

Store Display Merchandise

PPT 1-27 Consumer Behavior Ignacio J. Vázquez E. © 2007

PPT 1-28 Consumer Behavior Ignacio J. Vázquez E. © 2007

PPT 1-29 Consumer Behavior Ignacio J. Vázquez E. © 2007

Communication Mix Store Design

TV, Newspaper Ads

PPT 1-30 Consumer Behavior Ignacio J. Vázquez E. © 2007

Store Design and Display

Ring with Displays Merchandise

PPT 1-31 Consumer Behavior Ignacio J. Vázquez E. © 2007

PPT 1-32 Consumer Behavior Ignacio J. Vázquez E. © 2007

Store Design Merchandise