Retail Sales

1
Retail Sales

• 30 Million Americans involved
• 16 Million in service businesses like barber
  shops, law offices
• Most Retailers involved in small business
• Half of retail sales come from 10 of the retail
  business (giant retailers)

2
Retail Strategy
WHAT
TO SALE OR PRODUCE
WHO
TARGET MARKET DEMOGRAPHICS
HOW
WHERE
Location
Product Offering
PRICE
PROMOTIONAL STRATEGY
High price quality Off price retailer
CREATE IMAGE
3
Retail Image

• Employee type and density
• Merchandise type Density
• Fixture type density
• Sounds
• Odors

4
Types of Retailers

• In-store
• department store
• specialty store
• variety store
• convenience store
• supermarket
• discount store
• factory outlet
• hypermart

• Non-store
• vending machine
• direct selling
• direct-response marketing
• home shopping network
• e-commerce

5
Wall-Mart

• Can Wal-Mart be the first 1 trillion dollar
  retail company.
• 1 trillion dollar company
• A corporation with
• 5 million employees nearly half of the total
  number of people in the US Armed Forces during
  WWII and more people than currently employed by
  the US federal government.
• Revenues that are on the scale of UK, and in
  excess of GDP of such countries as Australia,
  Canada and 10 of the entire US economy
• Worlds largest private employer
• History
• First store opened 1945 with 72,000 in rev
• 2nd store 1952
• 1977 Wal-Mart had 30 Billion in Revenues
• 1977 David Glass CEO
• Current annual growth rate 16
• 1998 Revenues equaled 125 billion

6
Wall-Mart

• If Wal-Mart were to maintain its average growth
  rate from the past 10 year, it would become the
  first 1 trillion company.
• Core trait Wal-Mart exists to enable people of
  average means to buy more of the same things
  previously available only to rich folks.
• Wal-Mart uses its power to extract lower prices
  from suppliers and then passing those savings
  along to customers.
• Never think of your company as great, no matter
  how much successful it becomes.

7
Wall-Marts bad side

• Two guiding principles for all managers
• extract the very last penny possible from human
  toil
• Squeeze the last dime from every supplier
• The Employees
• Average full time employee earns 15.000.
• Full time 28 hrs per week
• Health care benefits after 2 years
• Only 38 have health care benefits
• Wal-Mart does not have unions
• 72 of the salespeople are women
• Violations of Worker's compensation laws (1,400
  in Maine alone)
• China Connection
• 2001 moved its worldwide purchasing headquarters
• Largest importer of Chinese-made products in the
  world - 10 million dollars, 71 of toys
• Chinas minimum wage .31 per hr. Wal-Mart pays
  .13 per hour.
• Imposes long mandatory-overtime shifts
• Arbitrary firing of workers
• No health or safety enforcement.

8
Wall-Marts bad side

• Vendors
• More than 65,000 companies are vendors
• Demands lowball prices from suppliers that they
  can only meet if they follow Wal-Mart to China
• Some companies have to open their books to
  Wal-Mart
• Eliminate unnecessary costs
• Compares China to other manufactures
• Competitors
• Wal-Mart slashes its retail prices below cost and
  then raises prices once it has monopoly control
  over the market.
• Eliminates three jobs for every two Wal-Mart
  creates
• Communities
• Do not take the cultural differences into
  consideration.
• More and more communities are rising civic
  rebellion against Wal-Mart.
• To thwart the expansionist of Wal-Mart

9
Trends in Distribution

• Increase in stocklifting practice
• purchasing all of a competitors products
  replacing it with their own
• CAM International sells stocklifted automotive
  parts to wholesalers at 30-75 discount (Source
  CAM International, www.caminternational.com)
• Growth in service distribution
• minimize waiting, increase capacity, new
  distribution channels

10
Using IntegratedMarketing Communicationsto
Promote Products

• Chapter 16

11
Promotional Goals

• Defined the attempt by marketers to inform,
  persuade, or remind consumers and industrial
  users to engage in the exchange process.
• Includes creating an awareness
• Getting people to try the product
• Providing product information
• Retaining customers
• Increasing the amount and frequency of use
• Identifying target customers

12
Components of Promotional Mix

• 1. Advertising any paid form of non-personal
  promotion by an identified sponsor
• 2. Personal selling Face-to-face presentation to
  a prospective buyer.
• 3. Sales promotion
• includes coupons, free samples, demonstrations
• 4. Public relations linking organizational
  goals with key aspects of the public interest
  and the development of programs designed to earn
  public understanding and acceptance

13
Advertising

• Define - any paid form of non-personal promotion
  by an identified sponsor
• product features a specific good/service
• comparative compares product to competition
• reminder keep product in publics mind
• institutional/brand establish image
• Advertising Media
• Types of media
• newspaper, magazine, radio, television, outdoor
  advertising, direct mail, Internet
• Factors influencing choice of media
• cost
• audience reached
• (Strengths/Weakness see page 476)

14
Personal Selling

• Define - A face-to-face presentation to a
  prospective buyer
• Personal selling usually follows a formal sales
  cycle
• Steps of the Selling Process
• 1. Prospecting and qualifying
• 2. Approaching customers
• 3. Presenting and demonstrating
• 4. Handling objections
• 5. Closing the sale
• 6. Following up the sale

15
Sales Promotional Goals Dependon Type of
Customer
Define - marketing activities that stimulate
consumer buying, including coupons and samples,
displays, shows and exhibitions, demonstrations,
and other types of selling efforts