Retail Marketing Assignment Week 1

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Walmart Stores, Inc., with its first discount department store in 1962, currently operates retail stores in various formats around the world and is committed to saving people money so they can live better. Currently, the company’s operations comprise three reportable business segments: the Walmart U.S. segment, the Walmart International segment, and the Sam’s Club segment. Target Corporation was incorporated in Minnesota in 1902. The company operates as three reportable segments: U.S. Retail, U.S. Credit Card, and Canadian.

Write a minimum 2-page report answering the following:

  1. Discuss why Walmart has been growing more rapidly than Target over the last decade. Do you see this trend continuing? Explain your rationale. 
  2. Develop a summary of the mission and corporate culture of these two retailers. Note a corporate culture reflects the core values, norms, and behaviors that reflect how it behaves toward employees, customers and suppliers.

Note the above questions require you to do additional research on these two retailers. Research the library’s LIRN Databases for more information on the 2 companies. Base your answers on facts and actual financial results.

Chapter 2

Retail Strategic Planning and Operations Management

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Objectives

Explain why strategic planning is important and describe the components of strategic planning

Describe the retail strategic planning and operations management model

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

2

Components of Strategic Planning (1 of 2)

Strategic planning: Adapting the resources of the firm to the opportunities and threats of an ever-changing retail environment

Through the proper use of strategic planning, retailers hope to achieve and maintain a balance between resources available and opportunities ahead

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Components of Strategic Planning (2 of 2)

Development of a mission statement for the firm

Definition of specific goals and objectives for the firm

S W O T analysis

Development of strategies that will enable the firm to reach its objectives and fulfill its mission

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Mission Statement

Basic description of the fundamental nature, rationale, and direction of the firm

Elements of a mission statement

How the retailer uses or intends to use its resources

How it expects to relate to the ever-changing environment

The kinds of values it intends to provide in order to serve the needs and wants of the consumer

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Statement of Goals and Objectives (1 of 2)

Provide:

Specific direction and guidance to the firm in the formulation of its strategy

A control mechanism by establishing a standard against which the firm can measure and evaluate its performance

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Statement of Goals and Objectives (2 of 2)

Dimensions

Market performance

Financial performance

Societal objectives

Personal objectives

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Market Performance Objectives

Establish the amount of dominance the retailer seeks in the marketplace

Market share: Retailer’s total sales divided by total market sales

High sales growth retailing is directly linked to expanding the size of the retail stores

Disney

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Exhibit 2.1 – The Market Share-Profitability Relationship

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Financial Objectives (1 of 2)

Profit-based objectives: Deal directly with the monetary return a retailer desires from its business

Profit – Aggregate total of net profit after taxes

Profit can be expressed as a percentage of net sales

It can also be defined in terms of return on investment (R O I)

Stockouts: Products that are out of stock and unavailable to customers when required

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Exhibit 2.2 – Elements of Strategic Profit Model

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Financial Objectives (2 of 2)

Productivity objectives: State the sales objectives that the retailer desires for each unit of resource input

Space productivity – Net sales divided by the total square feet of retail floor space

Labor productivity – Net sales divided by the number of full time-equivalent employees

Merchandise productivity – Net sales divided by the average dollar investment in inventory

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Societal Objectives (1 of 2)

Reflect the retailer’s desire to help society fulfill some of its needs

Employment objectives – Provision of employment opportunities for the members of the retailer’s community

Payment of taxes – Helping finance societal needs that the government deems appropriate

Consumer choice – Provide the consumer with choices that previously were not available in the trade area

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Societal Objectives (2 of 2)

Equity – Retailer’s desire to treat the consumer and suppliers fairly

Being a benefactor – Retailer may desire to underwrite certain community activities

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Personal Objectives

Reflect the retailers’ desire to help individuals employed in retailing fulfill some of their needs

Self-gratification – Focuses on the needs and desires of the owners, managers, or employees of the enterprise

Status and respect – Recognizes that the owners, managers, and employees need status and respect in their community

Power and authority – Need of managers and other employees to be in positions of influence

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Strategies (1 of 3)

Carefully designed plan for achieving the retailer’s goals and objectives

Retailers can operate with three strategies

Get shoppers into the store

Convert these shoppers into customers by having them purchase merchandise

Implement the above two strategies at the lowest operating cost possible that is consistent with the level of service that customers expect

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Strategies (2 of 3)

Forms of differentiation for a retailer

Outstanding design of the market offering

The selling process

After-purchase satisfaction

Location

Never being out of stock

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

S W O T Analysis (1 of 4)

Strengths:

What major competitive advantage(s) do we have?

What are we good at?

What do customers perceive as our strong points?

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

S W O T Analysis (2 of 4)

Weaknesses

What major competitive advantage(s) do competitors have over us?

What are competitors better at than we are?

What are our major internal weaknesses?

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

S W O T Analysis (3 of 4)

Opportunities

What favorable environmental trends may benefit our firm?

What is the competition doing in our market?

What areas of business that are closely related to ours are undeveloped?

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

S W O T Analysis (4 of 4)

Threats

What unfortunate environmental trends may hurt our future performance?

What technology is on the horizon that may soon have an impact on our firm?

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Strategies (3 of 3)

A fully developed marketing strategy should address the following considerations

Target market: Groups of customers that the retailer is seeking to serve

Location

Retail mix: Combination of merchandise, price, advertising and promotion, location, customer service and selling, and store layout and design

Value proposition: Statement of the tangible and intangible results a customer receives from shopping

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Exhibit 2.8 – Retail Strategic Planning and Operations Management Model

Competitive Environment: Behavior of Consumers, Competition, Supply Chain Members

Social and Legal Environment: Socioeconomic Environment, State of Technology, Legal System, Ethical Behavior

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Retail Strategic Planning and Operations Management Model

Operations management: Deals with activities directed at maximizing the efficiency of the retailer’s use of resources

Referred to as day-to-day management

The need to strive for a high profit is tied to the extremely competitive nature of retailing

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Chapter 1

Perspectives on Retailing

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Objectives

Explain what retailing is and why it is undergoing so much change today

Describe the five methods used to categorize retailers

Understand what is involved in a retail career and be able to list the prerequisites necessary for success in retailing

Explain the different methods for the study and practice of retailing

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

2

What is Retailing, and Why is it Undergoing so Much Change Today? (1 of 2)

Retailing: Consists of the final activities and steps needed to place merchandise made elsewhere into the hands of the consumer or to provide services to the consumer

Any firm that sells a product or provides a service to the final consumer is said to be performing the act of retailing

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

What is Retailing, and Why is it Undergoing so Much Change Today? (2 of 2)

Anything that affects how consumers choose to spend money affects the retailing industry

Retailers must consider the changes in the external environment

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

E-Tailing (1 of 4)

The great unknown for retail managers will be the ultimate role of the Internet

Bricks-and-mortar retailers: Operate out of a physical building

M-tailing – Shoppers use their smartphones to purchase merchandise and services

Apps – Digital services that can be downloaded

Fastest growing form of e-tailing

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

E-Tailing (2 of 4)

Growth of the Web 2.0 has important implications for retailers with the Internet becoming interactive

To combat e-tailing, bricks-and-mortar retailers must give their customers more control over the shopping experience

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

E-Tailing (3 of 4)

Has caused a shift in power between retailers and consumers

Traditionally, the retailers’ control over pricing information provided them the upper hand in most transactions

Today, the information dissemination capabilities of the Internet are making consumers better informed

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

E-Tailing (4 of 4)

Channel surfing: Occurs when the customer gets needed information in the stores and then orders it online for a lower price

To avoid paying state sales tax

Retailers must keep experimenting with various strategies

Next generation of technology will change the consumers’ expectations of what they demand from retailers

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Price Competition

Sam Walton forever changed the face of retailing by realizing that most of any product’s cost gets added after the item is produced

Walton made a major commitment to computerizing WalMart as a means to reduce expenses

Operating efficiency: Operating costs as a percentage of sales

Costco, a retailer, seeks to boost store traffic by lowering prices on key products

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Demographic Shifts (1 of 5)

Significant changes in retailing over the past decade have resulted from changing demographic factors such as:

The fluctuating birthrate

The growing importance of the 70 million Generation Y consumers

The move of Generation X into middle age

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Demographic Shifts (2 of 5)

The beginning movement of the baby boomer generation into retirement

The increasing number of women relative to men graduating from college and concurrent rise in unemployment among men relative to women

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Demographic Shifts (3 of 5)

Successful retailers must:

Become more service-oriented

Offer better value in price and quality

Have more convenient store hours

Be more promotion-oriented

Be better attuned to their customers’ needs

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Demographic Shifts (4 of 5)

Profit growth must come by either:

Increasing same-store sales at the expense of the competition’s market share

Reducing expenses without reducing services to the point of losing customers

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Demographic Shifts (5 of 5)

Same-store sales: Compares an individual store’s sales to its sales for the same month in the previous year

Market share: The retailer’s total sales divided by total market sales

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Store Size (1 of 4)

As stores increase in size the retailer often employs a scrambled merchandising strategy

Scrambled merchandising: Exists when a retailer handles many different and unrelated items

It is the result of the pressure being placed on many retailers to increase profits

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Store Size (2 of 4)

Retailers have found that reducing their store size is a pathway to improved profitability

Consumers prefer smaller stores due to the convenience of getting in and out faster

More personalized service

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Store Size (3 of 4)

Retailer needs a smaller geographic area to draw its customers

Retailer can easily find a location than if it had a larger store that requires more parking

Retail formats that have seen a significant decrease in average store size and a decrease in number of stores are:

Department stores

Category killers

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Store Size (4 of 4)

Category killer: Retailer that carries such a large amount of merchandise in a single category at such good prices that it makes it impossible for the customers to walk out without purchasing what they need, thus killing the competition

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Experience and Niche Retailing

A trend occurring in shopping malls is to transform them into exciting experience platforms

Eu Yan Sang is a major health-care brand in Asia, and it has created a Chinese medicine clinic that includes a yoga studio, spa, and health food café

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Exhibit 1.2 – External Environmental Forces Confronting Retail Firms

L O 1

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Categorizing Retailers

Census bureau

Number of outlets

Margin versus turnover

Location

Size

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Census Bureau

The U.S. Bureau of the Census, for purposes of conducting the Census of Retail Trade, classifies all retailers using three-digit North American Industry Classification System (N A I C S) codes

Shortcoming of using the N A I C S codes:

They do not reflect all retail activity

Comparisons between years may not be accurate

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Number of Outlets (1 of 5)

Retailers with several units are a stronger competitive threat because they can:

Spread many fixed costs over a larger number of stores

Achieve economies in purchasing

Advantages of single-unit retailers:

They have harder-working, more motivated employees

They can focus and tailor their efforts and merchandise in one trade area

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Number of Outlets (2 of 5)

Standard stock list: All stores in a retail chain stock the same merchandise

Optional stock list: Each store in a retail chain is given the flexibility to adjust its merchandise mix to local tastes and demands

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Number of Outlets (3 of 5)

Channel advisor or channel captain: Institution in the marketing channel who is able to plan for and get other channel institutions to engage in activities they might not otherwise engage in

Large store retailers are able to perform the role of channel captain

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Number of Outlets (4 of 5)

Private label branding: Occurs when a retailer develops own brand name and contracts with a manufacturer to produce the merchandise with the retailer’s brand on it instead of the manufacturer’s name

Also called store branding

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Number of Outlets (5 of 5)

The major shortcoming of using the number-of-outlets scheme for classifying retailers is that it addresses only traditional bricks-and-mortar retailers

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Margins Versus Turnover (1 of 3)

Gross-margin percentage: Measure of profitability derived by dividing gross margin by net sales

Gross margin: Difference between net sales and cost of goods sold

Operating expenses: Expenses the retailer incurs in running the business other than the cost of the merchandise

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Margins Versus Turnover (2 of 3)

Inventory turnover: The number of times per year, on average, that a retailer sells its inventory

High-performance retailers: Produce financial results substantially superior to the industry average

Low-margin/low turnover retailer: Operates on a low gross margin percentage and a low rate of inventory turnover

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Margins Versus Turnover (3 of 3)

Low-margin/high turnover retailer: Operates on a low gross margin percentage and a high rate of inventory turnover

High-margin/low turnover retailer: Operates on a high gross margin percentage and a low rate of inventory turnover

High-margin/high turnover retailer: Operates on a high gross margin percentage and a high rate of inventory turnover

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Location

The most significant of the new nontraditional shopping locations could be the one which combines culture with entertainment or shopping

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Size

The reason for classifying by size is that the operating performance of retailers tends to vary according to size

With advances in technology, using classification of size is unclear

L O 2

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Exhibit 1.5 – Retailing’s Two Career Paths

L O 3

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Career Path (1 of 2)

Store management: The retailing career path that involves responsibility for:

Selecting

Training

Evaluating personnel

In-store promotions

Displays

Customer service

Building maintenance

Security

L O 3

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Career Path (2 of 2)

Buying: The retailing career path whereby one uses quantitative tools to develop appropriate buying plans for the store’s merchandise lines

L O 3

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Common Questions About a Retailing Career (1 of 2)

Salary – Entry-level retail managers or buyers who do exceptionally well can double or triple their incomes in three to five years

Career progression – Person capable of handling increasing amounts of responsibility can move up quickly

L O 3

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Common Questions About a Retailing Career (2 of 2)

Geographic mobility – Person must be willing and able to make several moves, even if the changes may not be attractive in terms of an individual’s lifestyle

Societal perspective – Leading retail executives are well-rounded individuals with a high social consciousness

L O 3

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Prerequisites for Success

Hard work

Analytical skills

Creativity

Decisiveness

Flexibility

Initiative

Leadership

Organization

Risk taking

Stress tolerance

Perseverance

Enthusiasm

L O 3

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Study and Practice of Retailing

Analytical method

Creative method

A two-pronged approach

A proposed orientation

L O 4

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Analytical Method

The analytical retail manager is a finder and investigator of facts

Analytical perspective can result in a standardized set of procedures, success formulas, and guidelines

A small retailer can consider watching the Russell 2000 Index

Forecasting tool for future business conditions

L O 4

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Creative Method

The creative retail manager is an idea person

Trader Joe’s has sales higher than leading competitors due to its creative business model of clerks in Hawaiian shirts giving high-fives and free cookies

L O 4

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Two-Pronged Approach

Involves the synthesis of creativity and analysis

Retailers are duplicators rather than originators

To decide who or what to duplicate requires creativity and an analysis of the strategies that other retailers are pursuing

Sales and profits = Creativity

Profit and sales statistics = Analysis

L O 4

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

A Proposed Orientation

Four major orientations:

Environmental – Allows the retailers to anticipate and adapt continuously to external forces in the environment

Management planning – Helps the retailers to adapt systematically to a changing environment

Profit – All retail decisions will have an effect on the firm’s financial performance

Decision making – Allows the retailers to focus on the need to collect and analyze data to make intelligent retail decisions

L O 4

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Exhibit 1.6 – The Importance of Proactive Planning

A. Standard Performance

B. Reacting to Competitor’s Attack (Old Method)

C. Proactive Planning

L O 4

Dunne/Lusch/Carver, Retailing, 8th Edition. © 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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