Off-price retailer:A retailer that buys at less-than-regular wholesale prices and sells at less than retail. Examples are factory outlets, independents, and warehouse clubs.Independent off-price retailer:An off-price retailer that is either independently owned and run or a division of a larger retail corporation.Factory outlet:An off-price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturer’s surplus, discontinued, or irregular goods.Faced with unprecedented sales declines at full-price stores, a growing group of high-end retailers and luxury brands are building more factory outlets, where sales have fared much better.Warehouse club:An off-price retailer that sells a limited selection of brand-name grocery items, appliances, and clothing and a hodgepodge of other goods at deep discounts to members who pay annual membership fees i.e. CostcoThe major types of retail organizations—corporate chains, voluntary chains, retailer cooperatives, and franchise organizationsChain stores:Two or more outlets that are commonly owned and controlled.Voluntary chain:a wholesaler-sponsored group of independent retailers that engages in group buying and common merchandising i.e. the Independent Grocers Alliance (IGA) and Western Auto.Retailer cooperative: a group of independent retailers that bands together to set up a jointly owned, central wholesale operation and conduct joint merchandising and promotion efforts.Franchise:A contractual association between a manufacturer, wholesaler, or service organization (a franchisor) and independent business people (franchisees) who buy the right to own and operate one or more units in the franchise system i.e. Burger King, McDonaldsCustomers have become smarter and more price sensitive. They see no reason to pay more for identical brands, especially when service differences are shrinking. For all of these reasons, many retailers today are rethinking their marketing strategies.Retailers must first segment and define their target markets and then decide how they will differentiateand position themselves in these markets.
Too many retailers, even big ones, fail to clearly define their target markets and positions.Retailers must decide on three major product variables: product assortment, services mix, and store atmosphere.One strategy is to offer merchandise that no other competitor carries, such as store brands or national brands on which it holds exclusives.Another strategy is to feature blockbuster merchandising events. Bloomingdale’s is known for running spectacular shows featuring goods from a certain country, such as India or China.The store’s atmosphere is another important element in the reseller’s product arsenal. Retailers want to create a unique store experience, one that suits the target market and moves customers to buy.
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