Retailing

Describe the evolution of retailing.

      Retailing institutions generally have evolved in accordance with the wheel of retailing, which holds that new types of retailers gain a competitive foothold by offering their customers lower prices through reduction or elimination of services. Once established however, they add more services and increase their prices, thus becoming vulnerable to the next low&-price retailer.

Outline the various elements of retailing strategy.

      A retailer must first identify a target market and then develop a product strategy. Next, it must establish a customer service strategy. Retail pricing strategy involves decisions on markups and markdowns. Location is often the determining factor in a retailer's success or failure. A retailer's promotional strategy, along with store atmosphere, plays an important role in establishing a store's image.

Identify and explain each of the five bases for categorizing retailers.

      Retailers can be categorized on five bases: shopping effort expended by customers, customer services provided product lines location of retail transactions, and form of ownership. Retailers like consumer goods, may be divided into convenience, shopping, and specialty categories based on the effort shoppers are willing to expend in purchasing products. A  second method of classification categorizes retailers on a spectrum ranging from self&-service to full&-service. The third method divides retailers into three categories: limited&-line stores, which compete by carrying a large assortment of one or two product lines; specialty stores, which carry a very large assortment of only part of a single product line; and general merchandise retailers, including department stores, variety stores, and mass merchandisers such as discount houses, off&-price retailers, hypermarkets, and catalog retailers, all of which handle a wide variety of products. A fourth classification method distinguishes between retail stores and non&-store retailing. While most U.S. retail sales take place in retail stores, such non&-store retailing activities as direct selling, direct&-response retailing, and automatic merchandising machines are important in marketing many types of goods and services. The fifth method of classification categorizes retailers by form of ownership. The major types include corporate chain stores, independent retailers, and independents that have banded together to form retail cooperatives or join wholesaler&-sponsored voluntary chains or franchises.

Explain the concept of scrambled merchandising.

            Scrambled merchandising refers to retailers' practice of carrying dissimilar product lines in an attempt to generate additional sales volume. Scrambled merchandising has made it increasingly difficult to classify retailers.