Strategy & Location
What is target market?
The target market is the market segment towards which the retailer plans to focus its resources and retail mix.
What is the term for the equipment used to display merchandise in the stores?
Fixtures
What is stockout?
A stockout occurs when an SKU that a customer wants is not available in the store.
What is customer loyalty?
Customer loyalty means that customers are committed to purchasing merchandise and services from the retailer and will resist the activities of competitor attempting to attract their patronage.
What is margin guarantee?
Retailer and vendor negotiate a guarantee of the profit margin for the retailer, else markdown money to be paid by vendor to retailer.
What is a convenience store?
A store that provides a limited variety and assortment of merchandise at a convenient location with speedy checkout.
What are the three main layout types?
Grid (straight), Racetrack (loop), Free-form (boutique,free-flow).
Briefly outline the stages of merchandise flow from the vendor to the customer.
Vendor -> Distribution Centre -> Store -> Customer or Vendor -> Store -> Customer
Define CLV and the use of the concept in CRM.
Customer lifetime value (CLV) is the expected contribution from customers to the retailer’s profits over their entire relationship with the retailer. Focus of CRM on high CLV customers.
List the main two pricing strategies considered in retailing.
EDLP & High-Low Pricing.
What is an anchor? Define and explain its role using an example.
A major retailer within a shopping centre, such as Macy's, Walmart, etc, that attract a significant number of consumers and consequently make the centre more appealing for other retailers.
Name at least 4 types of fixtures used for visual merchandising in stores.
Straight rack, Rounder, Four-way fixture, Gondola , Table , Wall-fixture
Define EDI (supported by ERP) and describe its use in supply chain management.
Electronic Data Interchange - a system in which the communication between vendor and retailer occurs electronically, allowing to automate collection of information (save time and effort) .
Outline the four stages of the CRM process.
1. Collecting customer data. 2. Analyzing customer data and identifying target customers. 3. Developing CRM programs. 4. Implementing CRM programs.
What is Yield Management?
Yield management is the practice of adjusting prices up or down in response to demand to control the sales generated.
What is positioning? And how can it be communicated through perceptual map?
Positioning is the design and implementation of a retail mix to create an image of teh retailer in the customer's mind relative to its competitors. Perceptual maps use various dimensions, such as price, quality, traditional/fashion forward, etc to demonstrate where the company sees/positions itself.
Name at least 5 feature areas that may be used to influence the buying behaviour of consumers?
Windows, Entrance, Promotional aisle/area, walls, dressing rooms, Free-standing displays, Mannequins, End Caps, cash wraps
Distinguish between push and pull supply chain strategies.
Pull supply chain - a supply chain in which requests for merchandise are generated at the store level on the basis of POS data Push supply chain - in which merchandise is allocated to the stores on the basis of central demand forecasts.
Describe the customer pyramid and its implications for CRM.
Platinum - most profitable and loyal. Price is not so important. Gold - buy a significant amount of merchandise from retailer, but still patronise some of the competitors. Price plays a role. Iron - purchase modest amount of merchandise, spending not substantial for special treatment. Lead - Least profitable customers - make negative contribution to the firm's income. Demand a lot of attention but do not buy much. Mostly buy on sale.
Describe the 3 types of brand alternatives.
• National Brands - also known as manufacturer’s brands, are products designed, produced, and marketed by a vendor and sold to many different retailers.
• Private-label brands – also called store brands, house brands, or own brands, are products developed by retailers.
•Premium Store Brands
•Exclusive Brands
•Copycat brands
•Generic Brands - target a price-sensitive segment by offering a no-frills product at a discount price.
What is Retail format development? Describe using an example.
A retailer develops a new retail format with a different retail mix- for the same target market. Eg. The UK based retailer Tesco operated several different food store formats that all cater to essentially the same target market: Tesco Express, Tesco Metro, Tesco Superstore.
Describe at least 5 presentation techniques.
Item and size presentation, colour presentation, price lining, vertical merchandising, tonnage merchandising, frontal presentation
Describe at least 4 functions of a Distribution Centre
1. Management of Inbound logistics 2. Receiving and Checking 3. Storing and Cross-Docking 4. Getting merchandise floor ready 5. Preparing to ship merchandise to a store 6. Management of Outbound Transportation.
Describe at least 5 ways to make Frequent shopper programmes more effective.
1 Offer Tiered Rewards 2 Treat high CLVs as VIPs 3 Incorporate Charitable Contributions 4 Offer Choices 5 Reward all Transactions 6 Make the Program Transparent and Simple.
Describe at least 4 points that the vendor and retailer should consider in arranging the procurement contract.
1. Price and gross margin (margin guarantee or slotting fee)
2. Additional markup opportunity (for excess inventory)
3. Terms of purchase (payment period)
4. Exclusivity
5. Advertising allowance (shared or coop advert.)
6. Transportation.