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Merchandising Principles - CTE3806 - Exam 1
Vocabulary from Chapters 1 through 4 of the book, "Retailing Management," by Levy Weitz.
Terms in this set (46)
A retailer performs some distribution and manufacturing activities, such as operating warehouses.
Ex: JCPenney sells Arizona jeans (Private Label)
Corporate Social Responsibility
The voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations, in addition to the concerns of its stakeholders.
Manufacturers undertake retailing activities.
Ex: Ralph Lauren (New York Jones, Liz Claiborne) operates its own retail stores
Large retailers engage in both wholesaling and retailing
Ex: Wal-Mart, Lowe's, Safeway, Brown Shoe Company
Competition between retailers that sell similar merchandise using different formats, such as discount and department stores.
Competition between the same type of retailers (e.g., Kroger versus Safeway).
A business that sells products and/or services to consumers for personal or family use.
A set of business activities that adds value to the products and services sold to consumers for their personal or family use.
It indicates how the firm plans to focus its resources to accomplish its objectives.
It should identify:
1. The target market
2. The product and service mix
3. A long-term comparative advantage over competition
When retailers offer merchandise not typically associated with their type of store, such as clothing in a drug store, it results in scrambled merchandising.
This increases intertype competition.
A set of firms that make and deliver a given set of goods and services to the ultimate consumer.
A firm performs more than one set of activities in the supply chain.
Ex: retailer invests in wholesaling or manufacturing
A merchant establishment operated by a concern that is primarily engaged in buying, taking title to, usually storing, and physically handling goods in large quantities, and reselling the goods (usually in smaller quantities) to retailers or industrial or business users.
North American Industry Classification System
Classification of retail firms into a hierarchical set of six-digit codes based on the types of products and services they produce and sell.
The number of different merchandise categories within a store or department.
The smallest unit available for keeping inventory control. In soft goods merchandise, a SKU usually means a size, color, and style.
Purchasing from factories that pay workers at a living wage, well more than the prevailing minimum wage, and offer other benefits, like onsite medical treatment.
Offer a limited and irregular assortment of food and general merchandise with little service at low prices
Use low-locations, inexpensive store design, little customer service.
Low inventory holding costs by carrying a limited assortment of fast selling items.
They offer an inconsistent assortment of brand name merchandise at low prices.
Ex: TJX Companies (which operates T.J.Maxx, Marshalls, Winners, HomeGoods, TKMaxx, AJWright, and HomeSense), Ross, Burlington Coat Factory, and Big Lots.
First Tier: Upscale, high fashion chains with exclusive designer merchandise and excellent customer service
Ex: Nordstrom, Neiman Marcus, Saks
Second Tier: Retailers sell more modestly priced merchandise with less customer service
Third Tier: Value oriented caters to more price conscious customer
Ex: JCPenney, Sears, Kohl's
A type of store concentrating on a limited number of complementary merchandise categories and providing a high level of service.
Deep and Narrow Assortments
Low Price and Service
Wholesaling to Business Customers and Retailing to Consumers
End-of-season merchandise that will not be used in following seasons.
Merchandise that has minor mistakes in construction.
A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a retail outlet using a name and format developed and supported by the franchisor.
Selling merchandise or retailers through more than one channel.
Ex: Stores, catalogs, and the internet.
System in which salespeople encourage customers to act as hosts and invite friends or coworkers to a "party" at which the merchandise is demonstrated.
The pattern of buying both premium and low-priced merchandise or patronizing both expensive, status-oriented retailers and price-oriented retailers.
Once customers identify a need, they may seek information about retailers or products to help them satisfy that need.
Needs motivating consumers to go shopping for pleasure.
Needs motivating consumers to go shopping to accomplish a specific task.
Extended Problem Solving
A buying process in which customers spend considerable time making a decision because it is important and because they have limited knowledge of alternatives.
Habitual Decision Making
A purchase decision involving little or no conscious effort.
Limited Problem Solving
A purchase decision involving a moderate amount of effort. Customers do this when they have some prior experience with the product or service and when their risk is moderate.
to cut into; cause to become reduced; diminish.
Choice of Alternatives
The way customers use the information they have and collect about alternatives, evaluate the alternatives, and make the choice that best satisfy their needs.
Internal Sources of Information
Information in a customer's memory, such as names, images, and past experiences with different stores.
External Sources of Information
Information provided by ads and other people.
In these cultures, social relationships are more important and material goods are less important to consumers.
The most common means to define segments, because consumers in these segments can be easily identified, the market size can be determined, and the degree to which they can be reached by and are responsive to media can be easily assessed.
When geographic and demographic characteristics are used to classify consumers.
"Birds of a feather flock together"
Ex: Consumers in the same neighborhood tend to buy the same types of vars, appliances, and shop at the same retailers.
Lifestyle or Psychographics
Refers to how people live, how they spend their time and money, what activities they pursue, and their attitudes and opinions about the world in which they live.
- Lower, Middle, Upper
- Striver, driver, devoted, intimate, altruist, fun seeker, creative
- Agressive, shy, emotional
One or more people whom a person uses as a basis of comparison for beliefs, feelings and behaviors.
Retail Market Segment
A group of customers whose needs will be satisfied by the same retail offering because they have similar needs and go through similar buying processes.
Percentage of consumers who buy the product after viewing it.
A model of customer decision making based on the notion that customers see a retailer or a product as a collection of attributes or characteristics.
The model can also be used for evaluating a retailer, product, or vendor. The model uses a weighted average score based on the importance of various issues and performance on those issues.
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