Retail Management Introduction to the course

© IWM/MCM 2013 Retail Management, Prof. Dr. Thorsten Wiesel & Dr. Sonja Gensler 1

Retail ManagementIntroduction to the course

Summer 2013

Prof. Dr. Thorsten Wiesel & Dr. Sonja GenslerMarketing Center MünsterInstitute for Value-Based Marketing

© IWM/MCM 2013 Retail Management, Prof. Dr. Thorsten Wiesel & Dr. Sonja Gensler

What is retailing?

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What is Retailing?

Retailing – a set of business activities that adds value to the products and services sold to consumers for their personal or family use

A retailer is a business that sells products and/or services to consumers for personal or family use.

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Examples of Retailers

Retailers such as Thalia, REWE, Lidl, BioSupermarkt, Saturn, Zara, H&M, Rituals, Amazon.de

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Firms that are retailers and wholesalers, i.e. sell to other businessas well as consumer: Lufthansa, Deutsche Bank, Metro


Retailer’s role in supply chain

A supply chain is a set of firms that make and deliver a given set of goods and services to the ultimate consumer.

Retailers are the final business within a supply chain which links manufacturers to consumers.

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Manufacturing, wholesaling and retailing

Vertical Integration – firm performs more than one set of activities in the channel (retailer invests in wholesaling and manufacturing)

Backward Integration – retailer performs some distribution and manufacturing activities (REWE sells private label products)

Forward Integration – manufacturers undertake retailing activities (e.g., Esprit operates its own stores)

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Do retailers add value?

Retailers add significantly to the prices consumers face

Why not buy directly from the manufacturer?

Does that mean that grocery stores are very profitable?

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A box of crackers at a grocery store costs $1 to manufacturer sells at a price of $2

Example


Why not get rid of the middlemen?

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ManufacturerVendor

DistributorWholesaler

Retailer

$1.00 $1.20 $2.00

$.85 $.15 $.70

Consumer

Price to Distributor

Price to Retailer

Price to Consumer


How do retailers add value?

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How retailers actually add value

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Provide AssortmentBuy other products at the same time

Break BulkBuy it in quantities customers want

Hold InventoryBuy it at a convenient place when you want it

Offer ServicesSee it before you buy; get credit, etc.

Ryan McVay/Getty Images


What is your favorite retailer? Why do you like this retailer? What would a competitive retailer have to do to get your patronage?

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Social and economic significance of retailing

Retail Sales: Over $4.1 trillion in annual U.S. sales in 2005

Employment: Employs over 24 million people in 2005 One of the largest sectors for job growth in US

Social responsibility

Global player

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World’s 20 largest retailers

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Germany’s largest retailers 2011

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http://de.statista.com/statistik/daten/studie/76008/umfrage/groesste-einzelhaendler-in-deutschland-nach-einzelhandelsumsatz/

Revenue in million US Dollar


Structure of Metro Group

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http://www.metrogroup.de/internet/site/metrogroup/node/9280/Lde/index.html/


Comparison of distribution channels around the world

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What have created these differences in distribution?

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Social & Political Objectives

• China, India: To reduce unemployment by protecting small businesses

• EU: To protect small retailers • To preserve green spaces/town centers

Geography • Much lower population density in the US than in India, China, and EU (where less low-cost real estate are available for building large stores)

Market size • Large retail markets in US, India, China• Countries in EU – distribution channels and retail

chains operate in a single country (no economy of scales to be achieved; trade barriers still exist)


Strategic vs. tactical decisions

Doing the right thing (direction) vs. doing things right (execution)

Strategic decisions are: Made infrequently Long-term Require significant investment Not easily reversed

Examples: location, organization design, information and distribution systems, customer service

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Retail strategy

Need to identify the competition Intratype competition Intertype competition

Identifying customers What are the significant

demographic and life-style trends? Who are your target customers?

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Retail strategy

A retail strategy should identify target market product and service mix long-term competitive advantage

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What types of decisions do retail managers make?

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Decision variables for retailers

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Retail Strategy

Customer Service

LocationPricing

Store Design and

DisplayMerchandise Assortment

CommunicationMix


Objectives of this course

After following this course, you are able to…

explain key terms in retail management,

elaborate on key topics in retail management (e.g., location, pricing, assortment, customer experience),

critically discuss retail management insights, and

apply knowledge to real-world retail management case studies.

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Team responsible for Retail Management

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Institute for Value-Based Marketing

Prof. Dr. Thorsten Wiesel

Dr. Sonja Gensler

Ines Hackeradt


What are we going to do during this course?

Interactive lectures Discussion of different topics related to retail management To improve learning experience... Experience retailing yourself: different

assignments to stimulate ‘hands on’ learning

Guest speakers Thomas Wiesel, CEO LS Travel Retail: June 3, 2013 Dr. Lars Köster, Leiter Marketing-/Vertriebsservice, EDEKA: July 1, 2013

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Assignments – get out and do it!

For every lecture, we ask you to go out to a retailer of your choice and to find out what strategy has been implemented/how the store is run.

List of „get out and do it“ assignments is available on Learnweb.

You can collect the information for several assignments when visiting the retailer.

We are going to use your observations in our class discussions.

No credits for doing the assignments.

Improved learning experience through ‘hands on’ learning.

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Literature

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Levy/Weitz, Retailing Management, McGraw-Hill, 8th International Edition, Available at Heribert Meffert Bibliothek: signature H-a397, H-a397a, H-a397b


Schedule - lecture

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date topic chapter inLevy & Weitz

May 27 Introduction to the course 1May 28 Types of retailers + multichannel retailing 2+3June 3 Customer buying process 4June 4 Retail + retail site locations 7+8June 10 Financial strategy 6June 11 Information systems and supply chain management 10June 17 NO LECTURE (time to study and prepare)June 18 Managing the merchandise planning process 12June 24 Buying merchandise 13June 25 Retail pricing 14July 1 Store layout and design 17July 2 technological developments in retailingJuly 8 NO LECTURE (prepare ‘future of retailing’ assignment + questions)July 9 NO LECTURE (prepare ‘future of retailing’ assignment + questions)July 15 Future of retailingJuly 16 Recap and exam preparation


Lecture slides and information about assignments

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Register yourself to the course on Learnweb:https://www.uni-muenster.de/LearnWeb/learnweb2/index.php?theme=wwu

All lecture slides will be available at 4pm the day before the actual class (the latest) on Learnweb.

Detailed information about the assignments is available on Learnweb.


Final grade and exam

Exam counts 100% of the final grade.

Exam: 60 minutes for 60 credits.

With 30 credits in the exam you have definitely passed.

Questions are a combination of knowledge, understanding, and transfer.

Some examples of possible questions are given during the course.

Exam will take place between July 20 and August 9,2013 (maybe on a Saturday). Exact date will be announced by the ‘Prüfungsamt’.

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What is relevant for the exam?

Lecture slides and corresponding chapters in Levy & Weitz

Discussion in class

Presentations by guest speakers

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Expectations

From our side… Be on time for class Be prepared Be active Not use any cell phones or laptops during lectures Respect your fellow classmates

And from your side…?

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Any questions?

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Contact Information

Prof. Dr. Thorsten WieselWWU MünsterMarketing Center MünsterInstitute for Value-Based Marketing

Am Stadtgraben 13-1548143 Münster

Telefon: +49 (0) 251 83-28207E-Mail: [email protected]

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Dr. Sonja GenslerWWU MünsterMarketing Center MünsterInstitute for Value-Based Marketing

Am Stadtgraben 13-1548143 Münster

Telefon: +49 (0) 251 83-28208E-Mail: [email protected]

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Retail Management Introduction to the course

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