Retail Industry Exam 2- Study Guide

RETAIL INDUSTRY EXAM 2- QUESTIONS AND
CORRECT ANSWERS A+ GRADED


What_is_a_Retail_Strategy_-
_answersA_statement_identifying_(1)the_retailers_target_market_(2)_the_format_the_ret
ailer_plans_to_use_to_satisfy_the_target_markets_needs_and_(3)the_bases_on_which_th
e_retailer_plans_to_build_a_sustainable_competitive_advantage.



Target_Market_-
_answersthe_market_segment(s)_toward_which_the_retailer_plans_to_focus_its_resource
s_and_retail_mix



Retail_Format_-_answersdescribes_the_nature_of_the_reatiler's_operations-
its_retail_mix_(type_of_services_and_merchandise_offered,_pricing_policy,_advertising_an
d_promotion_programs,_store_design_and_visual_merchandising,_typical_locations_and_c
ustomer_services)_that_will_be_used_to_satisfy_the_needs_of_its_target_market



What_is_a_sustainable_competitive_edge?_And,_how_do_you_build_one?_-
_answersA_sustainable_competitive_advantage_is_an_advantage_the_retailer_has_over_it
s_competition_that_is_not_easily_copied_by_competitors_and_thus_can_be_maintained_
over_a_long_period_of_time._



You_can_build_one_by:

Building_a_brand_with_an_emotional_connection_with_customers._

-Utilize_a_deeper_understanding_of_your_customer_

-Convenient_locations_

-Shared_systems_with_vendors

,-Exclusive_merchandise_(private-label)

-knowledgeable_and_helpful_salesperson_

-



What_can_a_local_business_do_that_sets_them_apart_from_a_national_retailer?_-
_answers



Many_retailers_build_customer_loyalty_by_developing_private_label_brands_aka_store_br
ands._What_are_private_label_brands?_-
_answersThey_are_products_developed_and_marketed_by_a_retailer_and_available_only_
from_that_retailer.The_Consumer_can_only_get_private_-
label_brands_from_that_specific_store_



*Keeps_consumers_from_comparison_shopping

Example:_Kroger_brands,_or_Great_value_the_Walmart_brand



To_build_an_advantage_that_is_sustainable_over_a_long_period_of_time,_retailers_must:
_-
_answersThey_must_not_rely_on_a_single_approach,_such_as_good_locations._They_mus
t_use_multiple_approaches_to_build_a_high_wall_around_their_position_as_possible.



Loyalty_or_Frequent_Shopper_Programs_-
_answersCustomer_relationship_management_programs._Activities_that_focus_on_identif
ying_and_building_loyalty_with_a_retailer's_more_valued_customer_

Typically_involves_offering_customers_rewards_based_on_he_amount_of_services_or_mer
chandise_they_purchase._



Example:_Airlines-
_frequent_flyer_miles._Krogers_Rewards_card_,_Subway_giving_their_customers_a_free_s
andwich_after_each_10_they_purchase

, Market_Penetration_-
_answersIs_a_growth_opportunity_directed_toward_*existing_customers*_using_the_retai
ler's_present_retailing_format.

Involves_either_attracting_new_consumers_from_the_retailers_current_target_market_wh
o_dont_patronize_the_retailer



Example:_Opening_more_stores_in_target_market,_keeping_existing_stores_open_for_lon
ger



Cross-selling_-_answersA_market_penetration_approach_-
_means_sales_associates_in_one_department_attempt_to_sell_complementary_merchand
ise_from_other_departments_to_their_customers._

Example:_Customer_has_just_bought_a_Blu-
Ray_player,_a_sales_associate_tries_to_sell_the_customer_special_cables_to_improve_the
_performance_of_the_blu-ray_player



Market_Expansion_-
_answersInvolves_using_the_retailers_*existing_retail_format*_in_new_market_segments.
_

Example:_Chico's_buying_out_White_House_Black_Market_and_took_on_the_younger_se
gment_that_they_target_towards._



Also,_Chicos_acquisition_of_Soma,_a_lingerie_retailer_that_targets_women_35-55_also._-
Same_market_and_similar_operations,_but_different_operations



Retail_format_development_-
_answersAn_opportunity_in_which_a_retailer_develops_a_new_retail_format-
_A_format_with_a_different_retail_mix_for_the_same_target_market.