The Inquiring Mind; Retail Merchandising

from the center for telecommunication services the university of texas at austin this is inquiring mind produced by public station kuhf fm in association with the news and information service at ut austin these discussions examining ideas and activities of a major university community says producer cathy cover whether it's a new breakfast cereal for the kids or a new car most of us are familiar with retail merchandising from the consumer's point of view but what's involved in that business my guest is dr linda gold an associate professor in the marketing administration department at the university of texas at austin darker golden teaches two courses on the subject the first retail merchandising and the second retailing strategies what is now a darker golden by the word retailing i found that as i was thinking of questions i kept thinking i've just marketing in general

though those are distinct terms for would you consider them to non us retailing as one aspect of marketing pass would be better if i gave the definition a sample marketing and then i can take retailing is more crooning is any process or act involved in the trip from the production of goods to the sale and satisfaction goes to the ultimate consumer marketing involves claiming for the good identifying what types of people are likely to buy it frankly these are called target market segments and how to reach these target market segments with promotions or advertising or consumer deal such as say since off coupons the best place to distribute the product is also considered marketing within to sell at dora dora or whether to sell the products in a department store they are is there's something called the four p's price plays product of promotion which kind of defines marketing one retailing is is one aspect of marketing and that is that last

portion of marketing which involves the delivery of goods or services to the final consumer marketing involves hosing and retailing does not reach healing literally involves the last link which is the marketing of goods and services to the final consumer it sounds as though there are lots of different components then to the whole marketing picture less internet retailing discomfited the other components to retain yourself there are components to retailing just like i mention the price plays product promotion which is commonly referred to as the marketing makes there is a retailing mix and then retailing makes involves things very similar to the marketing makes that is how are you going to merchandise your project how are you going to display your project how are you going to promote your product of where exactly you had a look at your store for the most effective distribution these things that are involved in somewhat of a more broad sense and marketing are also involved in retail and so there are various elements there's human resource management you're managing personnel you're trying to figure out how to

compensate people want wages to pay them how to motivate them how to reward them for affective work so retailing is a variety of activities for my we call a retailer the first thing i thought of him in the department store image would i would guess the actual retail or might be there if a store manager or maybe their department he had a bad person be considered the reid anderson the retailer as well as the sales clerk is involved in retailing the store manager is the president of a corporation that owns a large number of stores such as for example allied department store we chose miers brothers and bird i in synch asked ease he is also a retailer so retailer really you can consider anyone who is involved in retail activity it impresses me that i'm as i said my first image was a large part of story that is going into a shopping mall you may have big department stores are each year and that you've got lots of little things in the

middle and that all of those people are retailers then you start looking outside of a shopping mall and there's still other types of reading there's people tend to frank think of retailing as restricted to a store situation where you walk in and that's in store retailing is one label for there's also revealing which involves the salesperson coming to the consumer such as in the case of four brushes avon tupperware party sarah coventry parties these this is all retail insisted they go to the customer and the customer coming to them it sounds also like those decisions that in the case of that the large department store the person who's in charge of the department already has some of the things he answered for them obviously the place has been determined that the person who's doing their door to door has every decision to be made where what part of the city they get to him how they approach the bestseller it unless

they happen to work for lowering ization that has some defined territories and they say you know your territory eat is these these blocks what about what i would call non profit organizations you consider those getting involved you can think of all the typically have traditionally revealing in marketing has been bought up as something applicable to for profit organizations that his business is in business to make a profit and survive over time that is changing somewhat and that is changing quite a bit in the product and service run on marketing principles are applied vary widely too not for profit organizations planned parenthood utilizes marketing tools to make decisions that even where to locate their clinics on what kind of target markets we're going to try and cultivate which isn't necessarily going to be a teenager on

it may be a professional person sometimes looking for health services of a different type than they might get from from a doctor the not for profit sector has become a very popular sector for the application marking principles by the same token retailing principles are also at applicable this has the american cancer society is trying to for example sell an idea the idea that you know you need to support this research please contribute so that we can find the research that is the sale of something to the final consumer frequently it doesn't have to be something tangible you might say the americans the cancer society is selling quote unquote the good feeling that you are contributing to a cause that you think is a very worthy cause i think in some ways that sound harder because it's not a tangible gains its very heart very areas like consulting services even accountants because services

any type of service is is free flowing harder in some ways and also seems to me that in this day and time that we are so accustomed to advertising and it sort of another whole program of how much every passing influences us that it makes sense to me that the nonprofit company organization has to be able to compete in a sense to get people's attention no one didn't want fear a very successful program utilized spots a promotional principles and marketing principles that was the buy war bonds program back in world war two they used all types of promotion they used billboards they use signs they used radio they literally used all elements of the promotional maxi you see for example the march of dimes these marketing tools they use personnel selling these advertising which is the paid use of mass media for the promotion of a product they use in store displays

they use saddam public relations techniques it's very very approachable and the most successful campaigns that are not for profit or frequently use all those tools how did retailing develop when she says isn't something that to a degree it seems to me that probably for all time the man has been a consumer hand has gone into the marketplace so to speak and yet on the other hand it seems like things are so much more fast paced we have so much competition there are so many types of consumer goods that my really be different now than it was a few decades ago and you say that it's developed in many many ways it is different some of the the final product is the same i mean what people were trying to do though is exactly is to basically distribute a good or service or an idea on cancer the first car your question retailing is an age old concept not necessarily

known by that label that you can think of maybe some of the first formalized retailing institutions were the handlers who were going around selling goods off of a cart and didn't vary much illustrated by yentl if you saw the movie until the peddler in heath's segment in this market what he could sell to women when he can sell them and he literally was applying marketing and revealing techniques and then we did we evolved into trading post ideas at least in the united states army there were trading post in general stores and they were they were more than just a place to go and buy goods and services that was also something that disseminate information and placed a social art you went to the general store it you talked to mr brown in mr brown told you what was happening with mrs smith down the block and that her daughter was ill and he found out a lot of information that way as the postal system evolved retail catalogs came in to paint

sears montgomery wards being the two first yellen existing today widely known retail catalogs so we stayed really a whole process and bothered of changing with ideas has more on the techniques available or what's you know you first you first saw in store sailing then you saw direct mail selling evolved and we got a vehicle to do it the postal service and then you saw the combination of the two and now you see actually several different things going on our experts look mac there's more polarization which means there's more variety of different types of retail stores we have the wrong hypermarket warning and which will sell foods grocery items health and beauty aids in general merchandise you know everything potentially from tires to arm lingerie and then on the other extreme we have the story be specializing only selling tires are only selling lingerie and you just get literally depends on

how the firm defines themselves and what markets they decide they want to compete in which you see that extreme going on now we're going to see probably a lot occurring because of the increase in technology we may in the future and there's there's some work being done instruction now in the premier future we may see department stores actually owning a television network and selling their products having their own satellites and selling their products over television you pick up the phone or you may use your computer and call in an order a product you may get to see a three minute vignettes on how the cheese was made in france in your own home and you look and you say okay i would like some of that pride you pick up the phone call so that you may never have to leave your house the response when you tell people that this that you'd get frequently as well it's a shopping you know more than just buying the good it's a social activity and so on through

the just like it evolved from the general store in the paddle or arm and the changes that were having may foster additional changes such as some of the purposes may still be the same and we know yet know how consumers will adapt the consumers are very open and many ways to changes we've become very used to bank card machines banks or involved in retailing and they distribute their product a whole variety of different ways and they used to we can now pick up the phone and many cities and pay our bills by phone ever having to use the postal service grocery with it through the computer never talk to a person are people adapt very quickly you're listening to the inquiry mind my guest is dr linda goldman from the marketing administration department at ut austin talking about a retail merchandising is it a tough question that i'm really curious how it is that the successful retailer can decide what is consumers are going to buy the have to have a good sense

for the public there's a certain six cents that comes from experience that is much much more than that are people who have been involved in retailing in mind for many many years to get to where they debate you'll have a feel for their market bridgeton evolves literally threw their experience the air is there are many tools available to help the retailer understand what people would buy the candidates were getting more and more armed technologically adept we can monitor sales on the floor within minutes of any sale occurring you know exactly how many blue sweaters of a certain type or salt survey gives you some information ah the area's a curve which is applied by some retailers where they buy a certain precincts of their merchandise really that ten percent thats in what's called the testing stage they think that it might sell they're not sure they buy a small melon find out if it does they order more

and then then a certain percentage of the merchandise will be in the pre peak stage that is its merchandise that's hardly a one point time a rubik's cube was now we've got a game out trivial pursuit there is definitely increasing dramatically in sales and they can even keep it stocked up summer at our one point nine one a few of them to see if they would they would sell and sure enough they sell now and now they're in the pre peak stage and then at some point in time they will hit the peak stage where they've saturated the market and the re try noticing this and in some of that you don't know for sure you just kind of look at what's happened in the past and have some idea of how larger market is indeed then she'd get a feel for iss this peeking out you look when sales start declining cash you know its own and a client side of their life cycle and so you don't buy more of the products are there you know looking at information like that you can get some idea of what's happening with the private army and ariane when

you first by the project you know when you know have your own sales information or other people's sales information you go from what you know about your market you can do research in your marketing get information that way you can look at some more products sales there are lots of fun arms of information that can be used to reduce the risk either going to make a great deal of difference to him just what the items are if you're dealing with its large expanse of appliances you might have to take one kind of an approach but i the thing is used to me to change the most are very trendy clothes for young people young women and retailing critically for mass merchandisers over it differ products can be quite complicated each department isn't a sense that any of the organizational structure that each department fridley is operating something analogous to their own business and in that department you might like to have some products you just always have to start their staple items when you have some sort of rules of thumb on how much inventory you keep you never

wanna be out of for example size thirty to underwear you know is just so you keep a certain amount of backup stock and there are certain stable grid you don't wanna be out of delusion customers it never had been to penney's i'm sure and they've been out of underwear sears you don't go and find them out of screwdrivers or you know any other of the staple items that they might sell on the other hand arlene it's nice to have on your department one of those hot items each time they come out and won the promises figuring out what's going to be a hot item he used to be after the rubik's cube and with a slight overlap it was hands that had a clock on them and those were hot item and stationery areas frequently in every buyer every manager would love to know what the next hot item is going to be so that they can have it start those hot items can help keep your seo up arms sales up these indie the stable good stitcher always gonna sell always need in stock

save a variety of different types of products in a certain amount of your your mind hours goes to buying these products what about the relationship of the retailer to earn a brand name national manufacture pointed to a degree it seems that and i'm sure there must be some type of coronation it seems that you are very much dependent upon what that initial company dare say in their overall brought ever touching campaign of bacon on a big push you know you're in a need to be ready will the national companies are free flowing very helpful to the retailers on for example the summer the national brands a national brand simply means any branded as nationally distributed arm and a minute acts that it means any brandt national brands to be widely distributed is any brand with the label of the manufacturer amr a private graham says using unpaid frame he is also nationally distributed but it is the retailers own label that

is on it i don't want it hides isn't is a national brand because it is the manufacturers label that's our own boat maybe distributed nationally or regionally or whatever but the national prayers frequently help the retailer in that they hope that by running some of these promotions are cooperative advertising is a very common concept well known by many at a buyer and general merchandise manager in department stores the cares corporate advertising helps them pay for their local advertising date on the manufacturer will help with advertising costs really up to a certain percentage of sales she's a fifty percent of her if fifty percent advertising concept of certain percentage of sales and this can be very helpful to frame your local advertising costs on the other hand if there is a national campaign run

into who's a manufacturer to have the product distributed so that people can buy otherwise you're creating something which can be for it to refer to as generic generic comment that he says demand for a particular product category as opposed to your brand if you are shaking and have developed a new hair dryer a new start advertising actually that it isn't just repeat it then you're creating a man for hair dryers because people can't buy shake your dryer so you may be actually advertising and then it instance for the competition occasionally that does happen in certain regions where the firm for some reason other has not cordon at this distribution its advertising national flooded talk a minute about the classes they eat each detail that in particular your courses are preparing them for in a very practical sense for what they're going to be doing it yes that was a refueling courses in particular the first course is a survey course of retail institutions i think of it as more of an institutional course

if we talk about things such as markups markdowns arm there's even something called the strategic profit model where you look at different financial indicators of the fur and her trying to help you make decisions aren't we talk about site location we talk about human resource management we take the broad activities and talk about them in the second chorus which you do is you apply them first corps you learn about them the second course you do it and what the students do in the second course is they come up with a business that they think is a feasible business to start in some area and aaa it is in them in the area where they lived because he to get the information they're that they come up with a business and then they go through the whole process of starting a business everything from what licenses do i have to get they don't actually do it but they find out all the things that they need to do what licensing what sales tax man's do i

have to pose a kind of zoning ordinances do i have to worry about where my job description is what kind of people do i want higher paid them home and to motivate them home and evaluate their performance how many keep my books what products in mind in order white on white member of the different types of products in montana carry whose my target market segment how minor reach them what am i gonna tell them how my god find them what a surprise that all the questions is a lot of work yet yet they debate yes they are surprised at some of the very practical things you know they're aware of the fact that they need to identify their target market here you know from classes they've taken before that they need to figure out how to price they need to figure were located it's one thing reading about it and talking about it it's another thing trying to make the decision they find out that the world doesn't always black and white and that's one of the things that i'm trying to to get across in this course and they learned by doing it it's it's a little different to tell them that it is in

black and white and for them to find out from their own experience and you know you never have perfect information they say will show we market this person or that person i don't know that your decision you know what will the market beer there's sometimes some things are educated trial in here you get as much information as you can and then you take your best educated guess and try and be prepared to change your strategy or tactic if it doesn't work i guess to spend dr linda gold an associate professor of marketing administration at the university of texas at austin speaking about retail merchandising i'm kathy glover for the inquiry you'd been listening to the inquiry line a series of programs about the members of a major university community their ideas and opinions expressed in this programme do not necessarily reflect the views of the university of texas at

austin inquiring mind is produced by public station in association with the news and information service and distributed by the center for telecommunication services all at the university of texas at austin a map this is the longhorn radio network ms bee