Marketing_Management_14th_Edition-min

MANAGING RETAILING, WHOLESALING, AND LOGISTICS | CHAPTER 16 451
As part of their franchise
agreement, new McDonald’s
franchisors must attend the
company’s Hamburger University
for two weeks to learn how to
properly manage their restaurants.
The New Retail Environment
With the onset of the recession in 2008, many retailers had to fundamentally reassess virtually
everything they did. Some adopted a cautious, defensive response, cutting stock levels, slowing expansion,
and discounting deeply. Others were more creative about managing inventory, adjusting
product lines, and carefully avoiding overpromoting. For example, JCPenney held back 60 percent
of inventory for the fall 2009 holiday season, compared to its usual 20 percent, to avoid having
empty shelves and stock-outs on one hand and overflowing shelves and heavy discounting on the
other hand. Some firms, such as the Container Store and Saks, lowered average prices; others, such
as Gilt.com and Neiman Marcus, introduced selective and very short-term deep discounts.
Restoration Hardware chose to move its furniture product lines more upscale. 6
Although many of these short-term adjustments were likely to remain longer-term, a number of
other long-term trends are also evident in the retail marketing environment. Here are some that
are changing the way consumers buy and manufacturers and retailers compete (see Table 16.3
for a summary).
• New Retail Forms and Combinations. To better satisfy customers’ need for convenience, a
variety of new retail forms have emerged. Bookstores feature coffee shops. Gas stations include
food stores. Loblaw’s Supermarkets have fitness clubs. Shopping malls and bus and
train stations have peddlers’ carts in their aisles. Retailers are also experimenting with limited-time
“pop-up” stores that let them promote brands to seasonal shoppers for a few weeks
TABLE 16.3
Recent Retail Developments
• New Retail Forms and Combinations
• Growth of Intertype Competition
• Competition between Store-Based and Nonstore-Based Retailing
• Growth of Giant Retailers
• Decline of Middle-Market Retailers
• Growing Investment in Technology
• Global Profile of Major Retailers
• Growth of Shopper Marketing