Retail Marketing Exam 1

Which is NOT part of the 5 rights? - Price, Location, Quantity, Promotion?

Promotion

Amazon hires internal employees to deliver packages to customers. This is an example of _____

Forward integration

Amazon created a new line of private label home furnishings, this is an example of:

Backward integration

Walgreens is open 24hrs a day so that sick customers can buy medicine when they need it, at any time. How is Walgreens adding value?

Holding inventory

Walmart and Target are both full-time discount stores. What type of competition do they have?

Intratype

Which of the following is NOT part of the retail mix? - Product, Quantity, Location, Presentation

Quantity

Which best describes the assortment of Discount Tire (a store selling only tires and tire accessories)? - Broad and deep, narrow and deep, broad and shallow, narrow and shallow?

Narrow and deep

Which of the following is not included in the retail mix? - Time, Price, Location, Promotion?

Time

What type of store is Walmart?

Full-line Discount

What type of store is Aldi?

Limited assortment supermarket

What type of store is Dollar Tree?

Extreme Value Retailer

What type of store is Altar’d State?

Specialty Store

What type of store is Lowe’s?

Category Killer

What type of store is JCPenney?

Department Store

What type of store is TJ Maxx?

Off-price retailer

What type of store is BreakTime?

Convenience Store

What type of store is Schnucks?

Traditional Supermarket

A consumer orders McDonald’s on an app and picks it up at the counter. What type of purchase is this?

Cross-channel

Which of the following is a medium? - A retailer’s app, A retailer’s store, A retailer’s website, A retailer’s YouTube page?

A retailer’s YouTube page

Where do most retail sales happen?

Physical Stores

Which benefit belongs to online shopping? - Expanded selection, Immediate gratification, Using cash, Personal service?

Expanded selection

What is the first step in the consumer decision-making process?

Need recognition

Which of the following is NOT a factor that impacts the amount of time spent searching for a product or service? - Customer’s martial status, Customer’s education level, Risk associated with the purchase, Time pressure felt by the customer?

Customer’s martial status

The multi-attribute model is comprised of importance weights, beliefs, and…

attributes

Most of our decisions fall under what category?

Limited problem solving

Buying a car is an example of what type of decision?

Extended

Courtney is starting a new business and believes that there are enough customers to make the business profitable, but she isn’t sure if she can market to them effectively. She isn’t sure if her target customers are ___

Reachable

Limited assortment store characteristics

Smaller stores, private labels, few shelves, (example: Aldi)

Trends in supermarket retailing

Traditional supermarkets face intense competition

Other stores have increased space dedicated to food

Supercenter store characteristics

Large stores (160k-200k sq feet)

One-stop shopping (example-Walmart Supercenter, Super Target)

Warehouse Clubs characteristics

Limited and irregular merchandise assortment, limited service, low prices, low inventory holding costs (low markup, fast-selling items), pallet shelving, buying in bulk (example-Sam’s Club and Costco)

Convenience Stores characteristics

Smaller, buy now eat now, prices often higher than grocery

(example-gas stations~BreakTime, Buccees, NoGas)

General Merchandise retailers

Department stores, specialty stores, category specialists, home improvement centers, full-line discount stores, drugstores, off-price retailers, extreme value retailers

Issues department stores face

Lower costs by reducing services, focus on apparel and home, omnichannel retail, broad target market, low foot traffic

Solutions to department stores issues

Closing stores, smaller stores, partnerships, omnichannel, more private label

The 3 tiers of department stores

Tier 1-Specialty department stores, Tier 2-Moderate prices, Tier 3-Value-oriented

Full-line discount store characteristics

Broad variety, limited service, and low prices. (example-walmart and target) Biggest competitor is Amazon

Specialty Store characteristics

Smaller store, focused in one area, Faster, Private label/branded, Specific market segments (ex: Boutiques, J Crew, GameStop, Discount Tire, Altar’d State

Category Specialists/Category Killer/Big Box/Destination Characteristics

They kill the competition in their category, customers buy larger % of the time, low price/low service, lots of growth (example-Lowe’s)

Extreme Value Retailers characteristics

Focus on lower-income customers, imply good value, low-cost location, limited service, (examples-Dollar Store, Dollar general, 5 below)

Off-price retailers characteristics

Offer an inconsistent assortment of brand name merchandise at low prices, they buy merchandise from companies trying to offload merchandise after a season, (example-Marshalls, HomeGoods, TjMaxx family, Ross)

Service Retailers

Intangibility, Services, Huge issue with supply and demand, inconsistency of the offering

Merchandise/Service Continuum

All Goods, No Services (top of continuum)

Wholesale Club

Supermarket

Optical Center

Restaurant

Airline

All Services, No Goods (end of continuum)

What is a channel?

A way for you to actually buy merchandise from a retailer (example-TikTok Shop)

What is a medium?

A way to communicate, but NOT to buy. (example-TikTok profile)

Single-channel

One way to shop—stores only or online only

Multi-channel

Multiple independent channels operating separately without integration. Focuses on maximizing sales of products and services through non-connected channels

Cross-channel

Customer use multiple channels in one purchase journey

Omnichannel

Coordinated, seamless, synchronized customer experience across all touchpoints. Provides a smooth shopping experience through connected channels

Channel Strengths-Stores

Touch and smell of products, personal service, risk reduction, immediate gratification

Mobile commerce Advantages

Shop from anywhere, anytime, Location-based offers and personalization, One-tap purchasing with saved payment info, Push notifications for deals and reminders,

A challenge of mobile commerce

Screen size-retailers create dedicated mobile experiences to best fit different devices for each one

Line Busting

Associate completes transactions anywhere in store with mobile devices

Clienteling

Staff accesses customer history and preferences for personalized service

Geofencing

trigger offers when customers are near stores (Lauren and Jimmy Johns example)

Buy now, Pay later benefits

For customer makes expensive items more accessible without credit cards

For retailers, it comes with higher conversion rates and larger average order values

Walmart’s Store-powered strategy

Walmart leverages physical assets for omnichannel advantage-Micro fulfillment centers called dark stores, curbside pickup, last-mile delivery that allows to ship from nearest store location for faster delivery.

The explosion of social commerce

Shop w/o leaving social ability

• Shoppable posts with product tags

• Live shopping events and influencer partners

• One-click checkouts without leaving platforms

• Discovery-driven shopping vs search-driven

AI Applications In-Stores

Smart shelves detect out of stock items automatically, computer vision tracks customer traffic patterns, virtual assistants help customers find products, cashierless checkout using camera systems, dynamic pricing adjusts based on demand

AI Applications Online

Personalized homepages for each visitor, size recommendations from purchase data, chatbot support handling common questions, visual search and uploading of photo to find similar items, demand forecasting for inventory optimization

Alternative Retail Channels

Catalog retailing, Direct Selling (avon, pampered chef), Automated retailing (Sephora vending machine)

Multi-channel customers spend more - T or F

True

Why retailers go omnichannel

Customer preferences/flexibility, Share of wallet, Personalization, Each channel offers unique benefits and have chance to leverage all, revenue growth, market expansion, lower fulfillment costs, cost-efficient services

Challenges of omnichannel

Integration complexity, showrooming risks (customers use stores as showrooms to look at products, then buy them online thru diff retailer), Technology investment, Inventory synchronization, Pricing consistency, Organizational alignment

Pricing Dilemma-Should prices match online and in-store?

Arguments for:

Consistent brand experience, reduces showrooming incentive, etc.

Arguments against:

Diff cost structures by channel, varying competitive landscapes, location-based pricing opportunities

Customer Decision-Making Process Steps

1. Need Recognition

2. Information Search

3. Evaluation

4. Choice and Purchase

5. Post-purchase

   1. Evaluation and satisfaction

Utilitarian Needs

You are shopping in order to fulfill a certain task - shopping should be easy (example-Getting gas)

Hedonic Needs

You are shopping for the experience - shopping should be pleasurable (example-Sephora)

Stimulating Need Recognition

Suggestions by direct sales associates, advertising and direct mail, visual merchandising, special events, signs/displays/samples, 5 senses, coupons, influencers

Customer Characteristics in Information Search

Experience, Perceived risk, Time pressure, Education

Multi-attribute Model

Rate a retailer based on performance of relevant attributes, importance of those attributes-Attributes, Importance Weights, Beliefs

Consideration Set

The set of alternatives the customer evaluates when making a selection

Cognitive Dissonance

Internal conflict due to discrepancies between beliefs and purchases (regret)

Extended Problem Solving

A big purchase (wedding dress)-financial risk, performance risk, social risk, physiological risk

Limited Problem Solving

Most of what we buy (ex water bottle, shoes) - prior experience, personal knowledge, the majority of our decisions. Impulse buying and Unplanned purchasing also fit into this category.

Habitual Decision Making

You don’t care - purchase isn’t important, purchased in the past, loyal to brands or stores

Factors that influence the buying process

Economy, Family (kids?), Reference Groups, Culture

Actionable

Similar needs and benefits

Identifiable

Size of segment and find them

Substantial

Large enough

Reachable

Can market to them

The 5 Rights

Right product, at the right price, at the right time, at the right place, in the right quantity

Retail

A set of business activities that adds value to the products or services sold to consumers for their personal or family use

Vertical Integration

Firm performs more than one set of activities in the channel

Backward Integration

Retailer performs some distribution and manufacturing activities (example-Target has up&up brand)

Forward Integration

Manufacturers undertake retailing activities

Strategic Decisions

made infrequently, long-term, require significant investment, not easily reversed.

A retail strategy should identify:

Target Market

Product/Service Mix (retail mix)

A long-term sustainable advantage

P’s of Retail Mix

Personnel (customer service)

Presentation (store design and display)

Product (assortment)

Promotion (communications mix)

Pricing

Place (location)

7 C Digital Retailing Framework

Core goals, Contextual elements, Content, Community, Communication, Commerce, Connection

Owned Media

website, blog site, social media sites, chat platforms, email marketing, mobile apps

Paid Media

search, display, banner, pay per click, influencer, and social media ads

Earned Media

online sharing and mentions, reviews, customer conversations, mentions, shares, likes, SEO