mkt 320f no exam 2

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Marketing Channels

-A combination of organizations and individuals who perform the required activities to link producers of products to users of those products to accomplish marketing objectives
--Place: making goods and services available in the right quantities and locations when customers want them; place variations are required when different target markets have different needs

Channel objectives

-Specifically stated, measurable, and consistent with firm's marketing objectives

Place decisions are guided by "ideal" place objectives

-Product classes suggest place objectives
--Product classes summarize consumers urgency to have needs satisfied and willingness to seek information, shop, and compare
-Place system is not automatic
-Place decisions have long run effects
--Usually harder to change than product, promotion or price decisions
-Need to consider place objectives in relation to the product life cycle

Channel strategy

-An expression of a general action plan and guidelines for allocating resources to achieve the channel objective

Factors in Channel Strategy

-Buyer preference
-Relationship orientation
-Market coverage

Buyer Preference

-Letting the customers buy the way they want to

Relationship orientation

-Building strong relationships with customers

Market coverage

-Number of outlets marketing the product

Specializations and Division of Labor

-Creates greater efficiency
-Provides lower production costs
-Achieves economies of scale
-Aids producers who lack resources to market directly
-Build good relationships with customers

Channel Intermediaries

-Retailer
-Merchant Wholesaler
-Agents and Brokers

Retailer

-A channel intermediary that sells mainly to customers

Merchant Wholesaler

-An institution that buys goods from manufacturers, takes title to goods, stores them and resells and ships them

Agents and brokers

-Wholesaling intermediaries who facilitate the sale of a product by representing channel members

Nike Running Shoe Example

-Producer-Make in Thailand
-Agent-U.S. middleman arranges shipment and distribution
-Wholesaler-Breakdown ship to retailer
-Retailer-Sell to YOU

Factors suggesting type of wholesaling intermediary to use

-Product characteristics
-Buyer considerations
-Market characteristics

Channel system may be direct or indirect

Why use direct distribution?
-Greater control
-Lower cost
-Internet Makes direct distribution easier
-Direct contact with customers brings more awareness of changes in consumer attitudes
-Quicker response or change in marketing mix
-Suitable intermediaries not available
--A firm may have to go direct if suitable intermediaries are not available or will not cooperate

Direct Channel

-A distribution channel in which producers sell directly to consumers
-Many firms prefer to distribute directly to the final customer because they want to control the whole marketing job
-Direct distribution usually requires a significant investment in facilities, people and information technology

Indirect Channel

-Can be your best option when people consider certain places as "the place to shop"
-Most important reason for using an indirect channel of distribution is that an intermediary can help producers better serve customer needs at lower costs

Discrepancy of quantity

-The difference between the quantity of products is it is economical for a producer to make and the quantity final users or consumers normally want

Discrepancy of assortment

-The difference between the lines a typical producer makes and the assortment final consumers want

Channel Specialists Adjust Discrepancies with Regrouping Activities

-Accumulating
--Involves collecting products from many small producers; helps adjust quantity discrepancies
-Bulk-breaking
--Involves dividing larger quantitates into smaller quantities as products get closer to the final market; helps adjust quantity discrepancies
-Sorting
--Means separating products into grades and qualities desired by different target markets; helps with adjusting assortment discrepancies
-Assorting
--Means putting together a variety of products to give a target market what it wants; helps in adjusting assortment discrepancies

Channel functions performed by intermediaries

-Transactional functions
-Logistical functions
-Facilitating functions

Transactional Functions

-Contacting/promotion
-Negotiating
-Risk taking

Logistical Functions

-Physically distributing
-Storing
-Sorting

Facilitating Functions

-Researching
-Financing

Logistics

-The efficient and cost-effective forward and reverse flow and storage of goods, services, and related information, into through, and out of channel member companies
-Is the transporting, storing, and handling of goods in ways that match target customers' needs with a firm's marketing mix
-Also known as Physical Distribution (PD)-whenever the product includes a physical good, place requires decisions about logistics

Key Issues in Channel Management

-Choosing the type of relationship-chosen by manager
-Whole-channel product-market commitment
-Traditional channel systems (from book alone)
--The various channel members make little or no effort to cooperate with each other
--Each channel member does only what it considers to be in its own best interest
--So these involve weak relationships
-Conflict handling
--You want to avoid conflict because you don't want to hurt your relationships but some level of conflict is inevitable
--You can offer different products through each channel
--Always treat channel partners fairly
-Role of channel captain
--A manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts
--Can guide channel relationships
--Some producers lead their channels
--Some intermediaries are channel captains

Vertical Marketing Systems

-Channel systems in which the whole channel focuses on the same target market at the end of the channel
-These make sense and are growing because if the final customer doesn't buy the product then the whole channel suffers
-The dominant force in the marketplace

Corporate channel systems

-Shorten channels
-Means there is corporate ownership all along the channel
-You might say the firm is going "direct"

Vertical integration

-Can help with the development of corporate channel systems
-This is acquiring firms at different levels of channel activity
-Has potential advantages
--Stable sources of supplies
--Better control of distribution and quality
--Greater buying power
--Lower executive overhead

Administered Channel Systems

-In these, the channel members informally agree to cooperate with each other
-May work well

Contractual Channel Systems

-In these, the channel members agree by contract to cooperate with each other
-May also work well; similar to administered channel systems

The best channel system should achieve ideal market exposure

Ideal Market Exposure:
-Makes a product available widely enough to satisfy target customers' needs but not exceed them
-Too much exposure only increases the total cost of marketing
-Market exposure strategies
--Intensive-selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product; sell it where they buy it
--Selective-selling through only those intermediaries who will give the product special attention; sell it where it sells best; less outlets than intensive
\---Becoming more popular than intensive because firms are beginning to see that they don't need 100% coverage of a market to support national advertising
--Exclusive-selling through only one intermediary in a particular geographic area; moving from intensive to exclusive distribution gives up exposure in return for some other advantage--including but not limited to lower costs

Levels of Distribution Intensity

-Intensive: A form of distribution aimed at having a product available in...
-Selective: A form of distribution achieved by screening dealers to eliminate...
-Exclusive: A form of distribution that established...FINISH FROM BOOK

Channel systems can be complex

-Achieving the desired degree of market exposure can lead to complex systems of channel distributions
-Multichannel distribution: occurs when a producer uses several competing channels to reach the same target market; maybe using several intermediaries in addition to selling directly
-Need to always be able to move or change your channel system based on if competition changes or customers' place requirements shift
-Reverse channels
--Channels used to retrieve products that customers no longer want
--The need for these may arise in a variety of different situations
--Are important too
--New laws require reverse channels in some industries
--They are sustainable and profitable--they can help the environment too
--Have to plan for these and take into consideration that this might the what your customers want

Entering international markets

-Exporting: Often comes first when trying to get into an international market; selling some of what the firm produces to foreign markets; this can start up to take advantage of excess capacity or even to get rid of surplus inventory
-Licensing: this is often an easy way to get into an international market; means selling the right to use some process, trademark, patent or other right for a fee/royalty; the licensee takes most of the risk in the foreign market because it needs to make some kind of initial investment to get started
-Management contracting: means that the seller provides only management and marketing skills--others own the production and distribution facilities; sells know-how; another relatively low risk approach to entering into the international market
-Joint Venturing: when a domestic firm enters into a partnership with a foreign firm; increases involvement; risky because once it has been started it is difficult to back out if things aren't going as you had planned
-Direct Investment: means that a parent firm has a division (or owns a separate subsidiary firm) in a foreign market; this gives the parent firm complete control of marketing strategy planning; involves ownership; this is a big commitment and usually involves greater risks

Wine Distribution Video

LOOK UP

Physical Distribution Gets it to Customers

Logistics or Physical Distribution: the transporting, storing and handling of goods in ways that match target customers' needs with a firm's marketing mix
-There are many different combinations of logistics decisions
-Each combination can result in a different level of distribution service and different costs
-Firms must determine the best way to provide the level of distribution service that customers want and are willing to pay for
-Logistics costs are very important to both firms and consumers. These costs vary from firm to firm and, from a macro-marketing perspective, from country to country
-Differences in logistics costs across countries can be substantial

Physical Distribution Customer Service

-Customer Service Level-how rapidly and dependably a firm can deliver what the customer wants. Customers tend to care about their own needs, not about how the product was moved or stored. Customers want products, not excuses. They think in terms of physical distribution.
-To improve the customer service level, some firms outsource some or all of their distribution work to specialists like Penske:
--Penske can handle order fulfillment and inventory management in addition to transportation
--It's expertise in logistics can help firms reduce large inventories and other distribution costs while improving the level of customer service provided
--A firm with limited financial resources or a lack of people with expertise in logistics can turn to an outside supplier like Penske
-Physical Distribution is invisible to most consumers:
--The only time many consumers notice the physical distribution system is if they have special needs or if something goes wrong
--if it is handled properly, as is usually the case in well-developed macro-marketing systems, physical distribution is taken for granted by customers
-90% of business outsource their transportation
-48% companies lease trucks
-30% of distribution costs go to transportation
-27% more companies are using contract logistics than 5 years ago
-Growth in supply chain management/logistics are growing

Trade-Offs among Physical Distribution Costs, Customer Service Level, and Sales

-In physical distribution, there are always trade-offs among costs, the customer service level, and sales. Because physical distribution costs can be substantial for various levels of service, marketers must determine what level of service is possible and appropriate for each target market. It is hard to get a really good service at a low price.
-For example, a retailer might reason that providing faster transportation than consumers demand will maximize customer service and reduce lost sales, but if the service level is too low then customers will buy elsewhere and sales will be lost.
-However, this diagram illustrates the important trade-off between customer service and costs
--providing additional levels of customer service raises costs because of higher: inventory to prevent stock outs, or faster transportation, eventually increases the total cost of physical distribution
-Notice that the curve of lost sales goes down as customer service increases, but only to a certain point
--At certain points, providing too much customer service can actually detract from the overall marketing effort, because it can increase costs, and possibly price the product out of the reach of the consumers in the target market
-The lowest cost approach might not be the best

Factors affecting PD service levels

-Advance info on product availability
-Order processing time
-Backorder procedures
-Inventory storage
-Order accuracy
-Damage in transit
-Online status information
-Advance info on delays
-Delivery time and reliability
-Compliance with customers
-Defect-free Deliveries
-Handing adjustments/returns

Physical Distribution Concept

-Dictates that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution for a given customer service level. Unfortunately, too many firms still treat physical distribution activities as separate and unrelated
-Both lower costs and better service help to increase customer value
-The first thing organizations must do in implementing the physical distribution concept is to decide what service level to offer
--Marketing research can help to determine the appropriate service level, and it typically takes into account the various factors shown on this slide
--Order processing, inventory management, shipping, storage, and returns are all key factors affecting the service level
-Marketers must then find the lowest total cost for the right service level
--Total cost approach

Total cost approach

-Evaluating each possible physical distribution system and identifying the total costs of each alternative system; uses the tools of costs accounting and economics

Ethical issues may arise

-Product availability
--False expectations about delivery speed
--Selling products that are not available
--Running out of popular products
-Coordination of PD
--Intentional delays in order confirmation
--Shifting the burden of holding inventory
-Most of the ethical issues that come up in physical distribution are about communications over product availability
--Some internet vendors are being criticized for creating false expectations about the speed of delivery or for selling products that are not available
-Conventional retailers also receive criticism for running out of products that they promote heavily
--Some retailers offer rain checks to deal with the situation, or try to manage demand proactively by taking advance orders

Supply Chains

-The connected chain of all of the business entities, both internal and external to the company, that perform or support logistics function
-Many companies are turning to supply chain management for competitive advantage
-A company's supply chain includes all of the companies involved in all of the upstream and downstream flows of products, services, finances, and information, from initial suppliers (the point of origin) to the ultimate customer (the point of consumption)

Electronic data interchange (EDI)

-An approach that puts information in a standardized format easily shared between different computer systems
-In many firms purchase orders and shipping reports along with other paper documents have been replaced with computerized EDI
-Helps improve the information flow for physical distribution

Supply Chain Management

-A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value
-Visualizing the entire supply chain allows managers to maximize strengths and efficiencies at each level of the process to create a highly competitive, customer-driven supply system

Supply Chain Managers

-The philosophy behind supply chain management is that by visualizing the entire supply chain, supply chain managers can maximize strengths and efficiencies at each level of the process to create a highly competitive, customer-driven supply system that is able to respond immediately to changes in supply and demand

Supply chain management plays a dual role

-Communicator of customer demand from point of sale to supplier
-Physical flow process that engineers the movement of goods

Benefits of Supply Chain Management

-Supply chain oriented companies commonly report:
--Lower inventory, transportation, warehousing, and packaging costs
--Greater supply chain flexibility
--Improved customer service
--Higher revenues
--Increased performance and profitability

Trends in Supply Chain Management

-Advanced computer technology has boosted the efficiency of logistics with tools such as automatic ID systems, radio frequency technology, and supply chain software systems
-Outsourcing of logistics functions is a rapidly growing segment in which a manufacturer or supplier turns over the entire or partial function of supply chain management to an independent third party.
-Electronic distribution includes any kind of product or service that can be distributed electronically. For instance, computer software can be purchased and downloaded electronically.
-Green Supply Chain Management is in response to pressure for firms to act as leaders in protecting the environment

Advanced Computer Technology

-Automatic identification systems
--Bar coding
--Radio frequency technology
-Communications technology
-Supply chain software systems
-Ex: FedEx-\>Injunction box. Every product shipped from Westlake to Manor, a jet plane would take it to Memphis, TN and back to Austin. They don't do that anymore.

Outsourcing Logistics Functions

-Outsourcing Benefits
--Reduce inventories
--Locate stock at fewer plants and distribution centers
--Provide same or better levels of service
-Turning their logistics functions over to firms with expertise in that area allows companies to focus on their core competencies

Electronic Distribution

-A distribution technique that includes any kind of product or service that can be distributed electronically, whether over traditional forms such as fiber-optic cable OR through satellite transmission of electronic signals
-Ex: e-trade or iTunes

Green Supply Chain Management

-Requires integrating green thinking into all phases of the supply chain
--Green materials sourcing
--Environmental impact of packaging, shipment, use
--Incorporate end-of-life management
\---Recycling
\---Clean disposal

Logistics in supply chain

-The process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption
-Orchestrating the physical means through which products move it is critical to any supply chain

Logistical components of the supply chain

-Sourcing and Procurement
-Production Scheduling
-Order Processing
-Inventory Control
-Warehouse and Materials Handling
-Transportation
-Integrating and linking all of the components is the logistics information system
-The supply chain team orchestrates the movement of goods, services, and information from the source to the consumer
-The best supply chain teams move beyond the organization to include external participants, such as suppliers, transportation carriers, and third-party logistic suppliers. Members of the supply chain communicate, coordinate, and cooperate extensively.

Sourcing and Procurement

-The role of purchasing:
--Plan purchasing strategies
--Develop specifications
--Select suppliers
--Negotiate price and service levels
--Reduce costs
-One of the most important links in the supply chain is that between the manufacturer and the supplier.
-Purchasing helps establish and cooperative relationships with vendors.

Production Scheduling

-In a traditional mass-marketing manufacturing, production begins when forecasts call for additional products to be made or inventory is low
--Push, inventory-based, mass production
-In a customer-focused "pull" manufacturing environment, production of goods is not started until an order is placed by the customer specifying the desired configuration, also known as mass customization or build-to-order
--Pull, customer-order based, mass customization
-In this environment of customer demand and mass customization, supply chains need to be flexible and be able to shift production based on demand

Just-in-time Manufacturing

-A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials at the precise time they are needed on the production line.
-JIT, or lean production, was borrowed from the Japanese. Manufacturers work with supplier to get necessary items to the assembly line at the precise time they are needed for production
-Ex: Mission ties wanted to come to TX, environmental lawyers are high. They didn't want them to move here.

Benefits of JIT

-For manufacturers: reduces raw materials inventories; immediate shipping of products
-For suppliers: daily or hourly deliveries rather than weekly
-For customers: lower costs; shorter lead times; products tailored to customer needs

An order processing system

-Is a system whereby orders are entered into the supply chain and filled
-Order processing is becoming more automated through the use of computer technology known as electronic data interchange (EDI)
-As an order enters the system, management must monitor two flows: the flow of goods and the flow of information
-Shipping incorrect merchandise or partially filled orders can create just as much dissatisfaction as stock outs or slow deliveries
-Inventory sent by private networks (more secure) reduces inventory levels, improves cash flow, increases speed/transmission

Inventory Control System

-A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer's or a customer's demand
-The goal of inventory management is to keep inventory levels as low as possible while maintaining an adequate supply of goods to meet customer demand

Warehousing and Materials Handling System

-A method of moving inventory into within, and out of the warehouse
-Most manufacturers today have moved to automated minimize the amount of handling
-Although JIT manufacturing processes may eliminate the need to warehouse many raw materials, manufacturers keep some safety stock on hand in the event of an emergency. Additionally, inventory may be stored for seasonally-demand products
-Storage helps manufacturers manage supply and demand
-A materials-handling system moves inventory into, within, and out of the warehouse

Transportation

-Airways-the most expensive cargo transporting mode but it is fast and growing; on average these rates are three times that of trucking rates; BUT the greater speed may offset the added cost; total distribution cost can be lower even though air transportation is higher
-Water-a good day to get things overseas, but it is slow; actually is the slowest shipping method but is usually lowest cost; important for international shipments
--Inland water transportation-things such as the Mississippi river are also important for moving goods from place to place; good fro bulky non perishable products
-Pipelines-used primarily to move oil and gas so they are important in the oil producing and oil consuming companies
-Motor carriers
-Railroads-large loads are moved at a low cost
From Book Alone:
-Trucks-more expensive but also more flexible and essential sometimes; they go where rails can't; reliable in meeting delivery schedules
-Containerization-grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination; protects the products and simplifies handling during shipping
-Piggyback service-means loading truck trailers or flatbed trailers carrying containers onto railcars to provide both speed and flexibility; a ride on two or more modes
-Transportation in developing countries can cost more
-There are also environmental costs to consider when looking at transportation choices
-Trucks, trains, airplanes and ships contribute to air pollution and global warming; estimates suggest that on average more than half of a firm's total carbon emissions come from transportation

Transportation mode choice are based on...

-From highest criteria to lowest:
-Cost (air, truck, rail, pipe, water)
-Transit time (water, rail, pipe, truck, air)
-Reliability (pipe, truck, rail, air, water)
-Capability (water, rail, truck, air, pipe)
-Accessibility (truck, rail, air, water, pipe)
-Traceability (air, truck, rail, water, pipe)

The storing function and marketing strategy

-Storing: the marketing function of holding goods till they're available when they're needed; necessary when production of goods doesn't match consumption; storing goods allows the producer to achieve economies of scale in production; storing it can smooth out sales, can also increase profits and customer satisfaction
-Inventory: the amount of goods being stored; many firms have found that they can cut inventory costs and still provide the desired customer service level
-Goods are stored at a cost

Specialized storing facilities may be required

-Private warehouses: storing facilities owned or leased by companies for their own use; very common but can be expensive
-Public warehouses: independent storing facilities; might choose this type of warehouse if you don't have a regular need for storage; maybe business is seasonal
-Warehouse facilities cut handling costs too because the cost of physical handling is a major storing cost; goods are handled when put into storage and when they are taken out of storage

The distribution center

-Special kind of warehouse designed to sped the flow of goods and avoid unnecessary storing costs
-Today this concept is widely used by firms at all channel levels
-Don't store it, distribute it
-Direct store delivery skips the distribution center-Frito Lay uses this approach
-Managers must be innovative to provide customers with superior value
-Taking advantage of ways to improve often requires cooperation all along the channel system

Retailers and wholesalers plan their own strategies

-Marketers select target markets and marketing mixes carefully
-Marketers must understand retailer/wholesaler evolution
-Retailing deals with final customers

Retailing

-All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use
-Crucial to consumers in every macro marketing system
-Consumers spend about $4.5 trillion a year buying goods and services from US retailers.

The role of retailing

-U.S. retailers employ nearly 25 million people
-Retailers account for 11.6 percent of U.S. employment
-Retailing accounts for 13 percent of U.S. businesses
-Retailers ring up almost $4 trillion in sales-nearly 40 percent of the U.S. GDP
-Industry is dominated by a few giant organizations, such as Walmart

Classification of Retail Operations

-Ownership
-Level of service
-Product assortment
-Price

Classifications of ownership

-Independent Retailers-owned by a single person or partnership and not part of a larger retail institution
-Chain Stores-owned and operated as a group by a single organization
-Franchises-the right to operate a business or to sell a product

Level of Service

-Full service
-Self service

Product Assortment

-Classification based on BREADTH and DEPTH of product lines

Gross Margin

-The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted

Planning a Retailer's Strategy

-Product:
--Product selection: width and depth assortment, brands, quality
--After-sale service
--Special services: special orders, entertainment, gift wrap
-Place:
--Physical stores and/or sales over the internet
--Number and location of stores
--Shopping atmosphere: comfort, safety
--Store size, layout and design
--Store hours
-Promotion:
--Advertising
--Publicity
--Salespeople: number and training
--Helpful information: demonstrations, displays, online videos, reviews
-Price:
--Credit cards:whether to offer a store card
--Discount policies
--Frequency and level of sale prices
--Charge (or not) for delivery or other services

Conventional retailers--try to avoid price competition

-General Stores
--Carried anything they could sell in reasonable volume
--Existed about 150 years ago
-Single line stores
--Also called limited line stores
--More conventional retailers use these
--They are stores that specialize in certain lines of related products rather than a wide assortment
--These stores are being squeezed
--The main advantage of limited line retailers is that they can satisfy some target markets better
--They are durable and clearly satisfy some people's needs

Major types of retail operations

-Department Stores
-Specialty Stores
-Supermarkets
-Drugstores
-Convenience Stores
-Discount Stores
-Restaurants

Department Store

-A store housing several departments under one roof. Each department is headed by a buyer, or department head who selects merchandise (combine many limited line stores and specialty store)

Specialty Store

-A retail store specializing in a given type of merchandise
-Usually small and has a distinct "personality"
-A type of conventional limited line store
-Usually sell shopping products

Supermarket

-Started the move to mass merchandising
-Large, departmentalized, self-service retailer. Specializes in food.
-Some use scrambled merchandising:
--Carrying any product lines they think they can sell profitably
--You mix product lines in hopes of achieving a higher profit
-To be considered a supermarket you must have annual sales of at least $2 million; but the average supermarket sells around $17 million a year
-Are planned for maximum efficiency

Drugstore

-A retail store that stocks pharmacy-related products and services as its main draw

Convenience Store

-A miniature supermarket, carrying only a limited line of high-turnover convenience goods
-Stock fill in items such as bread, milk, beet and eat on the go snacks

Categories of Discount Stores

-Full-line Discounters
-Specialty Discount Stores
-Warehouse Clubs
-Off-price retailers

Full-line discount store

-A retailer that offers consumers very limited service and carries a broad assortment of well-known, nationally branded "hard goods"
-Also called mass merchandisers
-Ex: Walmart

Mass merchandisers

-They are more than discounters--they are large self service stores with many departments that emphasize "soft goods" (house wares, clothing and fabrics) along with staples (health and beauty aids)
-But they still followed the discount house's emphasis on lower margins to get faster turnover
-Ex: Walmart and Target
-Walmart handles 30% or more of the total national sales for whole categories of products alone

Mass Merchandising (Discount Store)

-A retailing strategy using moderate to low prices on large quantities of merchandise and lower levels of service to stimulate high turnover or products
-Appeals to larger markets
-Different from conventional retailing

Supercenter (Discount Store)

-Retail store that combines groceries and general merchandise goods with a wide range of services
-Also called hypermarkets
-Look a lot like a combination of the supermarkets, drugstores, and mass merchandisers from which they have evolved but the concept is different
-They meet all routine needs; at a low price
-Ex: Super Target

Specialty Discount Store

-Is a retail store that offers a nearly complete selection of single-line merchandise and uses self-service, discount prices, high volume, and high turnover
-These upset some conventional retailers

Category Killer

-Is a specialty discount store that heavily dominates their merchandise segment

Warehouse membership clubs

-Limited-service merchant wholesalers that sell a limited selection of brand name appliances, household items, and groceries on a cash-and-carry basis to members

Off-price retailer

-A retailer that sells at prices 25 percent or more below traditional department store prices because it pays cash for its store and usually doesn't ask for return privileges

Restaurants

-Straddle the line between retail and service establishments
-Sell tangible products (food, drink) but also services (food prep, food service)
-Many could be considered specialty retailers
-Average household spends $2,670 a year eating out
-Over 50% of all new restaurants fail

Conventional Retailers-try to avoid price competition

-Conventional offerings: single and limited-line stores
-\>Expanded assortment and service: specialty shops and department stores
--Ritz Camera, Coach, Gap, Macy's
-\>Expanded assortment and/or reduced margins and service: supermarkets, discount houses, mass merchandising, super-,club-stores
--Safeway, IKEA, Home Depot, Costco
-\>Added conv., higher margins, reduced assortment: C-stores, vending, door-to-door, phone, mail, some e-tail
--7-11, Pepsi vending, Avon, Lands' End, QVC
-\>Expanded assortment, reduced margins, more information: internet
--eBay, Amazon, Zappos, Netflix, Dell

Nonstore Retailing

-Automatic Vending
-Direct Retailing
-Direct Marketing
-Electronic Retailing

Automatic Vending

-The use of machines to offer goods for sale
-Vending is the most pervasive retail business in the United States, with 11.5 million vending machines selling billions of dollars worth of goods annually
-Can be costly to operate but consumers like the convenience of a vending machine

Direct Retailing

-Door-to-door:
--A salesperson going directly to the consumer's home
--There are a variety of ways to shop at home
--While this is not popular at all in the US, it is a growing business in international markets
--Catalogs and online shopping is seen as a better option in US homes
-Office-to-office
-Home sales parties

Types of Direct Marketing

-Telemarketing
-Direct Mail
-Catalogs and mail order
-Electronic Retailing
-Shop-at-home networks