MKTG Chapter 16 Mcgraw Hill Connect

retailing

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

what are the factors of establishing a relationship with retailers?

1. choosing retailing partners

2. identifying types of retailers

3. developing a retail strat

4. managing an omnichannel strat

omnichannel

- aka multichannel strat

- involves selling in more than one channel (store, catalog, Internet, etc.)

channel structure

the level of difficulty a manufacturer experiences in getting retailers to purchase its products is determined by the degree to which the channel is vertically integrated

customer expectations

- retailers should also know customer preferences regarding manufacturers. - manufacturers, in contrast, need to know where their target market customers expect to find their products and those of their competitors.

channel member characteristics

the larger and more sophisticated the channel member, the less likely that it will use supply chain intermediaries

larger firms often find that by performing the channel functions themselves, tey gain more _____, be more ______, and save ________

control; efficient; money

distribution intensity

the number of channel members to use at each level of the marketing channel

what are the three levels of distribution intensity?

- intensive

- exclusive

- selective

intensive distribution

- a strategy designed to get products into as many outlets as possible

- used most by consumer packaged goods companies (Pepsi, Kraft, etc.)

exclusive distribution

- granting exclusive geographic territories to one or very few retail customers so no other retailers in the territory can sell a particular brand

- profit margins are protected

selective distribution

- relies on a few selected retail customers in a territory to sell product

- helps a seller maintain a particular image and control the flow of merch into an area

- attractive to many shopping goods manufacturers (apparel, home items, etc.)

conventional supermarkets account for only about __ % of food sales

60

conventional supermarket

a large, self-service retail food store offering groceries, meat, and produce, as well as some nonfood items (health and beauty aids, general merchandise, etc.)

perishables account for just over __% of supermarket sales and have higher margins than packaged goods

55

limited-assortment supermarkets

- aka extreme-value food retailers

- offer merchandise at prices 50% lower than those at a conventional supermarket

- ex. Save-A-Lot

to compete against intrusions, conventional supermarkets differentiate their offerings by...

1. emphasizing fresh perishables

2. improving health and wellness options

3. providing better value with private-label merch

4. providing better value -> added services (online ordering and delivery options)

5. providing a better shopping experience (ex. Jungle Jims)

supercenters

- large stores (185, 000 ft^2) that combine a supermarket with a full-line discount store

- they provide a one-stop shopping convenience to customers

warehouse clubs

- large retailers (100,000-150,000 ft^2) that offer a limited and irregular assortment of food and general merchandise, little service, and low prices to the general public and small businesses

- ex. Costco, Sam's Club, etc.

- stock up on large packs of basics at lower prices than other retail stores

Costco ranks as the ___ largest retailer in the U.S. with over 152 billion in sales

4th

convenience stores

(3,000-5,000 ft^2) provide a limited variety and assortment of merchandise at a convenient location with speedy checkout

- modern version of a mom & pop shop

- limited in terms of breadth and depth and charge higher than supermarkets do

COVID-19 pandemic accelerated online grocery retailres sales to grow by __% and exceed 89 billion in value

53

what are the different types of general merchandise retailers?

- department stores

- full-line discount stores

- specialty stores

- drugstores

- category specialists

- extreme value retailers

- off-price retailers

- service retailers

department stores

retailers that carry a broad variety and deep assortment, offer customer services, and organize their stores into distinct departments for d isplaying merchandise

- ex. Macy's, Kohls, etc.

full-line discount stores

retailers that offer a broad variety of merchandise, limited service, and low prices

- ex. Walmart & Target

specialty stores

concentrate on a limited number of complementary merchandise categories and provide a high level of service

- excellent outlets for new lines

drugstores

specialty stores that concentrate on pharmaceuticals and health and personal grooming merchandise

prescription pharmaceuticals represent nearly ____ of all sales for the two leading U.S. drugstores, CVS & Walgreens

half

category specialists

- aka big box retailers

- aka category killers

- offer a narrow but deep assortment of merchandise

- ex. Best Buy, IKEA, etc.

extreme-value retailers

- small, full-line discount stores that offer a limited merchandise assortment at very low prices

- target low-income customers

off-price retailers

offer an inconsistent assortment of brand name merchandise at a significant discount from the manufacturers MSRP

- ex. T.J. Maxx, Ross, etc.

service retailers

- a firm that primarily sells services rather than merchandise

- large and growing part of retail industry

what are retailers most fundamental activity?

providing the right mix of merchandise and service that satisfies the needs of the target market

how do retailers help manufacturers?

by providing a storage function

private-label brands

- aka store brands

- products developed by a retailer and sold only by that specific retailer

price

helps define the value of both the merchandise and service

the general price range

helps define its image

what must always be aligned with the other elements of a retailers strategy?

price

what is the key ingredient to success?

convenience

great locations =

competitive advantage

what can mean the difference between flat sales and a growing customer base?

promotion

mobile commerce (M-commerce)

product and service purchases through mobile devices

cooperative (co-op) advertising

an agreement that helps defray the costs of advertising by paying all or a portion of the advertising's production and media costs

atmospherics

controllable characteristics within a store that are intended to influence customer propensity to purchase

well trained sales personnel =

influence sale at the point of purchase

what is the five point selling technique?

1. approach

2. probe

3. present

4. listen

5. end

processes

encompass everything from ordering merchandise to transmitting credit card sales, and many of them remain relatively similar throughout the retail industry

share of wallet

- the percentage of the customer's purchases made from a particular retailer

- retailers may modify the 7 P's of retailing to increase this

what is the benefit of adding the internet channel?

the vast number of alternatives retailers can make available to consumers without crowding their aisles or increasing their square footage

individual retailers websites offer...

1. deeper assortments of merch (colors, brands, sizes)

2. a broader assortment (categories)

online chats

a type of personalized customer service where live chats where customers can click a button at any time and participate in an instant messaging conversation with a customer service rep.

personalized offering

an interactive web page can make suggestions to the shopper about items that he or she might like to see based on previous purchases or those of others

expanded market presence

- attractive to retailers that have a strong brand name but limited locations and distribution

integrated CRM (customer relationship management)

system with a centralized customer data warehouse that houses the history of each customer interaction with the retailer

with an integrated CRM system, firms can...

- efficiently handle complaints

- expedite returns

- target future promotions

- provide seamless experience to customers

retailers need to provide a consistent ____ _____ across all channels

brand image

customers expect pricing ______ for the same SKU across channels

consistency

what is the main struggle of using a supply chain?

unique skills and resources are needed to manage each channel

retailers tend to integrate ___ operations under an organization

all