Marketing

Major Type of Retail Stores

General-Merchandise Retailers -Department Stores -Discount Stores -Supermarkets -Superstores -Hypermarkets -Warehouse clubs -Warehouse showrooms -Convenience stores

Superstores

Giant retail outlets that carry food and nonfood products found in supermarkets, as well as most routinely purchased consumer products

Retail Positioning

Identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment

Criticisms and Defenses of Promotion

Is Promotion Deceptive? Does Promotion Increase Prices? Does Promotion Create Needs? Does Promotion Help Customers Without Costing Too Much? Should Potentially Harmful Products Be Promoted? Do promotions encourage materialism?

Personal Selling Limitations

Is an expensive form of advertising Is labor intensive and time consuming

Corporate Strategy

Issues Influencing Corporate Strategy Development -Corporate culture -Competition -Differentiation -Diversification -Interrelationships among business units -Environment concerns and social issues

Department stores

Large retail organizations characterized by wide product mixes and organized into separate departments to facilitate marketing efforts and internal management

Supermarkets

Large, self-service stores that carry a complete line of food products, along with some nonfood products

Warehouse clubs

Large-scale, members-only establishments that combine features of cash-and-carry wholesaling with discount retailing

Supply Chain Management

Long-term partnerships among marketing channel members that reduce inefficiencies, costs, and redundancies and develop innovative approaches to satisfy customers. Optimizes costs throughout the whole channel for efficiency and service. Includes all entities that facilitate product distribution and benefit from cooperative efforts. Arises from the need to achieve a more competitive position.

Characteristics of the Target Market

Market size, geographic distribution, and demographics help dictate the choice of promotion mix elements.

Retailers

Organizations that purchase products for the purpose of reselling them to ultimate consumers -Retailers add value—shopping convenience, services, and purchasing assistance to customers -Retailers create utility—time, place, possession, and form Success in retailing comes from having a strong customer focus coupled with desired levels of service, product quality, and innovation.

Dealing with Unfavorable Public Relations

Prevention of negative incidents and events -Safety programs, inspections, and effective quality control procedures Preparedness for negative incidents and events -Predetermined policies and procedures that expedite news coverage -Being forthright with the press and the public

Warehouse showrooms

Retail facilities in large, low-cost buildings with large on-premise inventories and minimal services

Discount stores

Self-service, general merchandise stores offering brand name and private brand products at low prices

Convenience stores

Small self-servicestore offering a narrow product assortment in a convenient location.

Hypermarkets

Stores that combine supermarket and discount shopping in one location

Product Placement

Strategic location of products or product promotions within tv programs or movies to reach the product's target market. -Examples: Oprah's favorite things

Identifying and Analyzing the Target Audience

Target audience is the group of people at whom advertisements are aimed -Location and geographic distribution -Distribution of demographic factors -Lifestyle information -Consumer attitudes

Channel Power

The ability of one channel member to influence another member's goal achievement

Channel Captain

The dominant member (producer, wholesaler, or retailer) of a marketing channel or supply chain -Establishes channel policies and coordinates development of the marketing mix

Direct Selling

The marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace -Party plans: hosting groups to view a product demonstration and encouraging participants to purchase the products Benefits -Personal attention to customer -Convenience of time and place of presentation Limitations -High costs make it the most expensive form of selling -Negative consumer view of direct selling

Telemarketing

The performance of marketing-related activities by telephone

Nonstore Retailing

The selling of products outside the confines of the retail facility

Wholesaling

Transactions in which products are bought for resale, for making other products, or for general business operations

Retailing

Transactions in which ultimate consumers are the buyers

Exclusive Distribution

Using a single outlet in a fairly large geographic area to distribute a product -Expensive, high-quality products purchased infrequently Exclusive outlets provide an incentive to sellers in limited markets Dealers carry complete inventory and have trained staff for sales and service

Intensive Distribution

Using all available outlets to distribute a product. -Convenience products with high replacement rates Provides availability and reduces search time. Availability is more important than outlet type

Selective Distribution

Using only some available outlets to distribute a product - Shopping products and durable goods with low replacement rates High qualification requirements for intermediaries to distribute, sell, service, and support products

Public Relations

communication efforts used to create/maintain favorable relations

Copy

the verbal portion of advertisements Includes headlines, subheadlines, body copy, and signature

Public Relations

-A broad set of communication efforts used to create and maintain favorable relationships between the organization and its stakeholders -Publicity is a nonpersonal communication in a news story form about an organization or its products, or both, transmitted through a mass medium for free

Promotion Resources, Objectives, and Policies

-A limited promotional budget affects the number and types of promotion mix components affordable to a firm. -Objectives and policies influence the types of promotion selected.

Establishing an Organizational Mission and Goals

-A long-term view, or vision, of what the organization wants to become -Mission statement answers two questions: Who are our customers? What is our core competency?

Determining the Advertising Appropriation

-Advertising budget for a specified period -Geographic size of the market and distribution of buyers within the market are important factors in determining the size of the budget

Traditional Specialty Retailers

-Also called "limited-line" and "single-line" retailers -Carry a narrow product mix with deep product lines (e.g., pet supplies) -Have higher costs and higher margins -Provide more product selection (first-line brands), product expertise, and high levels of personal service

Creating the Advertising Message

-Artwork -Illustrations -Layout -Copy Guidelines -Copy

Creating the Advertising Platform

-Basic issues or selling points to be included in the advertising campaign -Issues in the selection and use of the product that are important to customers

Off-Price Retailers

-Buy manufacturers' seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts -Charge less than department stores for comparable merchandise and offer few customer services -Have established long-term relationships with suppliers for continuing supplies of reduced-price goods

Trade Sales Promotion Methods

-Buying Allowance -Buy-Back Allowance -Scan-back allowance -Merchandise allowances -Cooperative Advertising and Dealer Listings -Free Merchandise and Gifts -Premium (Push) Money -Sales Contests

Word-of-mouth communication has a strong impact on consumers' buying proclivities.

-Buzz marketing and viral advertising are marketers' attempts to take advantage of word-of-mouth communications -Buzz marketing is an attempt to create a trend or acceptance of a product through word-of-mouth -Viral marketing is a strategy to get users of the Internet to pass on ads and promotions to others.

Promotion

-Communication to build and maintain relationships by informing and persuading one or more audiences -Overall role of promotion is to stimulate demand by +building and enhancing customer relationships. +focusing customers on information about company activities and products. +promoting programs that help selected groups to build goodwill. +sponsoring special events that generate positive promotion of an organization and its brands.

Franchising Disadvantages

-Control over aspects of the business and its operations by franchiser -Expense of continuing franchise royalties and advertising fees -Lack of control of franchisees by franchisor

Consumer Sales Promotion Methods

-Coupons and Cents-Off Offers -Refunds and Rebates -Frequent User Incentives -Point-of-Purchase Materials -Free Samples and Premiums -Consumer Games, Contests, and Sweepstakes

Publicity Advantages

-Credibility -News value -Significant word-of-mouth communications -A perception of being endorsed by the media

Selecting Marketing Channels

-Customer Characteristics -Product Attributes -Type of Organization -Competition -Environmental forces -Characteristics of Intermediaries

Direct Marketing

-Direct Marketing -Nonstore Retailing -Catalog Marketing

Sources of Channel Conflict

-Disagreements arising among channel members -Communication difficulties jeopardizing coordination -Increased use of multiple distribution channels by manufacturers creating conflicts with distributors and retailers -Intermediaries diversifying into and offering competing products -Producers attempting to circumvent intermediaries and dealing directly with retailers

Legal Issues in Channel Management

-Dual Distribution -Restricted Sales Territories -Tying Arrangements -Full-Line Forcing -Exclusive Dealing

Franchising Advantages

-Enables startup with limited capital -Provides developed and proven business to franchisee -Attracts customers with established brand name -Allows immediate market entry -Motivates franchisee to succeed

Advertising Benefits

-Extremely cost efficient (cost per person) in reaching a large audience -Repeatable several times and in several media markets -Adds value to a product and enhances a firm's image

Types of Locations

-Free-standing structures -Traditional business districts

Copy Guidelines

-Identify a specific desire or problem -Recommend the product as the best way to satisfy the desire or solve the problem -State product benefits -Substantiate advertising claims -Ask the buyer to take action

Developing an Advertising Campaign

-Identifying and Analyzing the Target Audience -Defining the Advertising Objectives -Creating the Advertising Platform -Determining the Advertising Appropriation -Developing the Media Plan

Retail Store Location

-Intended target market -Kinds of products -Suitability site for customer access -Characteristics of existing retail operations

Personal Selling Advantages

-Is a more specific form of advertising -Has greater impact on consumers -Provides immediate feedback (kinesic, proxemic, and tactile communications)

Channel Activities Performed by Intermediaries

-Marketing Information -Marketing Management -Facilitating Exchanges -Promotion -Price -Physical Distribution

Publicity Limitations

-Must be accepted by news media -Must be timely, interesting, accurate, and in the public interest -Inability to control content or time of release to public

Publicity

-News Release -Feature Article -Captioned photograph -Press conference

Selecting Promotion Mix Elements

-Promotion Resources, Objectives, and Policies -Characteristics of the Target Market -Costs and Availability of Promotional Methods -seem large, but cost per individual may be small -Push and Pull Channel Policies -Word-of-mouth communication has a strong impact on consumers' buying proclivities.

Strategic Issues in Retailing

-Retail Store Location -Types of Locations -Retail Positioning -Store Image

Services Provided by Wholesalers

-Serve as an extension of the producer's sales force through contact with suppliers and retailers -Lend financial assistance for the distribution channel +Transporting and warehousing inventories +Assuming credit risks of buyers/customers +Purchasing producers' entire output: converting producer's output immediately to working capital +Channeling information from and to sellers and buyers

Developing the Media Plan

-Specifies media vehicles (e.g., magazines, radio, and television stations, and newspapers) and the schedule for running the advertisements -Plan objectives focus on achieving the reach and frequency that the budget will allow. +Reach: the percentage of consumers in a target market exposed to an advertisement in a specified period +Frequency: the number of times targeted consumers are exposed to an advertisement in a specified period

Benefits of Cooperation

-Speeds up inventory replacement -Improves customer service -Reduces distribution costs

Direct-Response Marketing

-Telemarketing -Television Home Shopping -Online Retailing

Direct Marketing

-The use of telephone, internet, and nonpersonal media to introduce products to consumers, who then can purchase them via mail, telephone, or the Internet -A type of nonstore retailing

Examples of Category Killers

-Toys 'R' Us -Home Depot -Best Buy -Office Depot -PETsMart -Barnes & Noble

Specialty Retailers

-Traditional Specialty Retailers -Off-Price Retailers -Category Killers

Vertical Channel Integration

-Two or more stages of the marketing channel are under one management -Channel members coordinate their efforts to reach a target market

Improving Channel Cooperation

-Unifying channel to maintain market order -Agreeing to direct efforts toward common objectives -Precisely defining each channel member's tasks

Channel Integration

-Vertical Channel Integration -Vertical Marketing System (VMS)

Defining the Advertising Objectives

-What does the firm hope to accomplish with the campaign? -Objectives should be clear, precise, and measurable. -Increased sales (units or dollars) and/or increased product or brand awareness

Promotion Mix

A combination of promotional methods used to promote a specific PERSONAL SELLING, ADVERTISING, PUBLIC RELATIONS, SALES PROMOTION

Vertical Marketing System (VMS)

A marketing channel managed by a single channel member to achieve efficient, low-cost distribution -Corporate VMS -Administered VMS -Contractual VMS

Marketing Intermediary

A middleman linking producers to other middlemen or to ultimate consumers through contractual arrangements or through the purchase and resale of products

Advertising

A paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media

Personal Selling

A paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation

Marketing Strategy

A plan of action for identifying and analyzing a target market and developing a marketing mix to meet the needs of that market Target Selection Creating Marketing Mix -Have the skills and resources required for product design, pricing, distribution, and promotion -Maintain strategic consistency and flexibility in marketing mix decisions

Catalog Marketing

A type of marketing in which an organization provides a catalog from which customers can make selections and place orders by mail, telephone, or the Internet -Consumer advantages are efficiency and convenience -Marketer advantages are lower location, facility, selling, and operating costs. -Disadvantages are inflexibility and limited selection and local service availability.

Direct-Response Marketing

A type of marketing that occurs when a retailer advertises a product and makes it available through mail or telephone orders

Marketing Plan

A written document that specifies the activities to be performed to implement and control an organization's marketing activities

Sales Promotion

An activity or material that acts as a direct inducement, offering added value or incentive for the product, to resellers, salespeople, or consumers

Franchising

An arrangement in which a supplier (franchiser) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration

Wholesaler

An individual or organization that facilitates and expedites wholesale transactions -Handles the physical distribution of goods -Furnishes channel information to facilitate and manage the supply channel

Store Image

Atmospherics -The physical elements in a store's design that appeal to consumers' emotions and encourage buying -Interior layout, colors, furnishings, and lighting -Exterior storefront and entrance design, display windows, and traffic congestion

Category Killers

Concentrate on a major product category and compete on the basis of low prices and product availability

Other Types of Nonstore Retailing

Direct Selling