Marketing Final Exam

benchmark or signpost items 13

Consumers often use the prices of benchmark or signpost items, such as a can of Coke, to form an overall impression of a store's prices.32 In addition, price is the most likely factor to influence consumers' assessment of merchandise value.33 When store prices are based on rebates, retailers must be careful to avoid negative consumer perceptions if the rebate processing time is long (e.g., six weeks).34

image 13

"the way in which the store is defined in the shopper's mind," partly by its functional qualities and partly by an aura of psychological attributes.40 In this definition, Page 354functional refers to mix elements such as price ranges, store layouts, and breadth and depth of merchandise lines. The psychological attributes are the intangibles such as a sense of belonging, excitement, style, or warmth. Image has been found to include impressions of the corporation that operates the store, the category or type of store, the product categories in the store, the brands in each category, merchandise and service quality, and the marketing activities of the store

Developing the advertisement program 15

1)Identifying the Target Audience To develop an effective advertising program, advertisers must identify the target audience. All aspects of an advertising program are likely to be influenced by the characteristics of the prospective consumer. Understanding the lifestyles, attitudes, and demographics of the target market is essential. 2)Specifying Advertising Objectives The guidelines for setting promotion objectives described in Chapter 14 also apply to setting advertising objectives. This step helps advertisers with other choices in the promotion decision process, such as selecting media and evaluating a campaign. Advertising with an objective of creating awareness, for example, would be better matched with a magazine than a directory such as the Yellow Pages. 3)Setting the Advertising Budget In 1990, advertisers paid $700,000 to place a 30-second ad during the Super Bowl. By 2016, the cost of placing a 30-second ad during Super Bowl 49 was $5 million. The escalating cost is related to the growing number of viewers: more than 110 million people watch the game. In addition, the audience is attractive to advertisers because research indicates it is equally split between men and women, who are likely to engage brands on social media before and after the game, and they look forward to watching the ads during the game.

Store location 13

A second aspect of the retailing mix involves choosing a location and deciding how many stores to operate. Department stores, which started downtown in most cities, have followed customers to the suburbs, and in recent years more stores have been opened in large regional malls. Most stores today are near several others in one of five settings: the central business district, the regional center, the community shopping center, the strip mall, or the power center.

Power center 13

A variation of the strip mall is called the power center,which is a huge shopping strip with multiple anchor (or national) stores such as Home Depot, Best Buy, or JCPenney. Power centers combine the convenience of location provided by strip malls with the power of national stores. These large strip malls often have two to five anchor stores and contain a supermarket, which brings the shopper to the power center on a weekly basis.

Advertising 14

Advertising Advertising is any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor. The paid aspect of this definition is important because the space for the advertising message normally must be bought. An occasional exception is the public service announcement, where the advertising time or space is donated. A full-page, four-color ad in Time magazine, for example, costs $352,500. The nonpersonal component of advertising is also important. Advertising involves mass media (such as TV, radio, and magazines), which are nonpersonal and do not have an immediate feedback loop as does personal selling. So before the message is sent, marketing research plays a valuable role; for example, it determines that the target market will actually see the medium chosen and that the message will be understood.

Everyday Low pricing 13

Although most retailers plan markdowns, many retailers use price discounts as part of their regular merchandising policy. Walmart and Home Depot, for example, emphasize consistently low prices and eliminate most markdowns with a strategy often called everyday low pricing (EDLP).

Retailer 12

An intermediary who sells to customers

Wholesaler 12

An intermediary who sells to other intermediaries, usually to retailers; term usually applies to consumer markets

MiddleMan 12

Any intermediary between the manufacturer and end user markets

Agent or Broker 12

Any intermediary with legal authority to act on behalf of the manufacturer

Developing and IMC Program 14

Because media costs are high, promotion decisions must be made carefully, using a systematic approach. Paralleling the planning, implementation, and evaluation steps described in the strategic marketing process (Chapter 2), the promotion decision process is divided into (1) developing, (2) executing, and (3) assessing the promotion program (see Figure 14-5). 1)Identifying the target audience The first step in developing the promotion program involves identifying the target audience, the group of prospective buyers toward which a promotion program will be directed. To the extent that time and money permit, the target audience for the promotion program is the target market for the firm's product, which is identified from primary and secondary sources of marketing information. The more a firm knows about its target audience—including demographics, interests, preferences, media use, and purchase behaviors—the easier it is to develop a promotional program. A firm might use a profile based on gender, age, and income, for example, to place ads during specific TV programs or in particular magazines. Similarly, a firm might use behavioral targeting—collecting information about your web-browsing behavior to determine the banner and display ads that you will see as you surf the Web. Behavioral targeting is discussed in more detail in Chapter 18.18 2)Specifying Promotion Objectives After the target audience has been identified, a decision must be reached on what the promotion should accomplish. Consumers can be said to respond in terms of a Page 380hierarchy of effects, which is the sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action.19 The five stages are: Awareness—the consumer's ability to recognize and remember the product or brand name. Interest—an increase in the consumer's desire to learn about some of the features of the product or brand. Evaluation—the consumer's appraisal of the product or brand on important attributes. Trial—the consumer's actual first purchase and use of the product or brand. Adoption—through a favorable experience on the first trial, the consumer's repeated purchase and use of the product or brand. 3)Setting the Promotion Budget After setting the promotion objectives, a company must decide how much to spend. The promotion expenditures needed to reach U.S. households are enormous. Four U.S. advertisers—P&G, AT&T, GM, and Comcast—each spend a total of more than $3 billion annually on promotion.20 Determining the ideal amount for the budget is difficult because there is no precise way to measure the exact results of spending promotion dollars. However, several methods can be used to set the promotion budget.21 Percentage of sales. In the percentage of sales budgeting approach, the amount of money spent on promotion is a percentage of past or anticipated sales. A common budgeting method,22 this approach is often staged in terms such as "our promotion budget for this year is 3 percent of last year's gross sales." See the Applying Marketing Metrics box for an application of the promotion-to-sales ratio to the soft-drink industry.23 Competitive parity. Competitive parity budgeting matches the competitor's absolute level of spending or the proportion per point of market share.24 All you can afford. Common to many businesses, the all-you-can-afford budgeting method allows money to be spent on promotion only after all other budget items—such as manufacturing costs—are covered.25 Objective and task. The best approach to budgeting is objective and task budgeting, whereby the company (1) determines the promotion objectives, (2) outlines the tasks to accomplish those objectives, and (3) determines the promotion cost of performing those tasks.26

The many forms of personal selling 17

Broadly speaking, three types of personal selling exist: order taking, order getting, and customer sales support activities. Whereas some firms use only one of these types of personal selling, others use a combination of all three. 1)Order taker processes routine orders or reorders for products that were already sold by the company. The primary responsibility of order takers is to preserve an ongoing relationship with existing customers and maintain sales. Two types of order takers exist. Outside order takers visit customers and replenish inventory stocks of resellers, such as retailers or wholesalers. For example, Frito-Lay salespeople call on supermarkets, convenience stores, and other establishments to ensure that the company's line of snack products (such as Lay's potato chips and Doritos and Tostitos tortilla chips) is in adequate supply. In addition, outside order takers often provide assistance in arranging displays. Inside order takers, also called order clerks or salesclerks, typically answer simple questions, take orders, and complete transactions with customers. Many retail clerks are inside order takers. Inside order takers are often employed by companies that use inbound telemarketing, the use of toll-free telephone numbers that customers can call to obtain information about products or services and make purchases. In business-to-business settings, order taking arises in straight rebuy situations as described in Chapter 5. 2) Order getter sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on customers' use of a product or service. Like order takers, order getters can be inside (an automobile salesperson) or outside (a Xerox salesperson). Order getting involves a high degree of creativity and customer empathy and is typically required for selling complex or technical products with many options, so considerable product knowledge and sales training are necessary. In modified rebuy or new-buy purchase situations in business-to-business selling, an order getter acts as a problem solver who identifies how a particular product may satisfy a customer's need. Similarly, in the purchase of a service, such as insurance, an insurance agent can provide a mix of plans to satisfy a buyer's needs depending on income, stage of the family's life cycle, and investment objectives. 3) Customer sales support personnel augment the selling effort of order getters by performing a variety of services. For example, missionary salespeople do not directly solicit orders but rather concentrate on performing promotional activities and Page 458introducing new products. They are used in the pharmaceutical industry, where they encourage physicians to prescribe a firm's product. Actual sales are made through wholesalers or directly to pharmacists who fill prescriptions. Sales engineers specialize in identifying, analyzing, and solving customer problems. These salespeople bring know-how and technical expertise to the selling situation but often do not actually sell products and services. Sales engineers are popular in selling business products such as chemicals and heavy equipment. Many firms engage in cross-functional team selling, the practice of using an entire team of professionals in selling to and servicing major customers.9 Team selling is used when specialized knowledge is needed to satisfy the different interests of individuals in a customer's buying center. A selling team might consist of a salesperson, a sales engineer, a service representative, and a financial executive, each of whom would deal with a counterpart in the customer's firm. Selling teams take different forms. In conference selling, a salesperson and other company resource people meet with buyers to discuss problems and opportunities. In seminar selling, a company team conducts an educational program for a customer's technical staff, describing state-of-the-art developments. IBM and Xerox pioneered cross-functional team selling in working with prospective buyers. Since then, other firms have embraced this practice to create and sustain value for their customers, as described in the Marketing Matters box.10 Marketing Matters

Distributor 12

Describes intermediaries who perform a variety of distributions functions, including selling, maintaining inventories, extending credit and so on;

Selecting the Right Media 15

Every advertiser must decide where to place its advertisements. The alternatives are the advertising media, the means by which the message is communicated to the target audience. Newspapers, magazines, radio, and TV are examples of advertising media. Media selection is related to the target audience, type of product, nature of the message, campaign objectives, available budget, and the costs of the alternative media. Figure 15-1 shows the distribution of the $238 billion spent on advertising by medium

Strip mall 13

Many neighborhoods have clusters of stores, referred to as a strip mall, to serve people who are within a 5- to 10-minute drive. Gas station, hardware, laundry, grocery, and pharmacy outlets are commonly found in a strip mall. Unlike the larger shopping centers, the composition of these stores is usually unplanned.

Sales per square foot 13

Sales per square foot= Total sales / Selling area in square feet

Creating Customer Solutions and Value through Salespeople: Relationship Selling 17

Salespeople can create value by easing the customer buying process. This happened at TE Connectivity, a producer of electrical products. Salespeople and customers had a difficult time getting product specifications and performance data on the company's 70,000 products quickly and accurately. The company now has all of its information on its website, which can be downloaded instantly by salespeople and customers. Customer value is also created by salespeople who follow through after the sale. At Jefferson Smurfit Corporation, a multibillion-dollar supplier of packaging products, one of its salespeople juggled production from three of the company's plants to satisfy an unexpected demand for boxes from General Electric. This person's action led to the company being given GE's Distinguished Supplier Award. Customer value creation is made possible by relationship selling, the practice of building ties to customers based on a salesperson's attention and commitment to customer needs over time. Relationship selling involves mutual respect and trust among buyers and sellers. It focuses on creating long-term customers, not a one-time sale. A survey of 300 senior sales executives revealed that 96 percent consider "building long-term relationships with customers" to be the most important activity affecting sales performance.5 Relationship and partnership selling represent another dimension of customer relationship management. Both emphasize the importance of first learning about customer needs and wants and then tailoring solutions to customer problems as a means to customer value creation. Recent research suggests that a salesperson may have a genetic predisposition to create customer value. See the Marketing Matters box for details.6

Same-store sales growth 13

Same-store sales growth= (Store sales in year 2−Store sales in year 1) / Store sales in year 1

Maintained Mark up 13

The difference between the final selling price and retailer cost, also called the gross margin

The Personal Selling Process: Building Relationships 17

The personal selling process consists of six stages: (1) prospecting, (2) preapproach, (3) approach, (4) presentation, (5) close, and (6) follow-up (see Figure 17-2). Prospects -the search for and qualification of potential customers. preapproach - involves obtaining further information on the prospect and deciding on the best method of approach. approach - involves the initial meeting between the salesperson and the prospect, where the objectives are to gain the prospect's attention, stimulate interest, and build the foundation for the sales presentation itself and the basis for a working relationship. The first impression is critical at this stage, and it is common for salespeople to begin the conversation with a reference to common acquaintances, a referral, or even the product or service itself. Which tactic is taken will depend on the information obtained in the prospecting and preapproach stages. presentation - is at the core of the order-getting selling process, and its objective is to convert a prospect into a customer by creating a desire for the product or service. Three major presentation formats exist: (1) stimulus-response format, (2) formula selling format, and (3) need-satisfaction format. close - involves obtaining a purchase commitment from the prospect. This stage is the most important and the most difficult because the salesperson must determine when the prospect is ready to buy. Telltale signals indicating a readiness to buy include body language (prospect reexamines the product or contract Page 465closely), statements ("This equipment should reduce our maintenance costs"), and questions ("When could we expect delivery?"). follow up - includes making certain the customer's purchase has been properly delivered and installed and addressing any difficulties experienced with the use of the item. Attention to this stage of the selling process solidifies the buyer-seller relationship. Research shows that the cost and effort to obtain repeat sales from a satisfied customer is roughly half of that necessary to gain a sale from a new customer.19 In short, today's satisfied customers become tomorrow's qualified prospects or referrals.

the Communication process 14

The process of conveying a message to others that requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding. is the process of conveying a message to others, and it requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding 3 (see Figure 14-1). The source may be a company or person who has information to convey. The information sent by a source, such as a description of a new smartphone, forms the message. The message is conveyed by means of a channel of communication such as a salesperson, advertising media, or public relations tools. Consumers who read, hear, or see the message are the receivers.

Marketing Matters: Science and Selling: Is customer value creation in your genes? 17

Their research identifies a genetic marker, the 7R variant of the DRD4 gene, that is correlated with a salesperson's predisposition or willingness to interact with customers and learn about their problems in order to meet their needs. The researchers also found that the presence of the A1 variant of the DRD2 gene is correlated with predisposition or tendency to try to persuade customers to buy a given product rather than listen to their needs. These two different genetic markers help explain the difference between a salesperson's customer orientation versus sales orientation. A customer orientation is guided by such ideas as, "I try to align customers who have problems with products that will help them solve their problems," where the aim is to satisfy mutual needs and the hope is to build a long-term relationship. In contrast, a sales orientation is driven by notions such as, "I try to sell customers all I can convince them to buy, even if I think it is more than a wise customer should buy." In this case, the motivation is to satisfy one's own short-term interests and not necessarily the needs of the customer. Faced with a selling situation, do you have a sales orientation or a customer orientation? Customer value creation may be in your genes!

Scheduling the Advertising 15

There is no correct schedule to advertise a product, but three factors must be considered. First is the issue of buyer turnover, which is how often new buyers enter the market to buy the product. The higher the buyer turnover, the greater the amount of advertising required. A second issue in scheduling is the purchase frequency; the more frequently the product is purchased, the less repetition is required. Finally, companies must consider the forgetting rate, the speed with which buyers forget the brand if advertising is not seen. Setting schedules requires an understanding of how the market behaves. Most companies tend to follow one of three basic approaches: Continuous (steady) schedule. When seasonal factors are unimportant, advertising is run at a continuous or steady schedule throughout the year. Flighting (intermittent) schedule. Periods of advertising are scheduled between periods of no advertising to reflect seasonal demand. Pulse (burst) schedule. A flighting schedule is combined with a continuous schedule because of increases in demand, heavy periods of promotion, or introduction of a new product.

Category management 13

This approach assigns a manager the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other, with the objective of maximizing sales and profits in the category. For example, a category manager might be responsible for shoes in a department store or paper products in a grocery store. As such, he or she would consider trade deals, order costs, and the between-brand effects of price range changes to determine brand assortment, order quantities, and prices.46

The Five Elements of the Promotional Mix 14

To communicate with consumers, a company can use one or more of five promotional alternatives: advertising, personal selling, public relations, sales promotion, and direct marketing. Figure 14-2 summarizes the distinctions among these five elements. Three of these elements—advertising, sales promotion, and public relations—are often said to use mass selling because they are used with groups of prospective buyers. In contrast, personal selling uses customized interaction between a seller and a prospective buyer. Personal selling activities include face-to-face, telephone, and interactive electronic communication. Direct marketing also uses messages customized for specific customers.

frequency 15

When advertisers want to reach the same audience more than once, they are concerned with ----, the average number of times a person in the target audience is exposed to a message or advertisement. Like reach, greater frequency is generally viewed as desirable. Studies indicate that with repeated exposure to advertisements consumers respond more favorably to brand extensions.17

gross rating points 15

When reach (expressed as a percentage of the total market) is multiplied by frequency, an advertiser will obtain a commonly used reference number called ----. To obtain the appropriate number of --- to achieve an advertising campaign's objectives, the media planner must balance reach and frequency. The balance will also be influenced by cost.

Dealer 12

a more imprecise term for distributor that can mean the same as distributor, retailer, wholesaler, and so forth

Everyday fair pricing 13

advocated by retailers that may not offer the lowest price but try to create value for customers through service and the total buying experience.

Direct Marketing Channels 12

allow consumers to buy products by interacting with various Page 321advertising media without a face-to-face meeting with a salesperson. Direct marketing channels include mail-order selling, direct-mail sales, catalog sales, telemarketing, interactive media, and televised home shopping (the Home Shopping Network).

Dual Distribution 12

an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product. For example, GE sells its large appliances directly to home and apartment builders but uses retail stores, including Lowe's home centers, to sell to consumers.

Regional shopping centers 13

consist of 50 to 150 stores that typically attract customers who live or work within a 5- to 10-mile range. These large shopping areas often contain two or three anchor stores, which are well-known national or regional stores such as Sears, Saks Fifth Avenue, and Bloomingdale's. The largest variation of a regional center in North America is the West Edmonton Mall in Alberta, Canada. This shopping center is a conglomerate of more than 800 stores, the world's largest indoor amusement park, more than 100 restaurants, a movie complex, and two hotels, all of which attract 30 million visitors each year.36

merchandise line 13

describes how many different types of products a store carries and in what assortment. The alternative types of outlets are discussed in greater detail in the following pages.

form of ownership 13

distinguishes retail outlets based on whether independent retailers, corporate chains, or contractual systems own the outlet. 1) Independent Retailer One of the most common forms of retail ownership is the independent business owned by an individual. Independent retailers account for most of the 1.1 million retail establishments in the United States and include hardware stores, convenience stores, clothing stores, and computer and software stores. In addition, there are 26,700 jewelry stores, 18,500 florists, and 22,100 sporting goods and hobby stores. For the independent retailer, the advantage of this form of ownership is simple: The owner is the boss. For customers, the independent store can offer convenience, personal service, and lifestyle compatibility.7 2)Corporate Chain A second form of ownership, the corporate chain, involves multiple outlets under common ownership. Macy's, Inc., for example, operates 775 Macy's department stores in 45 states. Macy's also owns 37 Bloomingdale's, which compete with other chain stores such as Saks Fifth Avenue and Neiman Marcus. Finally, Macy's recently acquired Bluemercury, which includes 62 specialty beauty and spa services stores. In a chain operation, centralization in decision making and purchasing is common. Chain stores have advantages in dealing with manufacturers, particularly as the size of the chain grows. A large chain can bargain with a manufacturer to obtain good service or volume discounts on orders. Target's large volume makes it a strong negotiator with manufacturers of most products. For consumers, the buying power of chains translates into lower prices compared with other types of stores. Consumers also benefit in dealing with chains because there are multiple outlets with similar merchandise and consistent management policies. Retailing has become a high-tech business for many large chains. Walmart, for example, has developed a sophisticated inventory management and cost control system that allows rapid price changes for each product in every store. In addition, stores such as Walmart and Target are implementing pioneering new technologies such as radio frequency identification (RFID) tags to improve the quality of information available about products. 3) Contractual systems involve independently owned stores that band together to act like a chain. Recall that in Chapter 12, we discussed three kinds of contractual vertical marketing systems: retailer-sponsored cooperatives, wholesaler-sponsored voluntary chains, and franchises (see Figure 12-6). One retailer-sponsored cooperative is Associated Grocers, which consists of neighborhood grocers that all agree with several other independent grocers to buy their goods directly from food manufacturers. In this way, members can take advantage of volume discounts commonly available to chains and also give the impression of being a large chain, which may be viewed more favorably by some consumers. Wholesaler-sponsored voluntary chains such as Independent Grocers Alliance (IGA) try to achieve similar benefits.

Indirect channel 12

intermediaries are inserted between the producer and consumers and perform numerous channel functions

off-price retailing 13

involves selling brand-name merchandise at lower than regular prices. The difference between the off-price retailer and a discount store is that off-price merchandise is bought by the retailer from manufacturers with excess inventory at prices below wholesale prices. The discounter, however, buys at full wholesale prices but takes less of a markup than traditional department stores. Because of this difference in the way merchandise is purchased by the retailer, selection at an off-price retailer is unpredictable, and searching for bargains has become a popular activity for many consumers.

level of service 13

is used to describe the degree of service provided to the customer. Three levels of service are provided by self-, limited-, and full-service retailers. 1)Self-service requires that customers perform many functions during the purchase process. Warehouse clubs such as Costco, for example, are usually self-service, with all nonessential customer services eliminated. Many gas stations, supermarkets, and airlines today also have self-service lanes and terminals. Video retailer Redbox has 35,000 kiosks throughout the United States—and operates without a single clerk. New forms of self-service are being developed at convenience stores, fast-food restaurants, and even coffee shops! Shop24 offers self-service, automated convenience stores in more than 250 international locations and is expanding into the college and university market. At Zipcar you sign up, receive a Zipcard, book online, walk to a car, scan your card across a reader on the windshield to open the doors, and drive away! In general, the trend is toward retailing experiences that make customers co-creators of the value they receive. A recent survey showed that airline terminals with automated kiosks reduce the wait time for travelers by 22 percent.9 2)Limited Service Limited-service outlets provide some services, such as credit and merchandise return, but not others, such as clothing alterations. General merchandise stores such as Walmart, Kmart, and Target are usually considered limited-service outlets. Customers are responsible for most shopping activities, although salespeople are available in departments such as consumer electronics, jewelry, and lawn and garden. 3)Full Service Full-service retailers, which include most specialty stores and department stores, provide many services to their customers. Neiman Marcus, Nordstrom, and Saks Fifth Avenue, for example, all rely on better service to sell more distinctive, higher-margin goods and to retain their customers. Nordstrom offers a wide variety of services, including on-site alterations and tailoring; free exchanges and easy returns; gift cards; credit cards through Nordstrom Bank; a 7-days-a-week customer service line; a live chat line with beauty, design, and wedding specialists; online shopping with in-store pickup; catalogs; and a four-level loyalty program called Nordstrom Rewards. During the next few years the company plans to spend $4.3 billion on additional services and improvements such as an in-store return capability for online purchases, personalized offers to rewards program members, and "smart" fitting rooms.10

Markdown 13

occurs when the product does not sell at the original price and an adjustment is necessary. (Discounting a product)

strategic channel alliances, 12

one firm's marketing channel is used to sell another firm's products. Strategic alliances are popular in global marketing, where the creation of marketing channel relationships is expensive and time-consuming. For example, General Mills and Nestlé Page 322have an extensive alliance that spans about 140 international markets from Mexico to China.

Mark up 13

refers to how much should be added to the cost the retailer paid for a product to reach the final selling price.

Cost per Thousand 15

refers to the cost of reaching 1,000 individuals or households with the advertising message in a given medium (M is the Roman numeral for 1,000). See the Applying Marketing Metrics box for an example of the use of ----- in media selection.

Multi-channel Marketing 12

sometimes called omnichannel marketing, is the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online. interacting with customers using both indirect and direct communication channels - websites, retail stores, mail order catalogs, direct/e- mail, mobile

original mark up 13

the difference between retailer cost and initial selling price

Reach 15

the number of different people or households exposed to an advertisement. The exact definition of reach sometimes varies among alternative media. Newspapers often use reach to describe their total circulation or the number of different households that buy the paper. Television and radio stations, in contrast, describe their reach using the term rating—the percentage of households in a market that are tuned to a particular TV show or radio station. In general, advertisers try to maximize reach in their target market at the lowest cost.

central business district 13

the oldest retail setting, the community's downtown area. Until the regional outflow to suburbs, it was the major shopping area, but the suburban population has grown at the expense of the downtown shopping area. Consumers often view central business district shopping as less convenient because of lack of parking, higher crime rates, and exposure to the weather. Many cities such as Louisville, Denver, and San Antonio have implemented plans to revitalize shopping in central business districts by attracting new offices, entertainment, and residents to downtown locations.

Direct Channel 12

the producer and the ultimate consumers deal directly with each other. Many products and services are distributed this way

The Retail Life Cycle 13

the stages of the retail life cycle and where various forms of retail outlets are currently positioned along its spectrum. Early growth is the stage of emergence of a retail outlet, with a sharp departure from existing competition. Market share rises gradually, although profits may be low because of start-up costs. In the next stage, accelerated development, both market share and profit achieve their greatest growth rates. Usually multiple outlets are established as companies focus on the distribution element of the retailing mix. In this stage, some later competitors may enter. Wendy's, for example, appeared on the hamburger chain scene almost 20 years after McDonald's had begun operation. The key goal for the retailer in this stage is to establish a dominant position in the fight for market share.

Shopper Marketing 13

the use of displays, coupons, product samples, and other brand communications to influence shopping behavior in a store. Shopper marketing can also influence behavior in an online shopping environment and when shoppers use Page 355 smartphone apps to identify shopping needs or make purchase decisions.43