mktg321 ch15

with direct-response marketing, in general, products must be priced above ___ to justify the advertising and distribution costs

$20

in choosing a location, what do retailers look at? (4)

- relative ease to and from the site - characteristics of the site itself - rental, leasing, ownership terms - compatibility with other retailers (stores that complement each other)

what 3 things are key determinants of a store image?

- store environment - merchandise quality - service quality

department stores organize related product lines into separate departments (cosmetics, home goods, apparel, etc). this arrangement facilitates what 2 things?

1. marketing 2. internal management

3 questions to ask with starting retail stores

1. what are you going to put in your store? merchandise 2. how are you going to sell them? online or brick-and-mortar? where would the store be located? what is the website going to look like? what aisle/shelf? (atmospheric, store layout) 3. services (return policy, hours of oper, shipping costs)

retail apocalypse

23 retailers closing

personalization fell off in the early 1900s because ___

9/10 of the people can't find the help they need

category killer

a large speciality store that concentrates on a major product category and competes on the basis of low prices and broad product availability

webrooming

a practice where a shopper researches products online and then heads to the nearest store to make the actual purchase

general-merchandise retailer

a retail establishment that offers a variety of product lines that are stocked in considerable depth

catalog marketing

a type of marketing in which an organization provides a catalog from which customers make selections and place orders by mail, telephone, or the internet

LL Bean return policy

abuse, only 15% of returns were legit, lost $250 mil researched target market then changed return policy to 1 yr, got sued, negative publicity

interior atmospheric elements include ___

aesthetic considerations (such as lighting, wall and floor coverings, dressing facilities, and store fixtures)

lifestyle shopping center are often located near ___

affluent neighborhoods

Rob Stevens is the head of a company that produces computer software for production scheduling. The firm is small and presently does not generate enough volume to justify hiring a sales force. The firm is probably using ___________ to maintain contact with the firms using its products.

agents

commission merchants

agents that receive goods on consignment from local sellers and negotiate sales in large, central markets

retailing

all transactions in which the buyer intends to consume the product through personal, family, or household use

wholesaler

an individual or organization that sells products that are bought for resale, for making other products, or for general business operations

retailer

an organization that purchases products for the purpose of reselling them to ultimate customers

franchising

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

advantages of catalog retailing for retailers (3)

being able to locate in remote, low-cost areas save on expensive store fixtures reduce both personal selling and store operating expenses

speciality stores usually offer better ___ and more ___ than department stores, their main competitors

better selection and more sales expertise

category management is an important part of developing a ___

collaborative supply chain, which enhances value for customers

successful category management involves ___

collecting and analyzing data on sales and consumers and sharing the information between retailer and manufacturer

hypermarkets

combine supermarket and discount store shopping in one location

supply chain starts with ___

customers

direct selling gives the marketer an opportunity to ___

demonstrate the product in a comfortable environment where it most likely would be used

general-merchandise retailers primarily consists of what type of stores? (8)

department stores convenience stores supermarkets discount stores warehouse clubs superstores hypermarkets warehouse showrooms

location is important in strategic decision making because it ___

dictates the limited geographic trading area from which a store draws its customers

___ is not a form of direct marketing

direct selling

a channel of distribution is defined as a group of individuals and organizations that ___

directs the flow from producers to consumers driving force should be customer satisfaction

superstores combine the features of ___ and ___

discount stores and supermarkets

agents and brokers negotiate purchases and expedite sale, but do not ___. they are sometimes called ___

do not take title to products, they are sometimes called functional middlemen

which of the following does not take possession of the merchandise?

drop shippers

what is the key combo to the future of retailing?

efficiency + personalization

advantages of catalog retailing for customers (2)

efficiency and convenience

multichannel retailing

employing multiple distribution channels that complement their brick-and-mortar stores with websites, catalogs, and apps where consumers can research products, read other buyers' reviews, and make actual purchases (having multiple ways to buy something)

customers can evaluate different options when retailers ___

facilitate comparison shopping

by capitalizing on ___ (5), speciality retailers position themselves strategically to attract customers in specific market segments

fashion trends service personnel atmosphere location

which of the following is a benefit of franchising for the franchisor?

fast and selective product distribution

to keep prices lower than supermarkets and discount stores, warehouse clubs offer ___

few services, and keep advertising to a minimum

television home shopping

form of selling in which products are presented to television viewers, who can buy them by calling a toll-free number and paying with a credit card

what 2 broad categories do merchant wholesalers fall into?

full-service wholesalers limited service

speciality-line wholesalers

full-service wholesalers that carry only a single product line or a few items within a product line

limited-line wholesalers

full-service wholesalers that carry only few product lines but many products within those lines (groceries, lighting fixtures, oil-well drilling equipment)

general-merchandise wholesalers

full-service wholesalers with a wide product mix but limited depth within product lines (drugs, nonperishable foods, cosmetics, detergents, and tobacco)

rack jobbers

full-service, speciality line wholesalers that own and maintain display racks in stores (non-food w high profit margin)

two general categories of retailers

general-merchandise retailer speciality retailers

3 categories of full-service wholesalers

general-merchandise wholesalers limited-line wholesalers speciality-line wholesalers

superstores

giant retail outlets that carry food and non-food products found in supermarkets, as well as most routinely-purchased consumer products

hypermarkets typically allocate 40-50% of their space to ___ products, and the remainder to ___

grocery (40-50%) general merchandise (remainder)

key to success in retailing

have a strong customer focus with a retailing strategy that provides the level of service, product quality, and innovation that consumers desire

speciality stores may have ___ in proportion to sales, and satisfying customers may require ___

high cost in proportion to sales may require carrying products that have low turnover rates

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

to attract customers, a retail store must project an ___ that appeals to its target market

image - a functional and psychological picture in the customers mind

factory outlet malls are often placed ___

in noncompetitive locations, often outside metropolitan areas

Lowes is testing ___

in-store robots that will take you to what you need

manufacturers' agents

independent intermediaries that represent two or more sellers and usually offer customers complete product lines

merchant wholesalers

independently owned businesses that take title to goods, assume ownership risks, and buy and resell products to other wholesalers, business customers, or retailers

brokers

intermediaries that bring buyers and sellers together temporarily

selling agents

intermediaries that market a whole product line or a manufacturer's entire output

agents

intermediaries that represent either buyers or sellers on a permanent basis

department stores

large retail organizations with atleast 25 employees that are characterized by wide product mixes

supermarkets

large, self-service stores that carry a complete line of food products and some non-food products such as cosmetics and nonprescription drugs

warehouse clubs

large-scale, members-only establishments that combine features of cash-and-carry wholesaling with discount retailing (buying clubs)

mail-order wholesalers

limited service wholesalers that sell products through catalogs

drop shippers (desk jobbers)

limited service wholesalers that take title to goods and negotiate sales but never actually take possession of products (forward orders from retailers, business buyers, or other wholesalers to manufacturers and arrange for carload shipments of items to be delivered directly from producers to these customers)

truck wholesalers (truck jobbers)

limited service wholesalers that transport products directly to customers for inspection and selection

cash-and-carry wholesalers

limited service wholesalers whose customers pay cash and furnish transportation (limited line of products w a high turnover rate)

off-price retailers offer lines of ___

lines of national brand and designer merchandise, usually clothing, shoes, or housewares

___ is the least flexible variable of the marketing mix

location

discounters accept lower ___ than conventional retailers in exchange for high ___

lower profit margins high sales volume

examples of category killers (6)

lowes and home depot staples barnes & noble petco and petsmart best buy toys r us

retailer apps can foster ___ (3)

loyalty, repeat purchases, and the customer experience

online retailing

makes products available to buyers through computer connections

retailers can enhance customers' perceptions of the value of products by ___

making buyers shopping experiences easier or more convenient

wholesalers might also establish information systems that help producers and retailers ___

manage the supply chain from producer to consumer

sales branches

manufacturer owned intermediaries that sell products and provide support services to the manufacturer's sales force

sales offices

manufacturer owned operations that provide services normally associated with agents; owned by the producer

An independent businessperson who is paid a commission to sell complementary products of different producers in an assigned territory without actually taking title of the merchandise is a(n)

manufacturer's agent

a group of organizations and individuals that directs the flow of products from producers to the ultimate consumers is called a ___

marketing channel

in warehouse clubs, customers must perform some ___ by themselves

marketing functions (like transportation of purchases)

what links producers to consumers through the purchase and reselling of products or contractual agreements?

marketing intermediaries

direct selling

marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace

3 types of wholesalers

merchant wholesalers agents and brokers manufacturers' sales branches and offices

limited-service wholesalers

merchant wholesalers that provide some services and specialize in few functions (specialty items, perishable items, construction materials, and coal)

overall costs of direct selling make it the ___

most expensive form of retailing

exterior atmospheric elements are particularly important to ___

new customers, who tend to base their judgment of an unfamiliar store on its outside appearance

many hypermarkets also lease space to ___

non-competiting businesses (banks, optical shops, fast-food restaurants)

amazon started their own line of ___

over-the-counter drugs, basic care

neighborhood shopping centers consider their target market to be ___

people who live within 2-3 miles, or 10 min driving time

full-service wholesalers

perform the widest range of wholesaling functions

telemarketing

performance of marketing-related activities by telephone

Intel made "Vaunt" which has ___

phone on glasses that gives you notifications, things show up by asking them to

wholesalers have bear the primary responsibility for the ___

physical distribution of products from manufacturers to retailers

power shopping centers may be anchored by ___

popular stores

which of the following generally does NOT have a conventional department store anchor?

power shopping center

retailers add value to the customers by ___

providing services and assisting in making product selections

beacons

real-time messages and offers sent to customers with Bluetooth-enabled smartphones

franchisor may receive ___ in exchange for ___

receive a percentage of total sales in exchange for furnishing equipment, buildings, management know-how, and marketing assistance to the franchise

warehouse showrooms

retail facilities in large, low-cost buildings with large on-premises inventories and minimal services (ikea)

category management

retail strategy of managing groups of similar, often substitutable, products produced by different manufacturers

private branding (label)

retailer themselves come up with products instead of going to gucci to purchase products to sell in-store (removes middle man, under your control)

extreme-value stores

retailers that are a fraction of the size of conventional discounted stores, and typically offer very low prices on smaller size name-brand nonperishable hosuehold items

discount stores

self-service, general-merchandise outlets that regularly offer brand-name and private-brand products at low prices (walmart, target)

producer is likely to rely on a merchant wholesalers when ___

selling directly to customers would be economically unfeasible

non store retailing

selling of products outside the confines of a retail facility

services provided by wholesalers (4)

serve as an extension of a producer's sales force provide financial assistance assist with marketing strategy especially the distribution component select inventory

convenience store

small self-service store that is open long hours and carries a narrow assortment of products, usually convenience products

community shopping centers draw consumers looking for ___

speciality products that are not available in neighborhood shopping centers

facing increase competition from department stores and other discount stores, some discounters improved ___ (3), and some even ___

store services, atmosphere, and location some even raised prices, blurring the distinction between discount store and department store

off-price retailers

stores that buy manufacturers' seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts (tj maxx)

traditional speciality retailers

stores that carry a narrow product mix with deep product lines (limited-line retailers, or single-line retailers if they carry unusual depth in one product category)

examples of traditional speciality retailers

sunglass hut, gap, limited, foot locker

franchisee supplies ___, operates ___, and agrees to ___

supplies labor and capital, operates the franchise business, and agrees to abide by the provisions of the franchise agreement

___ has allowed retailers to take over some wholesaling functions

technology

exterior atmospheric elements include ___ (4)

the appearance of the storefront display windows store entrances degree of traffic congestion

the most successful multichannel retail strategies integrate ___ (4) seamlessly across all platforms

the firm's goals, products, systems, and technologies

atmospherics

the physical elements in a store design that appeal to customers' emotions and encourage buying

L'Occatine has ___

touch screen of all products, then select what you want to try and employee will bring them to you

Phydeaux & Friends is an independent retailer that carries deep product lines of pet supplies. This small, locally owned store is best classified as a(n) ___

traditional speciality retailer

speciality retailers (3)

traditional speciality retailers category killers off-price retailers

wholesaling

transactions in which products are brought in for resale, for making other products, or for general business operations (does NOT include transactions with ultimate consumers)

examples of direct-response marketing (3)

tv ad ad in newspaper / magazine sending letters, samples, brochures, booklets to prospects

direct-response marketing

type of marketing in which a retailer advertises a product and makes it available through mail or telephone orders

power shopping center

type of shopping center that combines off-price stores with category killers

lifestyle shopping center

type of shopping center that is typically open air and features upscale speciality, dining, and entertainment stores (market street)

community shopping centers

type of shopping center with one or two department stores, some speciality stores, and convenience stores

regional shopping centers

type of shopping center with the largest department stores, widest product mixes, and deepest product lines of all shopping centers (shopping mall)

super regional shopping centers

type of shopping center with the widest and deepest product mixes that attracts customers from many miles away (mall of america)

neighborhood shopping centers

typical shopping center typically consisting of several small convenience and speciality stores (strip center)

automatic vending

use of machines to dispense products

direct marketing

use of the telephone, internet, and nonpersonal media to introduce products to customers, who can then purchase them via mail, telephone, or the internet

what's next for how we shop?

virtual reality

Oak has ___

walk in fitting room w digital mirror to adjust lighting, give reviews, ask to try on other things. also indirectly gives data to companies to tell them what you really think of products