Marketing Exam 4
Retail Classifications
- Level of Service -ownership and organization -Breadth and Depth of Merchandise Assortment -Merchandise Pricing
types of retailers
-Discount stores -Supermarkets -Warehouse Clubs -Convenience Stores -Drugstores -Specialty Stores -Off-Price Retailers -Department Stores -Leased Departments -Extreme Value Retailers - Factory Outlets -Service Retailers
types of sales positions
-New business salespeople -order takers -consultative sellers -Missionary salespeople -key account sellers -sales management and support
Key points of an effective sales presentation
-Sales force size -Generalists vs Specialists -Territory Design -Span of control
types of closing approaches
-Summary close -Alternative close -Assumptive close
3 factors that differentiate retail marketing from other businesses
-The average dollar amount of a single sales transaction. -Impulse purchasing. -Physical stores.
retailer
-any organization that sells directly to end-user consumers. -The practice of retailing encompasses all of the business activities involved in the sales of goods and services to the ultimate consumer for their personal, family, or household use. The scope of retail includes the sale of items ranging from luxury automobiles to apparel to the movie tickets and popcorn you bought at the theater last weekend.
Factors that influence use of Personal Selling
-if the purchase is a new task for customer -if the product is not purchased frequently -if the product is highly complex or technical -if the purchase is considered "risky" -if the product can be customized -if the product is higher priced or involving
Retailer Location Types
-isolated store -unplanned business district -planned shopping center
Steps in personal selling process
-prospecting and qualifying -Pre-Approach -Approach -Presentation -Handling objections -Gaining commitment -Follow-up
Presentation
After the approach, the salesperson prepares the sales presentation. Ideally, the sales presentation will do the following: Accurately convey the product's major features. Describe its advantages in comparison with alternatives. Detail how it will provide benefits for the potential customer.
which social media presence is seen as a must?
Retailing And U.S. GDP
Given the close link between consumer spending and economic growth, retailing is an economically important activity. Retail affects nearly everyone, either directly or indirectly. Retailers generate more than $4.6 trillion in annual sales in the United States, about two-thirds of the total U.S. gross domestic product. In 2015, about one out of every eight American workers, 15 million in total, were employed in the retail sector. According to the latest U.S. Census Bureau statistics, there were approximately 649,000 retail organizations in 2012, operating roughly 1.065 million separate retail establishments. Figure 11.2 shows annual retail spending by product category.
Assumptive close
In the assumptive close, the salesperson acts as if the buyer has already decided to purchase. The salesperson asks something like, "What date would you like the product delivered?" If the customer responds with a specific date, the salesperson knows the customer has decided to make the purchase.
Handling Objections
Objections are the concerns or reasons customers offer for not buying a product. Objections actually are useful: When a customer raises an objection, the salesperson has an opportunity to clarify and reassure the customer about pricing, features, and other potential issues. Handling objections requires professionalism, strong communication skills, and a sincere respect for the prospect's concerns. Common techniques of overcoming objections include: Acknowledging the objection: "Yes, our prices are higher because our product is better." The objection allows the salesperson an additional opportunity to stress the benefits of the product. For example, consumers are willing to pay Page 401higher prices provided they've been given a clear reason (higher quality, better safety, more efficient) for spending more. Postponing: "We'll discuss the delivery option in a few minutes, but first let me ask about your needs in this area...." Salespeople should postpone addressing objections if the full context of an appropriate answer has not been developed. This strategy works best if the salesperson plans to address an objection shortly. Postponing for too long will frustrate customers and reduce their level of trust. Denial: "That is not accurate. Here's what is the situation actually is...." If a customer mentions something that is completely false, the salesperson should strongly deny the point, but only in a way that is not offensive or insulting to the customer.
Summary close
The summary close works by repeating what has already been agreed to in the course of the presentation, typically via earlier trial closes. "Let's summarize: In addition to getting the basic service, you will be receiving free installation, our 30-day free return policy, and a full 2-year manufacturer's warranty. How does that sound?" In this type of close, the salesperson summarizes key benefits and how they meet the customer's stated needs before asking for the sale.
Most retail stores are what kind of store?
Supermarkets
Alternative close
The alternative close works by offering more than one clearly defined alternative to the customer. "Would you prefer the red model or the yellow one?" This technique works well in many different situations when you are seeking agreement, not just selling products.
personal selling
consists of the two-way flow of communication between a buyer and a seller that is paid for by the seller and seeks to influence the buyer's purchase decision. The salesperson and customer share information and feedback, often face-to-face. The interpersonal aspect of personal selling helps companies create and maintain strong customer relationships. In contrast to tools such as advertising and sales promotion, personal selling is often a much more effective tool in complex purchase situations.
Lifetime Value
focuses on the net present value of a customer's business over the span of their relationship with an organization. The emphasis is on keeping customers for long periods. To do that, firms focus on customer relationships.
Gaining Commitment
occurs at the point when the salesperson asks the prospect for agreement to move forward with the sales process, ultimately leading to a purchase. This is often the most difficult part of the personal selling process; it requires the salesperson to overcome the basic human fear of being rejected. Nonetheless, it is an essential step, because most customers will not take initiative to close the sale on their own. The act of asking for a customer's business is very important to securing it. In order to reduce the uncertainty and tension associated with a final close, many sales training programs emphasize the use of trial closes. In this approach, sales reps ask questions throughout the sales presentation that test the buyer's readiness to commit.
Reilly's Law of Retail Gravitation
one of the oldest and most commonly used trading area models. It describes in simple terms how consumers decide where to buy the goods and services they consume. The model calculates a "break point" in retail trade between two communities as: where Ba, Bb = Population sizes of cities a and b (b is the smaller community) Db = Break point distance of trade to center b D = Distance between centers a and b
Wheel of retailing
probably the best-known framework for explaining changes in retail institutions. This classic framework suggests that new types of retailers typically enter the market as low-margin, low-priced, low-prestige merchants. Following this entry phase, they enter a trading-up phase; in that phase, they provide new services and improve their facilities. As the business succeeds, competition leads them to add even more services and improvements, further increasing costs. At this point, these stores, which now have high costs, are vulnerable to competition from new, low-cost, no-frills retail entries.
Breadth of assortment
refers to the number of distinct goods or service product lines that a retailer carries.
Depth of assortment
refers to the number of individual items offered within any single product line.
Primary roles of sales manager
sales managers have oversight of selling efforts at varying levels of the organizational hierarchy: They establish sales objectives, and forecast and develop annual sales quotas for their assigned territories. They work with human resources personnel to recruit, select, train, supervise, and evaluate sales employees. They often work directly in the field with their assigned reps. They serve as a conduit for information received from the front lines to senior management about ongoing market trends and competitive actions.
zero moment of truth (ZMOT)
the moment when a customer uses a digital device to begin learning about a potential purchase. In Lecinksi's own words, it is "that moment when you grab your laptop, mobile phone, or some other wired device and start learning about a product or service (or potential boyfriend) you're thinking about trying or buying."27 He argues that while there is no denying the importance of the first and second moments of truth, consumers' newfound abilities to search for virtually anything at any time has created new moments of decision before the consumer even gets to the store display case
pre-approach
the salesperson does research and preparation before contacting the customer. He or she should identify key decision makers, review account histories, ascertain customer needs, and prepare sales presentations. Quality pre-approach research focuses on the environmental forces at work in the customer's life or in the organization's industry. Well-trained sales representatives do their homework before making their first contact. The entire personal selling process can result in failure if the salesperson doesn't know as much as possible about the prospect before approaching them about the sale.
integrating social media into loyalty programs
Brands are also beginning to recognize the significant role social media can play in growing their loyalty programs. Loyalty programs that are integrated with social channels or mobile apps provide a tremendous mechanism for driving participation. Such integration improves loyalty-program customer experience and helps track the sales impact of loyalty-program participation and brand advocacy. Social media increases loyalty participation by adding the exponential power of human connections. With just the push of a button, members can share with their network of friends and family members information about the benefits of their participation. In addition, social media-based loyalty programs create an easy and visible mechanism for identifying and rewarding social brand advocacy. Recognizing customers for their social activity goes a long way. A simple thank you coupled with points or other reward/benefit makes participants feel special. Loyalty program expert Jessica Williams offers a few tips:40 Give your customers a specific hashtag and CTA so you can easily monitor and reward mentions. Hashtags also make it easy to analyze which channels and promotions work best. Assign a social currency or value to the social actions your consumers take. These actions could include mentions of your brand when they're talking directly to you or to their audience, or recommending something to a friend. Be prepared to surprise and delight someone for his or her actions as they happen. Over time, these activities enable the brand to increase loyalty-program engagement and acquire new brand loyalists organically.
Impulse Purchase
Buying something that you were not originally planning to get
Social Media Marketing Dashboards and ROI
In order to improve social media marketing performance, digital marketers typically track selected metrics on a daily, ongoing basis through some form of social media marketing dashboard. The dashboard provides data visualizations that illustrate performance over time across a range of measures. Dashboards are a convenient way to keep track of performance, but it is important that marketers consider why they are collecting the data to begin with: to improve decision making and marketing performance. Before selecting which metrics to track, it is important for marketers to consider how those metrics are tied to business objectives that the organization cares about. Whatever the social media metrics an organization tracks, demonstrating a positive ROI for the brand or organization on its social media investment will always be the ultimate criteria. By tracking key metrics through a dashboard, marketers can more readily answer questions relating to the comparative effectiveness of social media channels and which channels produce the greatest number of leads and sales.
Stages of distribution channel
Retailers are the last stage of the distribution channel Retailers create overall efficiencies for their suppliers and value for the end-consumer by performing several key channel functions: Breaking bulk and providing assortment: In the pursuit of efficiency, manufacturers often produce large quantities at a time. All things being equal, it is more profitable for them to sell large quantities to as few buyers as possible. On the other hand, consumers usually buy only a few or even just one product at a time. Also, to save time and money, consumers typically wish to purchase a variety of goods during any given shopping trip. Retailers make the overall marketing channel work more efficiently by buying large quantities of goods from a variety of suppliers and distributing them to store locations that are conveniently located for the end-consumers. Communication: Retailers communicate with consumers as well as with manufacturers and wholesalers. Shoppers learn about availability of goods and services, their features and benefits, store hours, special sales and promotion, and so forth from retailer ads, salespeople, store circulars, and displays. Because they are closer to customers and end-users, retailers can provide manufacturers and wholesaler partners with a wealth of useful and timely information on customer preferences. This can include consumer likes and dislikes, sales forecasts, inventory status, and product defects. Manufacturers can then modify their goods and services to correct problems and better meet the needs of local consumers. Facilitating functions: Retailers provide a collection of services—termed facilitating functions—that ease and enhance the selling and buying of goods. For instance, they offer credit to customers and accept returned merchandise. Page 350Depending on the product, retailers may also deliver, install, and service the products they sell. In some cases, they may even add value to products before distributing them to customers, such as by adding after-market parts or by bundling the product with other goods and services. Completing transactions: Finally, retailers complete transactions with end-consumers. They offer convenient locations, fill orders promptly and accurately, and process payments.
Follow Up
Salespeople must not overlook the huge potential for revenue and profits of existing customers. Most businesses today depend on repeat sales of products and add-on services to existing clients. Also, as noted earlier, it's much more expensive to acquire a new customer than to keep an existing one. Thus, it is essential for the salesperson to do everything possible to retain existing customers as long as possible. The follow-up stage is a critical step in creating customer satisfaction and building long-term relationships with customers. A sound follow-up strategy includes, at a minimum, checking in after the sale to ensure that the customer is satisfied. The customer should feel that he or she is actually receiving the sought-after benefits of the product. If the customer experienced any problems, the salesperson can intervene and become a customer advocate to ensure satisfaction.
isolated store
a freestanding retail outlet located on either a highway or major road. There are no adjacent retailers with which a freestanding store shares traffic.
planned shopping center
a group of architecturally unique business establishments on a site that is centrally owned or managed. These sites are designed and operated as a unit, with tenants selected to limit direct competition. Dedicated parking is another typical feature. Examples include large regional shopping malls and neighborhood strip malls. More recently, lifestyle shopping centers have gained in popularity. These retail centers usually feature upscale retail operations as well as fine dining and entertainment options and are often located within affluent neighborhoods.
search marketing
a marketing practice whose goal is to generate traffic from search engines through both paid and unpaid efforts.
brand ambassador
a person, especially a celebrity, who is paid to endorse or promote a particular company's products or services.
search engine
a software system designed to search for information on the World Wide Web.
unplanned business district
a type of retail location where two or more stores are situated together or in close proximity. In this location, the overall mix of stores is not the result of prior long-range planning. For instance, a downtown business district may consist of a department store, a gastropub, a women's fashion boutique, and a pharmacy.
cluetrain manifesto
a work of business literature collaboratively authored by Rick Levine, Christopher Locke, Doc Searls, and David Weinberger. It was first posted to the web in 1999 as a set of ninety-five theses, and was published as a book in 2000 with the theses extended by seven essays. The work examines the impact of the Internet on marketing, claiming that conventional marketing techniques are rendered obsolete by the online "conversations" that consumers have and that companies need to join.
Call to Action (CTA) conversion
an image or line of text that prompts visitors, leads, and customers to perform a desired action. It is quite literally a "call" to take an "action." Conversion expert Chelsea Baldwin offers several ideas for improving CTA conversion rates:38 Replace generic wording. "Submit" is standard wording in a lot of CTA form-creation software. Because it's so common, it's a word to omit from your online business vocabulary. Nobody cares about the action of submitting. The same holds for "Purchase," "Download," and "Sign Up." What customers care about most is what they are getting in return. The headline for your CTA should reflect this fact. Add visual cues. For humans, faces are among the most important visual stimuli. As a species, we are constantly monitoring each other's faces. We pay close attention to subtle details that can give some insight into the emotional state, engagement level, or the object of attention of others.39 Even with images on a website, when we find a face and the person is looking in a certain direction, our eyes tend to follow that direction, to see what the person is looking at. By locating a call-to-action button in that direction, marketers can improve conversion. Write CTA headlines in first person. Most copywriting uses second person ("you") to facilitate conversation. But when people read website copy, their thoughts are typically about their own benefits: "help me," "my time," "my money," and "I want" or "I need." Instead of using button text that says "Get your free eBook," write button text that says "Send me my free eBook." Changing the wording of the CTA to first person eliminates the "brain friction" in which the prospect's mind has to translate second person into his or her own first-person thoughts.
customer-oriented selling
can be viewed as the adoption of the marketing concept at the level of the individual salesperson and customer. Highly customer-oriented salespeople do the following: Engage in behaviors likely to lead to long-term customer satisfaction. Avoid actions that sacrifice customer interest for the sake of short-term benefit to the salesperson or his or her company. See things from the buyer's perspective. Recognize the social landscape under which large, complex sales are typically made. Understand that the impact on a customer of a bad buying decision is usually greater than the impact on a salesperson of a lost deal.
Approach
he sales rep meets the customer for the first time. A key element of the approach is gaining a sufficient level of customer interest in order to schedule an appointment. Setting the first appointment is arguably the most important, and most difficult, step in the sales process. In effect, it involves engaging the attention of a busy decision maker long enough to obtain a commitment that he or she will give you—who are in most instances, a complete stranger—his or her undivided attention for a specified period of time. For many years, salespeople were advised to always be ready with their "elevator pitch." The idea was that if you found yourself in an elevator with a key decision maker, you would be able to explain who you are and what your business has to offer between the time the elevator doors closed shut and opened back up again. The ability to succinctly summarize your company's value proposition remains a worthwhile goal. In today's business world, though, we have far more opportunities to get our message to decision makers than simply through a chance elevator ride. Decision makers today are faced with a flood of information. The McKinsey Global Institute estimates the typical American hears or reads more than 100,000 words every day—e-mails, texts, tweets, meetings, webcasts, commercials, blog posts, videos, and more.14 Cutting through the clutter to get through to message receivers presents a great challenge to salespeople and marketers. Experts offer several tips on increasing effectiveness in appointment setting: Carefully plan your approach to ensure that you present a strong value proposition that speaks to a valid buyer need. This is important whether you are reaching out to the prospect for the first time by phone, e-mail, or in person. Whenever possible, use the name of a trusted resource and reference them in the introductory e-mail or phone call. Or even better, get the referral partner to reach out and let the prospect know that the salesperson will be making contact. Most important, be persistent, patient, and professional. If the first few attempts are unanswered, continue to politely follow up with relevant information and ideas. The follow-up should help establish credibility and position the rep as a useful resource. If e-mails and voicemails are not working, try sending a handwritten note or connecting via a social network, such as LinkedIn. Once the salesperson has succeeded in obtaining a meeting, the next goal is to build rapport—a friendly relationship—with the decision maker or key influencers
qualifying prospects
involves identifying potential customers within the firm's target market who have a desire for the product, the authority to purchase it, and the resources to pay for it. Salespeople qualify prospects using a number of techniques. The most obvious approach is simply talking with the target customer. Qualifying also involves doing market research to better understand the target customer's needs, wants, and ability to pay.
prospecting
involves the search for potential customers—those who need or want a product and fit into a firm's target market. Potential customers can be found in a variety of ways: customer referrals, trade shows, industry directories, websites, and networking. Main goal is to find qualified prospects