Retail Exam 4

advantages of penetration pricing

Faster growth Broad market potential Combat competitors

example of how current and potential customers affect the retail price strategy

Fitbit and apple watches, Fitbit took a hit when apple fixed the apple watch issues; Very impactful in apples pricing strategy

advantages of price skimming

It can create an aura of prestige around your product Late adopters might be pleased to get your prestigious product at a bargain price

example of how does the government affect the retail price strategy

Laws that are being passed that affect minimum wage, impacts overall labor costs; Rules and regulations

what kinds of firms will use at-the-market pricing

They aren't focused on all the other smaller places, they are just focused on that one big competitor

example of how manufacturers, wholesalers, etc. affect the retail price strategy

Toblerone, had to change the shape and people didn't like it so they went back

example of price skimming

apple releases new products for more

Average prices or market based pricing; Firms use the average industry price as a benchmark for their pricing decisions

at-the-market pricing

example of upscale pricing

canada goose

focuses on stimulating demand for specific brand/retailer; Traditional ads; Very brand specific

competitive advertising

gathering information is the first step to implementing the merchandise plan and ____ are first

consumers

4 factors affecting retail pricing strategy

consumers, government, manufacturers/wholesalers/other suppliers, current and potential customers

A major advantage of advertising is that ___

costs per viewer, reader, or listener are low

retailers carry complementary goods and services to encourage shoppers to buy more

cross merchandising

A retailer specifically attempts to increase its average sale through carrying complementary goods and services in ___.

cross-merchandising

Friendly atmosphere Shoppers do not feel rushed People are encouraged to walk through in any direction Impulse or unplanned purchases are increased

curve/free flowing traffic pattern

A retailer can most effectively track consumer purchases through ___

customer loyalty program

A major advantage to a straight (gridiron) traffic flow is that ___

customers can shop quickly

example of curved traffic pattern

department stores

Whereas image refers to how a retailer is perceived by customers, positioning refers to a retailer's image with regard to its ___

direct competitors

low prices as a competitive advantage

discount pricing

the 4 different pricing options

discount, at-market, upscale, transparency

pricing items at a level determined by a particular customer's perceived ability/willingness to pay; Pricing individually based on demand at the time

dynamic pricing

small percentage changes in price lead to substantial percentage changes in the number of units bought, small change will results in similar change in amount purchased, when price goes up you don't buy as much; price sensitive

elastic

4 elements of atmosphere

exterior planning, general interior, store layout, interior displays

Examples of pioneer advertising

got milk, wants you to drink more milk, not a specific milk

A major advantage of publicity is ___

high believability

example of publicity

ihop becoming ihob when they announced burgers

example of public relations

ikea letting someone sleep overnight, partner with airbnb

example of at-the-market pricing

lowes and home depot

advertising created to increase awareness (and ultimately purchase) of a brand or product More concerned with developing favorable attitudes

manufacturer advertising

In which product life-cycle stage do product sales reach their maximum?

maturity

example of inelastic pricing productd

medicine, gas, food

occurs when a company launches a low-priced product with the goal of securing market share

penetration pricing

oral communication with one or more prospective customers for the purpose of making a sale; Direct communication; have to find ways to invest more directly with the customer when communicating the value or benefits so it can be changed to fit that customer, more catered customer service

personal selling

not solely focused on product or brand, focused on category; Has awareness as a goal; Used for new products or customer education; Used for a product category instead of a specific brand

pioneer advertising

the sensitivity of customers to price changes in terms of the quantities they will buy

price elasticity of demand

a strategy focused on maximizing profits by charging a high price for early adopters

price skimming

A retailer seeks store loyalty, as well as greater channel control. Which branding philosophy should the retailer use?

private branding

Advertising, public relations, personal selling, and sales promotion are the four elements of ___

promotion

communication that fosters a favorable image for the retailer, essentially reputation management

public relations

nonpersonal form of communication transmitted by mass media; The media is not paid for, and there is no identified commercial sponsor; Outside control of the firm

publicity

example of cross merchandising

putting all the smores ingredients on a display together

Which of the following is NOT a merchandise source?

resident buying office

advertising aimed at driving business towards a retailer Has more concentrated target market (like nicks toggery), except examples like walmart Cannot utilize national media as readily as manufacturers

retail advertising

what affects the image of store

retail employees, other customers, other customers, merchandise, pricing, location

the way a firm is perceived by customers, the perception people have when they hear the name of the store

retail image

Any communication by a retailer that informs, persuades, and/or reminds the target market is ___.

retail promotion

When the price elasticity of demand is elastic and price goes up, ___.

revenues decline

example of retail advertising

sephora ad includes urban decay

the physical, tangible characteristics that project an image and draw consumers

store retailer

what does perfect inelasticity look like on a graph

straight up and down, like an I

An efficient atmosphere is created, very intentional coaching/training customers how to navigate the store Can shop quickly, more self service, reducing labor costs More floor space is devoted to displays

straight/gridiron traffic pattern

example of straight/gridiron traffic pattern

supermarkets

example of micromerchandising

target and publix sell location specific team clothes

A major disadvantage of advertising is that ___

the message is standardized and inflexible

atmosphere

the store _____ that includes the physical characteristics of a retail store used to help create the retail image

A major disadvantage of publicity is that ___

there is no control over message, timing, placement, and coverage

a pricing strategy that involves making consumers aware of the cost breakdown of products

transparency pricing

example of dynamic/surge pricing

uber, disney

using the higher or highest price as strategy

upscale pricing

example of manufacturer advertising

urban decay ad

example of merchandising philosophy

urban outfitters, free people, and anthropology

example of discount pricing

walmart trying to be amazon

cross merchandising requires you to know

what your customer is purchasing

example of competitve advertising

Aldi shows products and highlight low prices

advantages of public relations

Image can be presented or enhanced More credible source No cost's for messages time or space Mass audience addressed People pay more attention than to clearly identified ads

key aspects of public relations

Nonpersonal or personal Paid or unpaid Sponsor-controlled or not Storytelling

what are the 4 P's of the merchandising mix

Product Price Place Promotion

advantages of advertising

Reaches a large audience Low cost per contact Many alternatives available Control over message content, messages can be standardized

disadvantages of advertising

Standardized messages lack flexibility Some media require large investments Geographic flexibility limited Some media have a high throwaway rate Some media limit the ability to provide detailed information

paid, nonpersonal communication transmitted through out-of-store mass media by an identified sponsor

advertising

example of elastic pricing products

airfare

what are the advantages of upscale pricing

increased revenue, differentiates brand as luxury

A market skimming strategy should be used when consumer price elasticity of demand is ___.

inelastic

large percentage changes in price lead to small percentage changes in the number of units bought; not price sensitive

inelastic

A major advantage of a merchandising philosophy is the ___

integrated buying and selling effort

the process retailers use to offer the right kind of product, at the rights place, and at the right price; End goal is to maximize sales while also ensuring you minimize markdowns; If you shop for a living, this helps to make financially right decisions for the company; Maximize sales and sell out inventory

merchandise planning

the act of acquiring goods and making them available at the places, times, prices, and quantities that enable a retailer to reach its goals

merchandising

sets the guiding principles for all the merchandise decisions made by the retailer Should match the company, not the person buying the merchandise

merchandising philosophy

In which strategy does a retailer adjust its self-space allocations to respond to customer and other differences among local markets?

micromerchandising

retailers adjust shelf space allocations to respond to customer differences and other differences among local markets

micromerchandising

example of how consumers affect the retail price strategy

misfits produce sells ugly produce for cheaper, what are consumers willing to pay

it takes an online visitor less than two-tenths of a second to form an opinion on a brand once they access the companies website

non-store retailer

example of personal selling

nordstrom

5 factors affecting elasticity

number of substitutes, cost of switching, degree of necessity, proportion of income, peak and off-peak demand