MKTG reading CH 15
Location of Retail Stores: neighborhood shopping center
"strip malls" that usually consist of several small convenience stores and specialty stores like gas stations, and fast food -target market is ppl within 10 mins drivetime -usually sell essentials and product lines are not very deep
Location of Retail Stores: Community shopping centers
-1 or 2 department stores, some specialty and some convenience stores -usually sell a lot more variety of products and their market is ppl who cant find what they are looking in neighborhood shopping centers. PPL ARE WILLING TO DRIVE FURTHER FOR THESE
direct marketing
-NON STORE RETAILING -use of media to communicate product info to consumers who can then purchase products via mail phone or internet -very significant amount of sales are made through direct sales
Retail Technologies
-a lot of consumers especially younger ppl expect to a seamless shopping experience across all platforms and stores like nordstrom are putting money into perfecting this - a lot more companies are trying to design apps that make the shopping experience easier for ppl
Store Image: atmospherics//interior
-aethetic considerations like lighting, wall and floor coverings, dressing rooms and fixtures -can seperate yourself from competition especially if you sell a very simmilar product e.x. a bar will conbtrol music tempo, voulume, lighting and cleanliness to seperate itself from other bars which sell a very similar product
Franchising:
-allowing a franchisee to sell products and the franchisor gets a percentage of total sales ( the franchisor helps finance the equipment and training needed ) -franchisee provides labor, capital, and operates the business e.x. pizza hut // KFC // McDonalds
Direct Selling: advantages/dis.
-allows marketer to demonstrate product in a comfortable environment where the customer will most likely use it -seller can give customer personal attention -convenient time/location dis. -bc of comission and effort, overall costs are most expensive for this form of retailing -some ppl view is negatively bc of past fraudulent acts by some seller
direct marketing: catalog marketing
-an organization provides a catalog where customerscan pick items and place order by mail phone or internet -some specialize in depth for a few lines and some specialize in single product lines (seeds/auto-parts) -good bc customers dont have to cisit a store and retailers can target remote, low-cost areas and save on expensive store fixtures
Retailing
-buyer is ultimate customer who intends to use a product for personal or family use RETAILER = an org that purchases products and resells them to customers -retailers are extremely important to US economy and money spent on them gets pumped to employees and the economy
Retailing: adding value
-by assisting in making product selections and providing services -allow convenience in easy delivery or mobile shopping -helps ppl be able to compare similar products easier (furniture stores and care dealerships are usually located near eachother and online shopping does this) -value enhanced when retailers offer extra things like delivery, credit and repair -teach customers how the product can solve their problems
wholesaling: full-service wholesaler: limited-line wholesaler
-carry a few prouduct lines but offer extensive depth e.x. groceries, oil-well drilling equipment
Location of Retail Stores: power shopping center
-combine off-price with category killers in a center e.x. gap, t.j. maxx, PetSmart
Brick-and-Mortar Retailers: General-Merchandise Retailers: Hypermarkets
-combine superstores and discount stores, have 225-325,000 square feet and have tons of low-priced products -allow fastfood and other noncompeting businesses to lease space in store -these usually fail in the US because they are too large to maintain
Store Image: atmospherics: colors/sounds/smells/online
-different colors have been proven to evoke certain emotions in people e.x. red and yellow have been shown to make ppl hungrier and eat fast so fast food used this to increase turnover e.x. a low-end family restaurant may play fast pop music to encourage ppl to eat fast and get out, high-end usually is slower classical music to encourage multiple courses -companies pump out smells that are associated with their product... (panera = fresh bread smell etc...) -online stores still gave to deal with atmospherics. things like site layout and content of digital ads can affect consumers mood and buying behavior
Brick-and-Mortar Retailers: General-Merchandise Retailers: Discount Stores: Extreme-value stores
-discount stores prices have been rising so thrifty ppl have been moving to these stores -things like 99c stores and dollar tree -charge more per ounce but cheaper for ppl who cant afford to buy bulk
wholesaling: merchant wholesalers
-independent own businesses that take title to goods, assume risk associated with ownership, and buy and resell products to other sellers -producer rely on them when selling directly to customers is not feasible
WHOLESALING
-initiate sales contacts with a producer and sell diverse products to retailers -wholesalers can provide financial assistance -using a wholesaler allows the company to spend more time developing and manufacturing products that match customers needs and wants
Brick-and-Mortar Retailers: General-Merchandise Retailers: warehouse showrooms
-large -low cost buildings -warehouse materials-handling technology -vertical merch display -large on-premise inventories -minimal services e.x. IKEA -high-volume-low-overhead offer very few services -customers usually have to transport, finance and assemble good themselves
Brick-and-Mortar Retailers: General-Merchandise Retailers: Department Stores (what are they/internal mgmt/what do they sell)
-large retail orgs (25+ employees) that have wide product mixes (nordstrom, macy's, khols) -for internal managment and marketing department stores group related product lines and let them act as their own self contained business (cosmetics/housewares/apperals) -sell tons of different things but cosmetics & apperal make up most of sales -rent space in their store to other companies that do things like auto insurance or hair care -a lot of them have apps now -very much a service oriented business and their total product includes credit, delivery, assistance, returns etc...
Brick-and-Mortar Retailers: General-Merchandise Retailers: Supermarkets
-large self-service stores that carry a complete line of food products and some non-food items like cosmetics -usually are arranged by department and provide services like check cashing and curb-side pickup -online retailers and other retailers are putting pressure on supermarkets to make shopping more convenient e.x. these stores have responded by providing more delivery of gorceries and convenient meal kits
Brick-and-Mortar Retailers: Specialty Retailers: category killer
-large specialty store that concentrates on a major product category and has low prices and high product availability -grow fast and take out smaller businesses that cant get their prices low enough e.x. home depot, staples, barnes & noble -like to advertise deep product lines, expertise and cheap prices -online sales are stealing sales from them
Brick-and-Mortar Retailers: General-Merchandise Retailers: warehouse clubs
-large, members-only operations that use cash-and-carry and wholesaling with discount retailing -carry a small amount of different products (discount store = 40k WC = 3.5-5k) -cut costs by not advertising that much and only offering a few services -customers have to do some marketing functions themselves, like moving goods to their car
Location of Retail Stores: Regional shopping centers
-largest and deepest product lines of all shopping centers (some malls are regional shopping centers) -must have very well-coordinated management and marketing activities bc such a large customer base -target is ppl traveling long distances bc they cant get these products in their hometown -tenants are usually large chains bc prices are high
Location of Retail Stores: superregional shopping centers
-largest shopping center and have customers come from many miles. Have special attractions like skating rinks, and upscale restaurants e.x. mall of america
wholesaling: agents and brokers: brokers
-main goal to bring buyers and sellers together, thus they perform fewer functions than other intermediaries -usually have no authority over prices and dont take on much risk
Online Retailing: (what is it/satisfy what/allows for what)
-makes products available through internet connections and is rapidly growing and vital e.x. AMAZON -these satisfy the growing expectation for customers to have many channels available to obtain goods and services at almost any time - a lot of stores are moving most of their products to an online catalog -allows more convenience for customers, maintains availability of slow moving goods and out-of-season items -ALSO some online retailers have opened brick&mortar stores in strategic location to gain more exposure and insight into customer behavior
wholesaling: manufacturers sales branches and offices: sales branches
-manufacturer-owned intermediaries that sell products and services to a manufacturers sales force -located where demand is high and provide many services (away from manufacturing plants)
wholesaling: manufacturers sales branches and offices: sales offices
-manufacturer-owned operations that provide services normally associated with agents -CARRY NO INVENTORY -help manufacturers reach their customers effectively by doing wholesaling themselves -or when wholesaling is not available -when a manufacturer does their own wholesailing they strenghten their supply chain efficiency
wholesaling: agents and brokers: selling agents
-market either all of a specified product line or a manufacturers entire output -dont take title to products -sometimes used to replace marketing department -not bound by territory
direct marketing: telemarketing
-marketing by phone -2003 congress implemented a do-not-call registry -FTC enforces violations on this list and can give companies large fines for calling these numbers
Direct Selling
-marketing of products to ultimate consumers through f2f presentations e.x. cutco goes door to sell their knives and gives them an ad about how good they are -not much door to door anymore, but ppl set up appointments with salesmen through phone, mail, or mall intercepts -very successful in places like China
wholesaling: agents and brokers: manufacturers' agents
-more than half of all agent wholesalers, represent 2 or more sellers and offer complete product lines -bound by a territory
Retailing: multichannel retailing
-moving towards this from traditional retailing -employing multiple distribution channels that complement brick-and-mortar stores with websites and apps where consumers can learn more about products -important for it to be seamless across all platforms (see it on app, locate nearest store, or order it online) -VERY IMPORTANT TO FOR CUSTOMER FOCUS WITH RETAIL STRATS e.x. dominoes easy to order pizza -growing middle classes in asia and brazil so many US companies are jumping at opportunity
Brick-and-Mortar Retailers: Specialty Retailers
-narrow deep assortments (DONT SELL SPECIALTY ITEMS) but deep assortments in few product lines
Brick-and-Mortar Retailers: Specialty Retailers: Traditional Specialty Retailers
-narrow product mix, deep product lines (jewelry , sports, fabrics) e.x. GAP, sunglass hut, footlocker -they are small so they usually have high cost in proportion to sales -must know what customers want so they can carry these products and reduce risk of unused inventory -OFFER MORE EXPERTISE AND BETTER SELECTIONS THAN DEPARTMENT STORES
wholesaling: agents and brokers
-negotiate purchases and expedite sales, but do not take title to products -take comission -perform even less than limited-wholesalers but have expertise in their respective areas -brokers help with a few sales, agents help the company long-term
wholesaling: full-service wholesaler: specialty-line wholesaler/rack jobbers
-offer narrowest range of products -usually one product line RACK JOBBERS = specialty-line wholesalers that own display racks in supermarkets. Retailers give them space to set up displays
Retail Technologies: Beacons
-one way to improve technology by sending real-time messages and offers to customers smartphones. -used in hotels, airports, stadiums e.x. citibank uses beacons in some branches to allow customers in after hours -target uses it to guide customers right through their product list
Direct Selling: groups
-people host parties and have ppl over to check out merchandise e.x. mary kay and tupperware
wholesaling: full-service wholesaler
-perform widest possible range of wholesaling functions -producers rely on them for product availability, suitable product assortments, financial assistance, technical advice and service -more operating costs than other wholesalers bc they perform more functions
Store Image: atmospherics//exterior
-physichal elements in a store's design that appeals to consumers emotions and encourages buying -influenced through things like music, color and complexity of layout -exterior atmospheric elemetns are important to new customers who usually base opinions on outside appearance of the store -if store looks bad, usually wont enter
direct marketing: television home shopping
-presents products to TV viewers encouraging them to call a toll-free number and buy e.x. QVC, home shopping network -ADV = products can be demonstrated easily, adequate time is allowed for explaining it -consumers can shop from the comfort of their home
wholesaling: limited-service wholesaler
-provide fewwer marketing services than full-service -take title to merchandise but do not deliver or provide other information -charge less and have smaller profit margins than full-service
Brick-and-Mortar Retailers: Specialty Retailers: off-price retailers (what are they/when are they good/compete for who/important/tension)
-purchase returns, overruns, and pre-season goods from appereal companies for below wholesale and offer them super cheap e.x. TJ maxx, marshals -usually good in recessions -have very high inventory turnover and compete for price conscious customers -important for these retailers to establish long-lasting relationships with suppliers to keep up supply -retailers can also offer to pay cash for goods during a producers off-season -department stores can have tension with manufacturers if they sell too much in-season goods to off-price retailers
wholesaling: agents and brokers: commission merchants
-recieve cosignment goods from local sellers and negotiate sales in large central markets -usually in ag marketing where they get truckloads of commodities and arrange them for transport to auctions -try to get best price possible
Brick-and-Mortar Retailers: General-Merchandise Retailers
-retail establishment where many product lines are stocked in considerate depth
Brick-and-Mortar Retailers: General-Merchandise Retailers: Superstores
-retail outlets that carry food, and also routinely purchased non-food products such as housewares, hardware and small appliances -combines discount stores and supermarkets and sells about 4x more products than supermarkets -also do dry cleaning,auto repair, check cashing etc e.x. walmart supercenters, some krogers -use sophisticated operating techniques to deal with demand
category management
-retail strategy of grouping similar products together -used to increase sales and customer satisfaction -important part of developing a collaborative supply chain -have to get data on customers and share it between retailer and manufacturers
direct marketing: direct-response marketing
-retailer advertises a product and makes it available through mail or phone orders e.x. TV commercial offering exercise machines through a toll free number, newspaper or mag ad for children's books -a multi-billion $ industry but internet is starting to take its customers away
Brick-and-Mortar Retailers: General-Merchandise Retailers: Discount Stores (what are they/who/popular when/now)
-self-service merchandise outlets that offer brand or private-brand products at low costs (lower margins but higher volume) -Walmart and target are both largest discount stores in country and some of the largest retailers in the worlds (walmart is worlds largest) -this type of retailing took off in 1950s when postwar production caught up with demand -department store competition forced them to increase prices and make their locations more attractive (this blurred line between department and discount) e.x. target is a discount store but has organic groceries and some high end lines used to appeal to younger wealthier target market
Brick-and-Mortar Retailers: General-Merchandise Retailers: Convenience Stores
-small self-service store that has long hours and sells a narrow assortment of goods (gas station stuff (drinks, cigs, snacks)) -started in Dallas with Southland Ice
Store Image
-stores must project an image that appeals to their target markets -using things like store enviroment, merch and service qualitty
wholesaling: limited-service wholesaler: mail-order wholesalers
-use catalogs to sell products -allows buyers to chose specific catalog items for delivery through various mail carriers -good for selling to remote areas other wholesalers may find too unprofitable to serve
Vending
-use of machines to dispense products (very impersonal) -used for small routinely purchased products -some high end places machines have a cult following and dispense things like cars, phones, snapchat spectacl
Location of Retail Stores: lifestyle shopping center
-used as a way to combat the internet taking over small sales -open-air center with upscale stores and dining and entertainment -try to be placed around affluent areas and foster customer loyalty by creating a sense of place
Location of Retail Stores
-using big data companies chose where to put their stores. extremely important bc location are not flexible and dictates geographic trading range
Location of Retail Stores: factory outlet mall (what are they/who owns them/ who do they draw in and how)
-usually carry upscale products from previous seasons that are discounted for quick sale -these stores are owned by manufacturers and they avoid conflict with traditional retailers of their product by building locations in non-competitive locations -draw in value-conscious shoppers in from a large radius -bring customers in through craft shows, contests and special events
Retail Positioning
-variety and expansion of offerings and tech by stores have lead to increased retailing competition -finding an underserved or unserved segment and reaching it through a way that distinguishes them from others in customers minds e.x. UNIQLO is positioned as a retailer of stylish, well-designed clothes for all people. This is in contrast to most other discount and specialty stores that appeal to time and cash strapped individuals -retail positioning allows for retailers to take market share away from large department stores
wholesaling: full-service wholesaler: general-merchandise wholesalers
-wide product mix but limited depth in product lines (drugs, nonperishable food, cosmetics)
Brick-and-Mortar Retailers
Webrooming = looking online and then going to purchase the product in store -some customers dont have a distinct line between the actual store and the app/website and use whichever they want depending on their circumstances
Vending: adv / disadv
adv= -take up a small space and no sales personnel, get info on what is selling well over internet dis = high maintainance and initial costs.
Franchising: advantages
advantages = -allows a franchisee to start a business with limited capital (usually are more succesful than ppl starting independent businesses bc they can build on an established brand) -franchisee gets free advertising from national ads by franchisor -franchisee can ask franchisor for advice for little cost -franchisor gains fast distribution of products and can use saved money on ads and expanding -franchisors can rely on their franchisee to follow their guidelines and be motivated to succeed
wholesaling: limited-service wholesaler: truck wholesalers
aka truck jobbers ... -transport limited line of products direct to customers for on-the-spot inspection and selection
Franchising: disadvantages
drawbacks = -franchisor dictates alot of things like decor and menu -franchisors give up certain control when allowing entrepeneurs to use their name and they may not run it to their standars -franchisees have to pay to use franchisors name and products (usually a one time fee then royalties) -franchisees must work 10-12 hours a day 7 days a week -some agreements arent uniform and youll pay more than others
Brick-and-Mortar Retailers: General-Merchandise Retailers: Supermarkets: Hard Discounters
offer a "no-frill" enviroment and have small assortment of goods so they can charge less e.x. Aldi
wholesaling: limited-service wholesaler: cash-and-carry wholesalers
wholesaler: cash-and-carry wholesalers -small intermediaries whose customers pay cash and furnish transportation -usually good for small businesses
wholesaling: limited-service wholesaler: drop shippers
wholesaler: drop shippers aka desk jobbers -take title to products, but never take actual possession -forward orders to manufacturers and arrange shipments