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Exam 2: Chapters 8, 9, 10, 11 and 12
Terms in this set (187)
- means the need-satisfying offering of a firm
- the idea of "product" as potential cutover satisfaction or benefits is very important, because customers think about a product in terms of the total satisfaction it provides.
- customer satisfaction may require a "total" product offering that is really a combination of excellent service, a physical good with the right features, useful instructions, a convenient package, a trustworthy warranty, and perhaps even a familiar name that has satisfied the consumer in the past.
- product quality should also be determined by how customers view the product.
- quality means a products ability to satisfy a customers needs or requirements
Elements of Product Planning for Goods and Services
- product idea
- product classes
- physical good
- quality level
- product line
- individual or family
- manufacturer or dealer
- enhancing the product
- none, limited, full, extended
- consumer product classes
- business product classes
is the set of all product lines and individual products that a firm sells
is a set of individual products that are closely related
is a particular product within a product line it is usually differentiated by brand, level of service offered, price, or some other characteristic. For example, each size and flavor of a brand of soap is an individual product.
Brand is a _____ decision
means the use of a name, term, symbol or design - or a combination of these - to identify a product. It includes the use of rand names, trademarks, and practically all other means of product identification.
a word, letter or a group of words or letters
includes only those words, symbols or marks that are legally registered for use by a single company
is the same as a trademark except that it refers to a service offering
Fedex example for brand name, trademark, service mark
- FedEx overnight delivery service is branded user the brand name FedEx (whether it's spoken or printed in any manner)
- when FedEx is printed in a certain typeface, however, it becomes a trademark. A trademark need not be attached to the product, it need not even be a word, it can be a symbol. (Ex: under armour H.. Twitter bird, etc.)
What makes a market more favorable to successful branding?
- the product is easy to label and identify by brand or trademark
- the produce quality is easy to maintain and the best value for t he price
- dependable and widespread availability is possible, when customers stat using a brand, they want to be able to continue using it
- demand is strong enough that the market price can be high enough to make the branding effort profitable
- there are economies of scale. If the branding is really successful, costs should drop and profits should increase.
- favorable shelf locations or display space in stores will help, this is something retailers can control when they brand their own products
Do all products need branding?
no.. think about if you need to know brand names or care about them for things like: extension cords, bed frames, nails, file folders, etc.
means who well customers recognize and accept a company's brand. The degree of brand familiarity affects the planning for the rat of the marketing mix - especially where the product should be offered and what promotion is needed.
5 levels of brand familiarity
means that potential customers won't buy a brand unless its image is changed - or if the customers have no other choice. Rejection may suggest a change in the product or perhaps only a shift to target customers who have a better image of the brand.
means final consumers don't recognize a brand at all even though intermediaries may use the bran d name for identification and inventory control. Ex: school supplies, inexpensive dinnerware, hardware items, etc.
means that customers remember the brand. can be a big advantage if there are many "nothing" brands on the market. Even if the consumers can't recall the brand without help they may be reminded when they see it in a store among other less familiar brands.
means that target customers usually choose the brand over other brands, perhaps because of habit or favorable past experience
means customers insist on a firm's branded product and are willing to search for it.
the value of a brand's overall strength in the market
spells out what kinds of marks (including brand names) can be protected and the exact method of protecting them.
- branders of more than one produce trust decide whether they re going to use a family brand - the same brand for several products - or individual brands for each product. Ex: Keebler snack food products.
- The use of the same brand for many products makes sense if all are similar in type and quality
a well-known brand that sellers pay a fee to use
Ex: Sunkist brand name has been licensed to many companies for use on more than 400 products in 30 countries.
separate brand names for each product - when it's important for the products to each have a separate identify, as when products vary in quality or type.
products that have no brand at a lll other than identification of their contents and the manufacturer or intermediary. general products usually offered in plain packages at lower prices. they are quite common in less-developed nations
brands created by producers, sometimes called national brands because the brand is promoted all across the country or in late regions
dealer brands/private brands
are brands created by intermediaries
Ex: Craftsman and Kenmore (Sears), Primo Taglio and Priority Pet (Safeway)
battle of the brands
the competition between dealer brands and manufacturer brands, is just a question of which brands will be more popular and who will be in control.
involves promoting, protecting and enhancing the product.
- packaging can be important to both sellers and customers because it can enhance the product.
packaging opportunity to add value for consumers and marketers: PROMOTING
- can link product to promotion
- branding at point of purchase or consumption
- product information
packaging opportunity to add value for consumers and marketers: PROTECTING
- for shipping and storing
- from tampering
- from shoplifting
- from spoiling
packaging opportunity to add value for consumers and marketers: ENHANCING PRODUCT
- the environment
- convenience in use
- added product functions
Ex: plastic tub is useful after use of Cool Whip tub.
- sends a message
- can lower distribution costs
- greener packaging creates value for buyers and sellers
Federal Fair Packaging and Labeling
requires that consumer goods be clearly labeled in easy-to-understand terms to give consumers more information. Law also calls on industry to try to reduce the confusing number of package sizes and make labels more useful.
- ethical decisions remain
explains what the seller promises about its product
- a marketing manager should decided whether to offer a specific warranty, and if so what the warranty will cover and how it will be communicated to customers.
- warranty may improve the marketing mix
- provides a service guarantee which can attract, and keep customers
says that producers must provide a clearly written warranty if they choose to offer any arrant
products meant for the final consumer
products meant for use in producing other products
can some products be both consumer and business products?
Yes, an example is Bertolli Olive Oil - might be both a consumer produce rand a business product. Consumers buy it for t heir own kitchens, but food processing companies and restaurants buy it in large quantities as an ingredient in the products they sell.
4 groups of consumer product classes
- each class is based on the way people buy products.
are products a consumer needs but isn't willing to spend much time or effort shopping for
- convenience product may be a stable, impulse or emergency product
are products that are bought often, routinely, and without much thought
(breakfast cereal, canned soup)
products that are bought quickly - as unplanned purchases because of a strongly felt need
are products that are purchased immediately when the need is great
are products that a customer feels are with the time and effort to compare with competing products.
two types of shopping products depending on what customers are comparing:
- homogeneous and heterogenous
homogeneous shopping products
- shopping products the customer sees as basically the same and wants at the lowest price. Some consumers feel that certain sizes and types of computers, televise sets, washing machines and even cars are very similar.
heterogenous shopping products
are shopping products the customer sees as different and wants to inspect for quality and suitability
are consumer products that the customer really wants and makes a special effort to find
are products that potential customers don't yet want or know they can buy so they don't search for them at all. consumers probably won't buy these products if they see them, unless promotion can show their value
new unsought products
are products offering really new ideas that potential customers don't know about yet. informative promotion can help convince customers to accept the product
regularly unsought products
are products like grad-stones, life insurance, that stay unsought but not unbought forever.
Business products are different
different than consumer products
one demand is derived from another with business products...
what is derived demand?
the demand for business products services from the demand for final consumer products.
Ex: car manufacturers buy about one-fifth of all steel products.
ugh - Product Management and New-Product Development
Product life cycle
describes the stage a really new product idea goes through from beginning to end.
four stages of product life cycle
1. market introduction
2. market growth
3. market maturity
4. sales decline
- PRODUCT LIFE CYCLES DON'T RELATE TO INDIVIDUAL PRODUCTS, IT DESCRIBES INDUSTRY
SALES AND PROFITS FOR A
PRODUCT IDEA* WITHIN A PARTICULAR PRODUCT-MARKET.
market introduction stage
- investing in the future
sales are low as a new idea is first intro ducted to a market. customers aren't looking for the product. even if the product offers superior value, consumers don't' even know about it
- informative promotion is needed to tell potential customers about the advantages and uses of the new product concept.
- profits go up and down
- market growth stage, industry sales grow fast, but industry profits rise and then start falling.
- the innovator begins to make big profits as more and more customers buy.
- competitors see the opportunity and enter the market.
- some just copy the most successful product or try to improve it to compete better.
- THIS IS THE TIME OF THE BIGGEST PROFITS FOR THE INDUSTRY* , it is also a time of rapid sales and earnings growth for the companies with effective strategies. But it is toward the end of this stage when industry profits begin to decline as a competition and consumer price sensitivity increase.
market maturity stage
- sales level off, profits continue down
occurs when industry sales level off and competition gets tougher. Many aggressive competitors have entered the race for profits, except in oligopoly situations.
- industry profits go down throughout the market maturity stage because promotion costs rise and some competitors cut prices to attract business. Less efficient firms can't compete with this pressure, and they drop out of the mark, making a long-run downward pressure on prices.
- new firms may still enter the market here, increasing competition ben more, but they skip the beginning stages, the more profitable stages, so they must try to take a share of the saturated market from established firms which is difficult and expensive.
- persuasive promotion becomes even more important during the market maturity stage.
- products may only differ slightly, most competitors have discovered effective appeals or just copied the leaders.
sales decline stage
- new products replace the old.
- price competition from dying products becomes more vigorous - but firms with strong brands may make profits until the end because they have successfully differentiated their products
is it better to be the prioneer or follower, which strategy works best?
- pioneer is the first to market with a new product otherwise there are followers.
- on average pioneers tend to be less profitable over the long-run, in part because many do not survive.
- there is an advantage to being the "second-mover" one that quickly follows the pioneer, second-movers that have strong customer focus and respond quickly with a superior marketing mix can build market share during the market growth stage
- the sales of some products are influenced by fashion - the currently accepted or popular style. Fashion-related products tend to have short life cycles. What is currety popular can shift rapidly
is an idea that i fashionable only to certain groups who are enthusiastic about it.
- these are more short lived than regular fashion.
planning for different stages of the product life cycle
- length of cycle affects strategy planning
- introducing new products
- be prepared to pivot to a new marketing mix
- pioneers may need help
- managing maturing products
- improve the product or develop a new one
- develop new strategies for different markets
- stimulate growth with new uses
- phase out dying products
what is a new product
one that is new in ANY WAY for the company concerned
- customers don't see all new products the same way
types ofnew products from the customers view
- continuous innovation: don't require customers to learn new behaviors
- dynamically continuous innovations: require minor changes in customer behavior.
Federal Trade Comission
- the federal government agency that poices antimonopoly laws. to be called new, says the FTC, a product must e entirely new or changed in a functionally significant or substantial respect.
New PRODUCT development process
- idea generation
- idea evaluation
- ideas from customers
- ideas from other companies and markets
- marketing research
- competitors and other markets, company people, intermediaries, etc.
- strengths and weaknesses
- fit with objectives
- market trends
- rough ROI estimate
- safety must be considered (consumer product safety act encourages safety in product and design)
- product liability: means the legal obligation of sellers to pay damages to individuals that are injured by new products.
- ROI is a crucial screening criterion, doesn't guarantee success for the new idea but shows that at least a new idea is in the right ball park for this firm.
- reactions from customers
- rough estimates of costs, sales, and profits
- research and development
- develop model or service prototype
- test marketing mix
- revise plans as needed
- ROI estimante
- customers can react to prototypes: an early sample or model built to test a concept.
- market testing uses real market conditions to get customer reactions under real conditions to test variations in the marketing mix. Ex: may try different brand names, prices or advertising copy in different cities.
- finalize product and marketing plan
- start production and marketing
- ROLL OUT in select markets
- final ROI estimante
- steps should not be skipped, speed can be important, it's alway tempting to skip needed steps but the process moves in steps, could miss an important aspect that could make a whole strategy less profitable or actually cause it to fail.
PLACE and development of channel systems
making goods and services available in the right quantities and locations,w hen customers want them.
- product class
- product life cycle
channel of distribution
any series of firms or individuals who participate in the flow of products from producer to final user or consumer.
place décisions are guided by "ideal" place objectives
- product classes suggest place objectives
- place system is not automatic
- place decisions have LONG-RUN effects
channel system may be direct or indirect in their way of distribution.
Direct - relying on direct-to-customer e-commerce selling or opening their own store
indirect - use wholesalers, retailers and other specialists.
direct distribution: maintains control of the marketing mix.
- the internet makes direct distribution asker. E-commerce, UPS, FedEx give many firms direct access to customers whom it would have been impossible to reach in the past.
- suitable intermediaries are not available, a firm may have to go direct if this is the case.
- common with business busters and services
- some consumer products are sold direct
direct communication between a seller and an individual customer using a promotion method other than face-to-face personal elling. Sometimes direct marketing promotion is coupled with direct distribution from a producer to consumers. Park Seed Company for example sells the reds it grows directly to consumers with a mail catalog and website.
when indirect channels are best
- ex: electric products company would want their products in stores, only practical way to reach consumers is through a wholesaler.
- consumers are spread throughout many geographic areas and often prefer to shop for certain products at specific places, this is why most firms that produce consumer products rely so heavily on direct channels.
some firms may use indirect and direct channels
- when a company serves multiple target markets, it may choose to sell direct and through intermediaries.
ex: company like Autolite uses direct channels to sell its spark plugs to automobile companies like Ford. It also sells to consumer through intermediaries like Pep Boys
Channel specialists may reduce discrepancies and separations
- intermediates may supply needed information
discrepancy of quantity
mean the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumer normally want
discrepancy of assortment
means the difference between the lines a typical producer makes and the assortment final consumers or users want.
Ex: most golfers ned more than golf balls.. they want shoes, gloss, clubs, etc. and they don't want to shop for each item separately so there is a need for wholesalers to adjust to these discrepancies.
adjust the quantities or assortments of products handled at each level in a channel of distribution
adjusting quantity discrepancies by accumulating and bulk-breaking
accumulating - involves collecting products from many small prod cures. much of the coffee that comes from Columbia is grown on small farms int he mountains. Accumlating the small corps into larger quantities is a way of getting the lowest transportation rate and making it more convenient for distant food processing companies to buy and handle it. accumulating is especially important in ls-devleoped countries and in other situation, like agricultural markets, where there are many small producers
bulk-breaking: involves dividing larger quantities into smaller ones as product get closer to the final market
- may involve several levels in the channel
- wholesalers may sell smaller quantities to other wholesalers or directly to retailers. Retailers continue breaking bulk as they sell individual items to their cutovers.
adjusting assortment discrepancies by sorting and assorting
SORTING: means separating products into grades and qualities desired by different target markets.
Ex: an investment firm might offer its customers shares in a mutual fund mad dup only of stocks for companies that pay regular dividends. Similarly, a wholesaler that specializes in serving connivence stores may focus on smaller packages of frequently used products.
ASSORTING: means putting together a variety of products to give a target market what it wants.
- This usually is done by those closest to the final consumer or user - retailers or wholesalers who try to supply a wide assortment of products for the convenience of their customers. Thus, a wholesaler selling Yazoo tractors and mowers to golf courses might also array Pennington grass seed and Scott fertilizer
traditional channel systems
the various channel members make little or not effort to cooperate with each other. they buy and sell from each other and that's the event of theyr relationship. each channel member does only what it considers to vein its own best interest. it doesn't worry about other members of the channel. This is a shortsighted, but it says to see how ti can happen.
Managing channel relationships:
can make a channel more efficient - but not if the specialists are so independent that the channel doesn't work smoothly
occur between firms at different level in the channel of distribution. a vertical conflict may occur if a producer and a retailer disagree about how much promotion effort the retailer should give the producer's rod cut.
occur between firms at the same level in a distribution channel. Ex: a bicycle store that keeps a complete line of bikes on display, has a knowledgable sales staff and lets customers take test triodes isn't apply to find out that an online store with little inventory and no salespeople's offers customers lower prices on the same models. The online retailers gets a free tie from the competing stores's investments in inventory and sales staff.
a manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts
vertical marketing systems
are channel systems in which the whole channel focuses not he same target at the end of the channel. such systems make sense, an d are growing, because if the final customer doesn't buy the product, the whole channel suffers. 3 types of vertical marketing systems: corporate, administered, and contractual.
corporate channel systems
corporate ownership all along the channel - we might say the firm is going "direct." but actually the firm may be handling manufacturing, wholesaling an retailing - so its more accurate to think of the firm as a vertical marketing system
acquiring firms at different levels of channel activity, Ex: in England most of the quaint local pubs are not actually owned and operated but the large breweries
administered channel systems
the channel members informally agree to cooperate with each other. they can agree to routinize ordering, share inventory, and sales information over computer networks, standardize accounting and coordinate promotion
contractual channel systems
the channel members agree by contract to cooperate with each other. with both of these systems the members retain some of the flexibility of a traditional channel system.
ideal market exposure
makes a product available widely enough to satisfy target customers needs but not exceed them.
- too much exposure only increases the total cost of marketing
is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product.
- SELL IT WHERE THEY BUY IT
is selling through only those intermediaries who will give the product special attention
- SELL IT WHERE IT SELLS BEST
- REDUCE COSTS AND GET BETTER PARTNERS.
A selective policy might be used to avoid selling to wholesalers or retailers that
1. place orders that are too small to justify making calls 2. make too many returns or request too much service 3. have a poor credit rating or
4. are not in a position to do a satisfactory job.
- selective distribution can produce greater profits not only for the producer but for all channel members.
- selective often moves to intensive as market grows
is selling through only one intermediary in a particular geographic area. as we move from intensive to exclusive distribution, we give up exposure in return for some other advantage - including but not limited to cost.
- sometimes makes sense - an extreme case of selective distribution - the firm selects only one wholesaler or retailer in each geographic area. Besides the various advantages of selective distribution, producers maya aunt rouse exclusive distribution to help control prices and the service offered in a channel.
- legal if it doesn't hurt competition
many firms use more than one channel of distribution
and it is becoming more common to use multichannel distribution
occurs when a producer uses several competing channels to reach the same target market - perhaps using several intermediaries in addition to selling directly. it is becoming more common. A single target market can buy a new Apple iPod t apples website, an apple store, only retailer or a physical store like Target, or a college boostore.
- ethical decisions may be required
reverse channels are important too.. which are:
channels used to retrieve products that cutovers no longer want. The need for reverse channels may arise in a variety of different situations. Toy companies, automobile firms, drug companies, could all have to recall products because of safety problems, etc.
- new laws require reverse channels in some industries
- reverse channels sustainable and profitable
- plans for reverse channels
entering international markets.. what comes first
exporting often comes first when entering international markets
means selling the right to use some process, trademark, patent or other right for a fee or royalty
means that the seller provides only management and marketing skills - others own the production and distribution facilities. some mines and oil refineries are operated this way - and Hilton operates hotels all over the world for local owners using this method.
a domestic firm entered into a partnership with a foreign firm. As with any partnership, there an be honest disagreements over objectives, for example how much profit is desired and how fast it should be paid out, as well as operating policies. Where a close working relationship an be developed, perhaps baed on the firms technical and marketing know-how and the foreign partner's knowledge of the market and political connections - this approach can be very attractive to both parties.
means that a parent firm has division (or owns a separate subsidiary firm) in a foreign market. this gives the parent firm complete control of marketing strategy planning. Direct investment is a big commitment and usually entails greater risks
Greater approaches for entering international markets
GENERALLY INCREASING INVESTMENT, RISK, AND CONTROL OF MARKETING .. more risk at each level below, least risk to most risk.
- management contracting
- joint venture
- direct investment
DISTRIBUTION CUSTOMER SERVICE AND LOGISTICS
is the transporting, storing and handling of goods in ways that match target customers' needs with a firms marketing mix - both within individual firms and along a channel of distribution.
Physical Distribution (PD)
is another common name for logistics. many different combinations of logistics.
- logistics are very important to both companies and consumers. These costs vary from firm to firm and from a macro-marketing perspective from country to country.
Physical distribution customer service level
customers want products, not excuses
- physical distribution is invisible to most consumers, as it should be. It only yes their attention when something goes wrong, where at that point it will be too late to find a way to make them happy
customer service level
how rapidly and dependably a firm can deliver what they, the customers want.
trade-offs of costs, service and sales
most customers would prefer very good service at a very low price. but that combination is hard to provide because it usually costs more to provide higher levels of service. So most physical distribution decisions involve trade-offs between costs, the customer service level and sales.
Physical Distribution (PD) concept
says that all transporting, storing and product handling activities of a business and a whole channel system should be coordinated as on system that seeks to minimize the cost of distribution for a given customer service level.
total cost approach
involves evaluating each possible PD system and identifying all the costs of each alternative. this approach uses the tools of cost accounting and economics. costs that otherwise might be ignored - like inventory carrying costs - are considered. the possible costs of lost sales due to a lower customer service level may also be considered
is the marketing function of moving goods
- it can be costly
- governments may influence transportation
- transporting function must fit the whole strategy
large loads moved a low cost
delivery speed: average
# locations: extensive
ability to handle variety of goods: high
frequency of shipments: low
dependability in meeting schedules: medium
trucks are more expensive, but flexible and essential
delivery high: fast
# locations: very extensive
ability to handle variety of goods: high
frequency of shipments: high
Dependability in meeting schedules: high
- ship it overseas, but slowly
- inland waterways are important too - Mississippi river
cost: very low
delivery speed: very slow
# locations: limited
ability to handle variety of goods: very high
frequency of shipments: very low
dependability in meeting schedules: medium
Pipelines move oil and gas
delivery speed: slow
# locations: very limited
ability to handle variety of goods: very limited
frequency of shipments: medium
dependability in meeting schedules: high
airfreight is expensive, but fast and growing
- but airplanes may cut the total cost of distribution
cost: very high
delivery speed: very fast
# locations: extensive
ability to handle variety of goods: limited
frequency of shipments: high
dependability in meeting schedules: high
put shipments in containers and you can
move between different modes of transportation easily
grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination. this protects the products and simplifies handling during shipping. some containers are as large as truck bodies.
means loading truce retailers or flatbed trailers carrying containers - on railcars to provide speed and flexibility. Railroads now pic up truce trailers at the producers location, load them onto specially designed rail flatcars and haul them as close to the customer as rail lines run. The trailers are then hooked up to a truck tractor and delivered to the buyers door. Similar services are offered on oceangoing ships- allowing door-to-door services between cities around the world
- in developing countries can cost more
- transportation choices have environmental costs too
- transportation analytics aid the environment and lower costs.
is the marketing function of holding goods o they're available hone they're needed.
- store it and smooth out sales, increase profits and consumer satisfaction
- storing varies the channel system
- goods are stored at a cost
- rapid response cuts inventory cuts
is the amount of goods being stored
specialized storing facilities may be required
- warehousing facilities cut handling costs too
are storing faculties owned or leased by companies for their own use. most manufacturers, wholesalers and retailers have some storing facilities either in their main buildings or a separate location.
are independent storing facilities. they can provide all these services that a company's own warehouse can provide. A company might choose a public warehouse if it doesn't have a regular need for space. Ex: Tonka Toys uses public warehouses because its business is seasonal.
The Distribution Center
A different kind of warehouse: "don't store it, distribute it"
- is a special kind of warehouse design the speed the flow of goods and void unnecessary storying costs. Today the distribution center concept is widely used by firms at all channel levels.
- it reduces handling costs to regroup and store at the same place, if both functions are required. but sometimes regrouping is required when storing isn't.
- direct store delivery skips the distribution center
- managers must be innovative to provide customers with superior value
retailers, wholesalers, and their strategy planning
covers all of the activities involved in the sale of products to final consumers.
planning a retailers strategy
- consumers have reasons for buying from particular retailers
- retailers make decision sabot the whole marketing mix
- strategy required carefully setting policices
- different types of retailers emphasize different straetgies
Examples of marketing strategy decisions for retailers for each for the 4 P's
- product selection (width and depth of assortment, brands, quality)
- after-sale service
- special services (special orders, entertainment, gift wrap)
- physical stores and/or sales over the Internet
- number and location of stores
- shopping atmosphere
- store size, layout and design
- store house
-credit cards, whether to offer a store card
- discount policies
- frequency and level of sales prices
- charge (or not) for delivery or other services
- publicity (facebook, twitter)
- salespeople (# and training)
- helpful information (demo's displays, online videos, on lie reviews)
which carried anything they could sell in reasonable volume - were the main retailers in the US
single-line or limited-line tores
sotres that specialize in certain lines of related products rather than a wide assortment Many specialize not online in a single line, such as clothing, but also in a limited line within the broader line. Within the clothing line, a retailer might carry only shoes, formal wear, or even neckties but offer depth in that limited line.
a type of inventional limited-line store - is usually small and has a distinct "personality"
- specialty shops sell special types of shopping products, such as high-quality sporting goods, exclusive clothing, baked goods, or even antiques. They aim at a carefully defined target market by offering a unique product assortment, knowledgeable sales clerks and better service.
are larger stores that are organized into may separate departments and offer any product lines.
- each department store is like a separate limited-line store and handles a wide variety of shopping products, such as men's wear or housewares. They are usually sting in customer services, including credit, merchandise return, delivery and sales help.
which says that retailers should offer low prices to get faster turnover and greater sales volumes - by appealing to larger markets.
- this concept tap plies to many types of retailers, including both those that operate stores and those that sell online.
supermarkets started the move to mass-merchandising
large stores specializing in groceries with self-service and wised assortments
- upset some conventional retailers
offered "hard goods" at substantial price cut to customers who would go to the discounter's low-rent store, pay cash and take care of any service repair problems themselves.
- are more than discounters
are large self-service stores with many departments that emphasize "soft goods (housewares, clothing and habits) and staples (like health and beauty aids) but still follow the discount house's emphases on lower margins to get faster turnover.
Ex: Walmart and Target have checkout counters in the front of the store and little sales help on the floor.
- meet all routine needs
some supermarkets and mass-merchandisers have moved toward becoming SUPERCENTERS/HYPERMARKETS- very large stores that try to carry not only food and drug items but all goods and services that the consumer purchases
. These superstores look a lot like a combination of the supermarket,s drugstores, and mass-merchandisers from which they have evolved but the concept is differ.t - A super center is trying to meet ALL the customers' routein need at low price. Supercenter operators include Meijer, Fred Meyer, Target and Walmart. Walmart's super centers have turn dingo the largest food retailer in the US.
New mass-merchanding formats keep coming
- the warehouse club is another retailing format that quickly gained publicity
- Sam's Club and Costco are two of the largest
Single-line mss-merchandisers are coming on strong
- Toys R Us
- Best Buy
- Home Depot
Convenience (food) stores
are a convenience-oriented variation of the conventional limited-line stores. instead of expanding their assortment, hwoeve,r convince stores limit their stock to pickup or fill-in items like break, m lilk, beer and easy on the go snacks.
some have gas too
Stop N Go
- these tires must have the right assortment
is selling and delivering products through vending machines
- they are convenient
a salesperson going directly to the consumers come
- stores come to the home, in person, on television and in catalogs
Retailing on the itnernet
- internet retail is growing rapidly
- online costs for retailers and customers - higher and lower
- online buying more and less convenient
- show rooming brings channel conflict
- battling against show rooming
- online retailers use big data to personalize shopping
- technology drives retail change
wheel of retailing theory
says that new types of retailers enter the market as low-status, low-marin, low-price operators, and then, if successful, evolve into more conventional retailers offering more services with higher partaking costs an higher prices They they're threatened by new low-status, low-margin, low-price retailers - and the wheel turns again.
- mixing product lines for higher profits
- carrying any product lines they think can sell profitably. Supermarket and drugstores sell a nothing they can move in volume . Mass-merchanidsers don't just sell everyday items but also cell phones, computer printers and jewelry.
is concerned with the activities of those person or establishments that sell to retailers and other merchants, or to industrial, institutional, and commercial users, but that do not del in large amounts to final consumers
are firms whose main function his providing whiles align activities. Wholesalers sell to all of the different types or organizational customers.
Wholesaling is changing with the times
- is in decline
- opportunities remain for progressive wholesalers
- wholesalers need to add value
Wholesalers add value in different ways
- manufacturer's sales branches are considered wholesalers
manufacturers' sales branches
warehouses that producers set up at separate locations away from their factories, they're classified as wholesalers by the U.S. Census Beurear and by gov. agencies in other countries.
own (take title to) the products they sell. they often specialize by certain types of products or customers.
are merchant wholesalers that pro die all the wholesaling functions within this bail group are there types 1. general merchandisers 2. single-line 3. specialty
General merchandise wholesalers
- are service wholesalers tha carry aside variety of nonperishable item such as hardware, electrical supplies, furniture, drugs, cosmetics, and automobile equipment.
Single-line (or general-line) wholesalers
are service wholesalers that carry a narrower line of merchandise than general merchandise wholesalers.
Ex: might carry only, food apparel or certaiai types of industrial tools or supplies
are service wholesalers tha carry a very narrow range of products and offer more information and service than other wholesalers.
- provide some functions
provide only SOME wholesaling functions.
- want cash
operate like service wholesalers - except that the customer must pay cash. they are common in less- developed nations where very small retailer handle the bulk of retail transactions. Full-service wholesalers often refuse to grant credit to small businesses that may have trouble paying their bills
- do not handle the products
own (take title to) the products they sell- but they do not actually handle, stock or deliver them.
- these wholesalers are mainly involved in selling. They get orders and pass them on to producers.
deliver at a cost
specialize in delivering products that they stock in their won trucks.
- sell hard-to-handle assortments
- specialize in hard-to-handle assortments of products that a retailers doesn't want to manage and rack jobbers usually display the produts on their own wire racks.
sell through catalogs that may be distributed widely to smaller industrial customers or to retailers that might not be called on by other wholesalers. Customers place orders are a website by mail, email fax or telephone.
- they don't own the products
are wholesalers who do not own the products they sell. Their main purpose is to help in buying and selling. Agent wholesalers normally specialize by customer type and by product or product line. Bt they usually provide even fewer functions that the limits-function wholesalers
- they are more important in international trade!!!*
- freewheeling sales reps
sells similar products for several noncompeting producers - for a commission on what is actually sold. Such agents woe almost as members of each company's sales force, but they're really independent wholesalers.
export or import agents
are basically manufacturer's agents who specialize in international trade these agent wholesalers operate in every country and help international firms adjust to unfamiliar market condition in foreign countries.
- provide information
bring buyers and sellers together. Brokers usually have a temporary relationship with the buyer and seller while a particular deal is negotiated. They are especially useful she buyers and sellers don't come into the market very often.
export and import brokers
operate like other brokers but they specialize in bringing together buyers and sellers from different countries. smart brokers quickly saw new opportunities to expand their reach by using the Internt
- almost all marketing managers
take over the whole marking job of producers - not just the selling function. A selling agent may handle the entire output of lone or more producers, even competing prodders, with almost complete control.
Combination export manager
is a blend of manufacturer's gent and selling agent - handling the entire export function for several products of similar but not noncompeting lines.
- speed up the sale
provide a place where buyers and sellers can come together and bid to complete a transaction. Traditionally they were important in certain lines - such as live stock, fr, tobacco and used cars where demand and supply conditions change rapidly.
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