Retailing
    - a consumer market distribution channel 
      function
    - an organization (retailer) buys products from
      firms and sells them directly to consumers
    - a retailer is a reseller in the marketing channel
            over 1,100,000 retailers in the U.S.


Retail Industry
    - second largest industry in the U.S.
           12 % of U.S. employment
           $ 4.2T in annual sales
    - 90% of retail stores are single-store businesses
       but account for less than half of retail sales
    - majority of revenue generated by companies 
      that run retail chains
    - biggest retailer in the world is Walmart 
      $344B in revenue last year
             operates a chain of discount wholesale 
             stores emphasizing low prices


 Retail Sales and the Economy
    - important *economic indicator, gives glimpse 
      into  U.S. Gross Domestic Product number
      ( which indicates how fast economy is
      growing or shrinking)
          *consumer spending makes up about 70% of      
            GDP


Retailer Benefits to Customers and Suppliers


    Customers - ability to purchase small quantities
                        of wide assortment of products at
                        reasonable prices
    Suppliers - opportunities to reach target market
                       with right products at the right time,
                       build demand, provide customer 
                       feedback


Key Issues for Retailers


    Customer Satisfaction - develop strategies that 
             bring the customers back
    Acquire the Right Products - identify what 
             customer want, negotiate with 
             suppliers to obtain products on time
    Product Cycle - new innovated products
             released with high prices to maximize
             profits early on ( flat panel HDTV, 
             updated iPads) - has created highly 
             competitive situation among retailers        
    Product Presentation - present products to 
             customers in a way to generate interest
    Traffic Building - use promotional methods to
             build interest 
                                a. people visiting the store
                                b. visits to the website
    Layout - store physical layout important in 
             creating a retail "experience" that will
             attract customers
             Online "layout" where site navigation
             and usability could make difference in
             site success
    Location - well placed stores, high visibility,          
             easy access can generate more traffic
             and be highly valuable
             must project appealing image to attract
             customers
             must understand the trade-off between 
             cost and benefits of a location
             neighborhood, community, regional
             shopping centers
    Positioning
            identifying unserved or underserved 
            market segment - serve it with strategy to
            distinguish from other retailers in mind
            of consumer 
    Keeping Pace with Technology - technology has
             changed all areas of retailing:  
                  - customer knowledge
                  - product movement
                  - point of purchase
                  - web technologies


    E-Commerce
            - internet allows consumers to shop and 
              purchase online 
            - now traditional retailers sell products on
              their own website
            - currently represents 3% of total retail 
              industry revenue - growth is steady
            - more widespread use expected as more     
              internet-savvy customers enter the market


    Target Markets Served by Retailers
            Mass Market
            Specialty Market
            Exclusive Market


    Pricing Strategy
            Discount Pricing
            Competitive Pricing
            Full Price Pricing
                ( name the target market associated with
                  the pricing strategies above )


    Promotional Focus
            Advertising
                 traditional media
                 internet for retailers selling online
            Direct Mail
                 catalog retailers
                 small local companies
            Personal Selling
                 expensive, high end products


    Major Types of Retail Stores


        Two General Categories 
               1. General Merchandise Retailers
               2. Specialty Retailers
        
        General Merchandise Retailers
               offer a variety of product lines stocked in
               considerable depth - broad product mix


               Department Stores
                    generally service oriented
                    organized into separate departments
                        housewares, cosmetics, apparel,...
                    Macy's, Sears
               Discount Stores
                    self-service, lower margins than Dept.
                    stores for higher volume
                    wide variety of products
                    Walmart, Target
               Convenience Stores
                    small, self-service, long hours, narrow
                    assortment of convenience products
               Supermarkets
                    large self-service stores, carry 
                    complete line of food products plus
                    consumer personal items
                    lower prices than neighborhood stores
                    Wegmans
               Superstores
                    very large stores, self-service
                    carry all the products of supermarkets 
                    plus other routinely purchased 
                    consumer products and services
               Warehouse Clubs (Buying Clubs)
                    large scale mass merchandising
                    low cost
                    members only
                    handle many brand  leader products
                    few services, mainly self-serve 
                    BJ's
                    Sam's Club
        
      Specialty Retailers
          offer substantial assortments in a few
          product lines
                   Radio Shack
                   Gap Inc.
                   Home Depot. Lowes
                   Staples, Office Depot


****************************************


The (U.S.) Retail Sales Report
        Released by: Census Bureau and Department
                             of Commerce
        Coverage: Previous months sales data
        Release Date: 13th of the month


    Indicator tracks $ value of physical merchandise
    sold within retail trade (uses sampling)
    Includes companies of all sizes, from Walmart
    to independent small- town businesses.
    Retail sales considered a coincident indicator - 
    activity reflects current state of the economy
    Also considered a key pre-inflationary indicator


    Has two components:
           1. Total sales figure ( and % change from 
               previous month 
           2. "Ex-autos" figure due to large ticket
               price and known seasonality
                    
               










                      




   

MARKETING    PLAN   PROJECT


   Target Market Selection ( market segmentation approach)


         1. Identify segments of the overall market for personal
              sized (16.9 Fl. oz.) bottled water using consumer 
              segmentation variables and specific needs that are similar


            demographic - geographic - behavioristic - psychographic
                   
        2. Chose the segment (s) that fit best with the organizations
             goals and objectives. 
                  large enough ? growing ? support company mission ?


             This is/are the target market(s)
                 
         3. Develop a marketing strategy with a marketing mix that             
             appeals to the target market(s)
             
                    product - price - promotion - distribution


   Marketing Research Project 


          Describe a project to be completed by the end of year 1 that
          will provide relevant information for the year 2 plan


   Pricing
              
              Objective
                   Market Share
                   ROI
                   Profit
                   Cash Flow


               Strategy
                   New Product
                   Promotional
                   Psychological


                Competition
                   Price
                   Non-Price
        

"New Kid" on the Marketing Block
           ( Re:11/13/11 Article D&C)


Organizations looking more to online to reach potential customers to tell their stories and define their brands


Audience is shifting where it is spending time ( iPhone, iPad, computer) so organizations have to switch


Online social media, multimedia storytelling, games, interactive websites moving in with traditional media advertising platforms (print, TV, ...) to reach the customer


Example
Cokes social media experiment in 2010
Sent three 20+ folks on trip around the world to visit every country where coke is sold. "Expedition 206" asked people, "What makes you happy? "
In 1 year they visited 185 countries, posted 400 videos on Coke's YouTube channel and constant posts on Facebook and Twitter social pages.
The idea was to create "Buzz" about the project and indirectly about Coke 


 In 2010  $ 80B spent globally on online advertising ( up 17% over 2009)
Online advertising is 16% of the $ 496B global advertising market


Online marketing and branding changing rapidly due to growth of mobile mobile personal communication devices ( smart phones, tablet computers, ...)


Organizations are trying to find right balance of marketing tools


Companies now trying to engage customers instead of talking to them. Social interaction becoming a key ingredient for marketing and branding campaigns

Distribution
    activities that make products available to customers
     when, where and in the right quantity they want to 
     purchase them


       


   The Supply Chain
         a system of organizations, technology, activities, people,
         information, and resources involved in moving a product 
         from supplier to customer.
         (* A Marketing Channel is part of the Supply Chain )


         activities include transforming natural resources, raw 
         materials and components into a  finished product 


                                           Suppliers
                    
                                           Manufacturer                *


                                           Wholesaler                    *


                                            Retailer                        *


                                            Customer                     *


       Three main functional flows of the Supply Chain


                   Physical ( raw materials, components, product)


                   Information


                   Financial


   Supply Chain Management
         coordinates and integrates *key business processes of
         supply chain organizations from supplier to manufacturer
         to wholesaler to retailer to customer


         The *key business processes:


                   Physical flow
                   Information flow
                   Financial flow
                         


                  Primary Objective
                         fulfill customer needs by the most efficient 
                         use of Distribution resources 


                         make product available at the right time, 
                         the right place and in the right quantity
       


                         Another take:
                               match demand with supply with minimum          
                               inventory and cost
         

Integrated Marketing Communications


     Coordination of all promotional efforts to send a consistent
     message to the consumer


     Promotion 
          communicates favorable information about organization and 
          product to potential buyers


          informs - persuades - reminds


          primary role is to stimulate demand


          Includes:
                 advertising - personal selling - sales promotion
                 - public relations 


          Objectives:
                 - create awareness
                 - stimulate demand
                 - inform
                 - identify prospects
                 - encourage product trial
                 - retain loyal customers
                 - counter competitive promotion
                 - facilitate reseller support
                 - reduce sales fluctuations


          Promotion Mix Elements (4)
                  Advertising
                  Personal Selling
                  Sales Promotion
                  Public Relations


          Selecting Promotion Mix Elements
  
                  1. Promotion Budget
                         - how much money is available
                         - can determine what mix elements can be used


                  2. Organization Objective
                         - create awareness ?
                         - stimulate demand ?
                         - counter competitive promotion ?
                         ( see objectives list above )


                  3. Target Market Characteristics
                        - demographics
                        - size
                        - location/concentration
                        - behavior/lifestyle


                  4. Product Characteristics
                        - organization/consumer
                        - seasonal
                        - service product
                        - commodity
                        - technical


                  5. Price
                        - low price
                        - high price/ very high price
                        - introductory price
                        - phasing out price


                  6. Distribution 
                        - intensive
                        - limited
                        - exclusive


                   7. Product Life Cycle Stage
                        introductory - growth - maturity - decline


                   8. Organization Stage
                         - start-up
                         - growing
                         - mature


                   9. Organization Type
                         - producer
                         - reseller
                         - institutional
                         - government




     Word of Mouth Communication 


           personal, informal exchanges where customers share 
           information about products, brands, companies


           user generated content


           more people are going online to give and share opinions
           on products, brands, companies


           Electronic Word of Mouth


                   Social Media - a web technology application links
                   people to networks that allows rapid exchange of 
                   user generated information


                   Social Media marketing programs try to create content
                   that attracts attention and encourages readers to share 
                   with their social network


                   The message resonates because it appears to come 
                   from a trusted third party as opposed to a company


                   Marketers still trying to find most effective use of
                   Social Media - still a developing category 


                   Site like Twitter and Facebook (channels) have made
                   entry easy


                   Viral Marketing
                    Purpose is to facilitate and encourage people to pass
                    along a marketing message. Needs a high pass - along
                    rates.
                    Goal is to create a viral message  that appeals to
                    individuals with high social networking potential with
                    a high potential of spreading the word in a short time.


                    Buzz Marketing
                    Viral marketing technique that attempts to make each
                    encounter with a consumer appear to be a unique
                    spontaneous exchange of information. 
                    Goal is to  find  those who are heavy influencers of 
                    their peers. They create a sophisticated WOM 
                    campaign that is adopted by flattered consumers who
                    are willing to spread the word




                    WOM - a rapidly developing communication tool that 
                    can work both ways for the organization












          

Advertising 
     paid form of communications -uses mass media  


     Why advertise ?  To stimulate sales!


   Types of Advertising
       institutional - advocacy - product - pioneer - competitive
       comparative - reminder - reinforcement


   Advertising Campaign   
       1. Identify the target audience
               - all or part of the target market
               - the focus of advertisements
               - analyze demographics, behavior, ...


       2. Define advertising objectives 
               a. sales 
                       $'s, %, market share
               b. communications
                       increase awareness, change attitudes, ...


       3. Create advertising platform
               - advertiser selling points
               - target audience issues, benefits 


       4. Determine advertising appropriation 


       5. Develop media plan 
               - analyze demographics, location, media behavior of        
                 target audience
               - select media to be used
                     primary goal - reach largest # of people in
                                                 the target audience
                     secondary goal - achieve appropriate message 
                                                 reach and frequency for target
                                                 audience (TA)
                         reach - % of consumers in TA exposed to adv. 
                                     in a stated period
                         frequency - # of times consumers in TA exposed to
                                            the adv.
              - establish the media schedule
                    continuous - flighting - pulsing


     6. Create advertising message 
             content and form depend on several factors
                - advertising campaign platform
                - product use, benefits, features
                - target audience characteristics
                - campaign objectives
                - media used


     7. Evaluate campaign effectiveness
                sales objectives - change in $'s,%, market share, ... ?
                communications objectives - increased awareness,
                                            brand recognition, ...?




Public Relations
     communicate favorable image of organization, product,
     person and to promote goodwill


    PR Tools


      1. Information materials
            web sites - brochures - newsletters - annual reports - ...


      2. Organization identity materials
            logos - business cards - stationary - signage - ...


      3. Speeches


      4. Event sponsorship
   
      5. Charitable works/donations


      6. Publicity
             about organization, product, people, event, ...


                  no charge - news story form - mass medium


            Publicity vehicles
                  news release
                  feature article
                  captioned photo
                  press conference


          Use PR programs for positive and negative events


  


       

Personal Selling


  Paid personal communication - informs, 
  persuades customers to buy products


     1.0 Advantages
               - freedom to adjust message
               - focus on most promising prospects


     2.0 Disadvantage
               - cost
                    ( generally most expensive of 
                      the  promotion mix elements)


     3.0 Primary Objectives
               - identify potential buyers
               - convince prospects to buy
               - keep customers satisfied


     4.0 Personal Selling Process
              (1) Prospecting
                      a. develop potential customer list
                             - referrals,databases, web,
                               personal (WOM), associates
                      b. evaluate list and prioritize
                             - able,willing,authorized to buy
                             - when can they buy
             (2) Prospect Analysis
                      - needs, preferences, decider, ...
             (3) Contact Prospect
                     - referal, direct mail, cold call,
                       networking, web, ...
             (4) Presentation to Prospect
                    - attract and hold attention
                    - stimulate interest
                    - develop desire for product
                          "Elevator Speech"
                              quick summation of what your
                              company does and how it
                              benefits customers (30 sec.)
              (5) Overcome Objections
              (6) Close the Sale
              (7) Follow up


    5.0 Types of Sales Persons
              a. order getters
              b. order takers


    6.0 Types of Selling
              a. team selling
              b. relationship selling




Sales Promotion


      A  direct inducement offering added 
     value/incentive  for the product to stimulate:
          Resellers - Sales Persons- Consumer  


     Includes all promotional activities other than
     advertising - personal selling - publicity


     Usually combined with another promotional
     effort - advertising and/or personal selling


     1.0 Positive point
               - can increase sales


     2.0 Negative point
               - can affect Brand Image if excessive


     3.0 Two main types
               a. Consumer sales
               b. Trade sales


     4.0 Consumer sales promotion tools
               coupons - demonstrations - rebates
               frequent user - free samples - contests


     5.0 Trade sales promotion tools
              sales contest - cooperative advertising
              dealer listing - buying allowance
              premium money


     6.0 Factors to consider when selecting sales
           promotion methods
              a. organization objectives
              b. characteristics of the product
              c. characteristics of target market
              d. how product is distributed
              e. competitive situation
              f. legal environment
              






     


   
      
                     

Product  Positioning


Consumer behavior is guided by their perception of reality


Positioning is creating and maintaining a certain favorable perception in the consumers mind about a product compared to the competition 


Strong positions are created through consistent advertising and PR
                                                                                                          
Some Positioning Strategies


      Product features/benefits
                  Tylenol - " more powerful but safer " than aspirin


      Consumer's reason for buying the product
                   Yogurt - "more healthful"


      Product Price and Quality
                    ( high price sometimes acts as a signal for quality)
                    Mercedes autos
                    Grey Goose vodka


      Product specific use
                    WD40


      Product User
                    Celebrity user of product


      Competitor
                    Direct/Indirect/Avoidance
                         (don't challenge leaders head on)
                                                                                                         
Steps to Establish a Proper Position


       1. SWOT analysis
                     Market Threats and Opportunities
                     Organization Strengths and Weaknesses 
       2. Analyze the target market
                     characteristics, needs, size, growth, ...
       3. Analyze competition ( strengths - weaknesses)
       4. Economic trends
       5. Develop the marketing mix
       6. Develop a Brand (name)
       7. Determine how you want to be perceived by 
           target market
       8. Create a positioning message
       9. Strong, sustained promotion and PR


                                                                                                        


"The Battle for Your Mind"       Ries & Trout   1981
    (a recognized marketing classic)


Positioning now a key aspect of Marketing Communications


Some Key Points from the book


    Information Overload
        Consumers bombarded with continuous stream of product        
        advertising
        So concept is to position product in mind of consumer
        The mind reacts to high ad volume by accepting only what
        is consistent with prior knowledge or experience
           Advertiser - present simplified message
                             - focus on perceptions of consumer and not
                               product reality


    Getting into the Consumers Mind
         Be First !
             e.g. Miller Lite not the first light beer but was first to be
                    positioned as a light beer ( complete with name)


                    7-Up   #3 behind Coke and Pepsi but established 
                    the drink as the #1 alternative - "The Uncola"


                    Xerox - the first in the plain paper copier market


   Position of a Leader
         Brand success not due to marketing acumen of the company !
         It is because the company was first in the product category
                    Xerox - first in plain paper copier market
                                 IBM couldn't compete
                                 Xerox in other markets (not first)


   Power of a Name
         Brand's name perhaps most important factor affecting 
         consumer perception and positioning of the product
         Use "descriptive" words 
         e.g.  "Die Hard" - batteries   "People" - gossip magazine
                 " Head and Shoulders" - shampoo
                 " Close Up" - toothpaste


                                                                                                    
Repositioning
        Usually used for improvement of existing products 


       physically change product
       change price
       change distribution
       change image through promotion
       change the target market


                                                                                                    
Pricing - Does it all start with Positioning ?


       Pricing and positioning are inseparable


       Don't price until you figure out the position your product will      
       have in the market


       Ask these four questions:


            Who are your competitors ?


            How is your product different from your competitors ?
                 Differentiation is critical but using low  prices as
                 the primary differentiator is fatal


            How do you want to be known in the market ?
                 Describe the position you want to have in terms  of
                 how you want your target market to perceive you


            What are the prices of your competitor products ?
                 What price range is consistent with the perception you
                 want your target market to have of your product




        Put yourself in the shoes of your customer. Figure out how
        much your product is worth to them