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
Sunday, November 27, 2011
Tuesday, November 15, 2011
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
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
Monday, November 14, 2011
"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
( 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
Sunday, November 13, 2011
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
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
Sunday, November 6, 2011
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
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
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
Saturday, November 5, 2011
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
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
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