the set of business activities that add value to products and services sold to consumers for their personal or family use
selling in more than one channel (e.g., store, catalog, and Internet)
four factors manufacturers consider to establish their strategy for working with retailers
choosing retail partners, identify the types of retailers, develop their strategy, and managing a multichannel strategy
the number of channel members to use at each level of the marketing channel
designed to place products in as many outlets as possible
granting exclusive geographic territories to one or very few retail customers so no other retailers in the territory can sell a particular brand
relies on a few selected retail customers in a territory to sell products
self-service retail food store offering groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise
stock keeping units (SKUs)
represents a unique inventory item
Limited assortment supermarkets
or extreme value food retailers
limited assortment stores offer one or two brands and sizes, one of which is a store brand
To compete successfully against intrusions by other food retailing formats, conventional supermarkets differentiate their offerings by
(1) emphasizing fresh perishables, (2) targeting health-conscious and ethnic consumers, (3) providing a better in-store experience with a better overall atmosphere and demonstrations, and (4) offering more private-label brands
large stores (185,000 square feet) that combine a supermarket with a full-line discount store
large retailers (100,000–150,000 square feet) that offer a limited and irregular assortment of food and general merchandise, little service, and low prices to the general public and small businesses
provide a limited variety and assortment of merchandise at a convenient location in 3,000- to 5,000-square-foot stores with speedy checkout
retailers that carry a broad variety and deep assortment, offer customer services, and organize their stores into distinct departments for displaying merchandise
Full-line discount stores
retailers that offer a broad variety of merchandise, limited service, and low prices
To better compete, department stores are
1) attempting to increase the amount of exclusive and private-label merchandise they sell, (2) strengthening their customer loyalty programs, and (3) expanding their online presence
concentrate on a limited number of complementary merchandise categories and provide a high level of service
specialty stores that concentrate on pharmaceuticals and health and personal grooming merchandise
or big box retailers or category killers
offer a narrow but deep assortment of merchandise.
home improvement center
a category specialist offering equipment and material used by do-it-yourselfers and contractors to make home improvements
Extreme value retailers
small, full-line discount stores that offer a limited merchandise assortment at very low prices
off price retailer
or close-out retailer
offer an inconsistent assortment of brand name merchandise at a significant discount from the manufacturer's suggested retail price (MSRP)
merchandise might be in odd sizes or unpopular colors and styles
off-price retailers owned by manufacturers or department or specialty store chains
outlet stores owned by manufacturer
firms that primarily sell services rather than merchandise
mobile commerce (M-commerce)
Communicating with or selling to consumers through wireless handheld devices such as cellular phones.
share of wallet
The percentage of the customer's purchases made from a particular retailer.
Instant messaging or voice conversation with an online sales representative.
Computer program, installed on hard drives, that provides identifying information.
Customers who formerly made purchases through one retail channel switch to a different retail channel without increasing the overall sales to the retailer.
considerations for choosing retail partners
Basic channel structure, Distribution intensity, Where the target customers expect to find the products, and Channel member characteristics
components of a retail strategy
To develop a coordinated strategy, both retailers and manufacturers need to consider all the four Ps in conjunction: product, place, promotion, and price.
benefits of stores
Giving shoppers a place to browse. They can touch and feel products, obtain personal services, pay using cash or credit, engage in an entertaining and social experience, receive instant gratification, and reduce their sense of risk.
benefits of multichannel retailing
It can exploit the benefits and mitigate the limitations of each channel in order to expand overall market presence. Offers the chance to gain a greater “share of customers' wallet” and may provide more insight into their buying behaviors.
challenges of multichannel retailing
Retailers must organize their operations carefully to ensure an integrated customer experience. They must have an integrated CRM system and determine how to maintain a consistent brand image across the various channels.
Before opening a retail store, which question(s) do retailers need to address?
Where will customers want the products?When will customers want the products?What prices will customers be willing to pay?What assortment of products will customers want?
Wholesalers sell to
institutions, governments, retailers, and industrial users.
To create an atmosphere that will offer a more pleasant shopping experience, retailers use
lighting, music, scents
Traditional store-based retailers, catalog retailers and some manufacturers have evolved into multichannel retailers for all the following reasons
electronic channels give them opportunities to overcome problems in their traditional channels, they can expand their market reach, they can expand their "share of wallet.", and they gain valuable insights into their customers' shopping behavior.
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