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SC DANC 101 - Exam 3 Study Guide

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Exam # 3 Study Guide Lectures: 11-14 Lecture 11 (March 25th) - Retailing o Retailing is the process by which goods and services are sold to consumers for their personal use. o Retailers provide many benefits such as:  Providing an assortment of merchandise (often under one roof)  Allowing access to goods customers might never see  Providing interesting environments in which to spend our leisure time - Retailing Creates value o Retailing creates what economists call utility, or the value a product provides for the customer.  Form Value - utility provided by changing raw materials into a finished product. Form value is created by production. - Marketing helps production by interpreting consumers needs - eg the ford company manufactures automobiles, creating form value for consumers  Time Value - making the product available when the customer needs it. - eg kroger is open 24 hours allowing different market segments to shop at times best for them - marketing helps retailers to understand when their products need to be available to the consumer  Place Value - making the product available where a customer needs it. - Eg bank one has hundred of branch banks through the country - The ATM located in the library has more value than one located downtown  Possession Value - enhancing the ability of the customer to acquire and use the product over time. - Eg GMAC financing at the point of sale can help “seal the deal” - Transferring of products from the manufacture to the consumer - The goal is to make it easy for consumers to take possession of the product - Satisfies the consumer’s need to own the product and to have control over its use and consumption - The Wheel of Retailing o The wheel of retailing describes how retail outlets enter the market. o There are 4 stages: Bus-M 300 Low Status/Low Margins  Medium Status/Medium Margins  Higher Status/Higher Margins  Increased Competition - Forms of Ownership o Independent Retailer.  Most retailers are owned by individuals who account for most of the 1.5 million retail establishments in the U.S.  The independent store can offer customers convenience, quality personal service, and lifestyle compatibility - The Bakehouse, Kilroys o Corporate Chain  Involves multiple outlets under common ownership where centralization in decision making and purchasing occurs.  Advantages to consumers include volume discounts and multiple outlets for shopping convenience - EG Chili’s , Fridays, Target o Contractual Systems  Independently owned stores that band together to act like a chain.  EG Associated Growers- Neighborhood grocers who buy their meat from the same wholesaler o Franchises  Business-format franchises - The franchisor provides step-by-step procedures and guidelines for the most likely decisions a franchisee will face. EG Wendys or McDonalds  Product-distribution franchises - These include dealerships or soft drink distributors. EG Honda or Pepsi - Online Retailing o Allure of Online Retailing o Search for product information in hyperspace. o Retailers can update price/product information continuously. o Ordering is possible 24 hours a day. o Time-saver for many customers. o Barriers to Success  Barriers to Success  Customers may still wait a few days to receive products by mail.  People need “touch-and-feel” information before buying.  Security concerns. Concerns that inventory sold online will cannibalize store sales.  It may increase price competition. - Wholesaling o Merchant Wholesaler – Independently owned firms that own the merchandise they sell.  Two types: - General Merchandise Wholesaler – Carry a broad range of products and perform all channel functions. - Specialty Merchandise Wholesaler – Offer relatively narrow range of products. o Rack Jobbers – Furnish the racks or shelves that display merchandise in retail stores. o Cash and Carry – Sell products to retail outlets who call on them. o Desk Jobbers – They own the merchandise they sell, but do not physically handle any products. o Truck Jobbers – Small wholesaler who handle fast moving or perishable items. - Agents and Brokers o Manufacturer’s Agent – Works for several producers and carry a wide variety of products in an exclusive territory. o Brokers – Their principal function is to bring firms and individuals together to make sales. Lecture 12 (March 27th) - Personal Selling o Personal Selling is an interpersonal communications process in which a marketer’s representatives  identify prospects - effective early on in the PLC  determine needs - Effective when products need to be customized to the customer.  present product information  gain commitment  follow-up after sales - relies heavily on individual salespeople o Transaction Focuses on selling  Does more selling than listening  Emphasizes adding new customers o Relationship  Focuses on learning about needs  Does more listening than selling  Emphasizes building long-term relationships through credibility, trust, and responsiveness - Types of Selling o Field Sales  Personal sales calls – much autonomy.  Little cold calling; often serving existing customers .  Costly to firm (often >$1,000/call).  High salary potential and personal growth.  Knows the customer better than any other in company. o Sales Team  Individuals from different function areas (a sales rep, an engineer, a production person) working together to satisfy customer needs  Oracle will send both the sales rep and the network technician to a sales call. o Sales Partnering - a growing trend in marketing  Also known as collaborative selling because an alliance is formed with a customer to meet ongoing customer needs. Sales rep. is an integral part of buyer’s operation  This means working with the client to help them achieve their goals and objectives. - Forms of Personal Selling o Order Taker – Process routine orders or reorders for products already sold.  Two types: - Outside Order Takers – visit customers, arrange displays, and replace inventory stocks of resellers. - Inside Order Takers – Take care of customers who call on the retailer.  Order taker do


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