Fifth Midterm Questions Ch 16 Ch 14 Ch 7 Ch 9 Retailing Price Global Market Research 9 questions 9 questions 4 questions 4 questions Chapter 16 Retailing Intro Barbie Retailing where marketing meets the customer o Defined as the set of business activities that add value to products and services sold to consumers for their personal or family use o Retailers not manufacturers are drivers of supply chain Factors in establishing relationship with retailers may be simultaneous o 1 Choosing Retailing partners Fit location size and level of sophistication type and availability of the product image of retailer Manufacturers use retailers to pull together the greatest possible customer convenience and satisfaction 4 Basic channel structure getting it into stores depends on vertical integration and brand recognition Customer expectations Channel member characteristics the larger the retailor the less intermediaries and the more functions they perform Distribution intensity o Intensive put it everywhere o Exclusive most appropriate retailers represent their products Retailors don t have to worry about competing with a bunch of other Incentive to carry more inventory and used extra advertising personal selling and sales promotion o Selective In the middle o Conventional self service grocery that keep over 30K SKUs o Limited assortment ALDI designed to maximize efficiency and reduce costs 40 lower To compete against other food retailing formats 1 Emphasizing fresh perishables 2 Targeting health conscious and ethnic consumers with new selective items 3 Providing a better in store experience 4 More Private label ex Trader Joes Supercenters one stop shop Warehouse Club Sam s o 2 Identifying types of retailers Food retailers Supermarket Convenience store limited in depth and breadth and charge higher prices facing competition increase so they respond by coming more like stores General Merchandise Retailers Department stores focus on soft goods Upscale high fashion upscale traditional value oriented Full Line Discount Wal Mart and Target Specialty limited number of merchandise categories and high levels of service Category Specialists big box retailers or category killers offer a narrow but deep assortment of merchandise o Their dominance kills off competition o Ex Home improvement centers Off Price Retailers close out retailers Marshalls etc sell name brands at a discount o Outlet stores and factory outlets Extreme Value Retailers Dollar General Buy opportunistically Service Retailers High future growth potential o 3 Developing a retail strategy Coordination to implement the 4P s Production o Private labels help distinguish between competition o Exclusive brands Price must be aligned with strategy Promotion increased by technology Place location o Benefits of Stores Browsing touching and feeling personal service cash and credit payment entertainment and social experience immediate gratification risk reduction o Benefits of internet and multichannel retailing Deeper and broader selection personalization service ex Amazon gain insight into consumers shopping behavior increase customer satisfaction and loyalty cannibalism expand market presence o 4 Managing a multichannel strategy Involves selling in more than one channel Examining the circumstances in which sellers may prefer to adopt a particular strategy How to determine how much integration Integrated CRM all interaction records Brand Image needs to be consistent Pricing may be consistent or not Supply chain unique skills needed for each channel o There are many operational differences Chapter 14 Price Intro Groupon Considerations for setting price strategies o Cost Based Methods Determine the final price to charge by starting with the cost Cost plus pricing Prices are set on basis of estimate of average costs o Competitor Based Methods Sets prices to reflect the way they want consumers to interpret own prices relative to the competitors Can lead to price wars gaining market share but losing profits o Value Based Methods focus on the overall value as perceived by the consumer 2 Key approaches Improvement Value method represents an estimate of how much more or less consumers are willing to pay for a product relative to other comparable products Cost of Ownership Method setting price for its useful life lightbulb Implementing Value Based Pricing methods Need lots of research account for changes etc Pricing Strategies long term approach to setting prices broadly in an integrative effort based on 5 C s Company objective costs customers competition and channel members o Everyday Low Pricing EDLP Between the regular non sale price and the deep discount prices Suggest that on average prices are lower Odd prices numbers that end in an odd number Can suggest lower quality o High Low Pricing promotion of sales to encourage purchase Attracts both price sensitive and non price sensitive Reference Price see how much you saved o Both are influenced by price quality relationships Depends on willingness of consumer to put in time and their perception of quality Price lining when marketers establish a price floor and a price ceiling for an entire line of similar products and then a few other price points between New Product Pricing Strategies o Market Penetration Strategy set the initial price low to build sales market share and profits Experience curve effect as sales grow costs fall and prices drop more Cons must be able to satisfy rapid rise in demand low price does not signal quality might leave money on the table o Price skimming pay a premium to have the innovation first Signal quality test price sensitivity Tradeoff between earning a higher price and suffering higher production costs Have to lower the price as demand lowers Pricing Tactics short term methods to focus on select components of the 5 C s o Aimed at consumers Markdowns get rid of slow moving or obsolete Quantity Discounts size discount as you buy bigger it is cheaper per oz Seasonal Discounts off peak Coupons do little to increase loyalty Rebates low actual use Leasing do not have to make big decision but still enjoy the experience Price Bundling Leader Pricing lower a commonly purchased item and they will buy others o Business Pricing Tactics Seasonal Discounts buy out of season Cash Discounts early payment Vendor Allowances Advertising lower price in exchange for promotion Slotting pay for better shelf space Quantity Discounts the more you buy they cheaper Cumulative over time enforces
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