BUAD301 Lecture Notes Test 3 Chapter 12 Retailers Wholesalers and Their Strategy Planning Retailers and wholesalers plan their own strategies Must select target markets and marketing mixes carefully Marketers must understand retailer wholesaler evolution Retailing deals with final customers Planning a retailer s strategy Key features affecting consumer s retail choice o Convenience o Product selection Wawa vs supermarket o Fairness in dealings o Helpful information o Prices Vending machines are convenient Shop at how in a variety of ways Why retailers evolve and change Scrambled merchandising higher profits The wheel of retailing keeps on rolling Product life cycle applies to retailing Differences of retailing in different nations New ideas spread Mass marketing requires mass markets Must adapt marketing strategy Online retailing varies What is a wholesaler Changing with the times Producing value and profits not chasing orders Working more closely with retailers than in previous years Progressive wholesalers adapt Goodbye to some Wholesalers add value in different ways Merchant wholesalers buy from producer own it o 85 of establishments o 64 of sales Agent wholesalers don t own product o 10 of establishments o 10 of sales Manufacturer sales branches o 5 of establishments o 26 of sales Types of wholesalers Does wholesaler own product o Yes merchant wholesaler o No agent wholesaler Agent wholesalers o Auction companies o Brokers o Manufacturers agents o Selling agents o Makes money through commissions Promotion Publicity Advertising Personal selling Sales promotion Sales Promotion tries to spark immediate interest Aimed at customers or users o Contests o Coupons 1 form o Aisle displays o Samples Chapter 13 Promotion Introduction to Integrated Marketing Communications Which method to use depends on promotion objectives Informing Burger King advertising healthier fries Persuading reader board outside McDonalds BOGO act now Reminding email reminder of business Interactive Exercise AIDA Attention Interest Desire Action The traditional communication process Source receiver perfect world Source encoding message channel decoding receiver Noise distraction impeding factor Everyone decodes differently If 50 understand message its good Encoding and decoding depend on a common frame of reference Integrated direct response promotion is very targeted More than direct mail junk mail Target directly with a database limit people who get mail Setting the promotion budget Percentage of sales more popular not necessarily better way easier Task method takes longer more accurate Pushing the channel focuses promotion at intermediaries Producer coke Wholesaler 100k cases month 2 case retailers Acme 7k cases month 1 case You Pulling in channel focuses promotion at Customers Produce Wholesaler Retailer You Ads and coupons Adoption process can guide promotion planning Innovators Chapter 15 Advertising Publicity Advertising Spending as Sales for Procedures Early adopters Early majority Late majority Laggards nonadapters Gas 1 Candy 4 Perfume 20 Retail Ad Spending Grocery 8 Furniture 8 Setting Ad Objectives is a strategy decision Position brands Introduce new product Objectives determine the kinds of advertising to use Types of advertising o Product advertising used much more frequently specials and deals o Institutional advertising Competitive advertising emphasizes selective demand Institutional Advertising Remember our name Connects divisions of a company Sheds favorable light Choosing the best medium how to deliver the message Promotion objectives Target market characteristics best way to reach them Funds available Planning the best message what to communicate AIDA Advertising agencies do the work Omnicon WPP Interpublic Measuring advertising effectiveness is not easy Consider the total mix Research and testing may improve odds Hindsight may lead to foresight How to avoid unfair false advertising FTC controls false practices Different types of publicity Getting attention and holding interest Developing a desired position Chapter 16 Pricing Objective and Policies Price has many strategy dimensions Price flexibility Price levels over product life cycle Discounts and allowances to whom and when Transportation costs who pays and how Price exchanged for something of value view of customer or user List Price Less discounts quantity seasonal cash Exchanged for products physical good or service Objectives should guide strategy planning for price Pricing objective o Profit oriented Target return Maximize profits o Sales oriented Dollar or unit sales growth Growth in market share o Status quo oriented Meet competition Nonprice competition Most firms set specific pricing policies to reach objectives One price policy the same for everyone Flexible price policy different customers different prices databases make it easier Skimming vs Penetration Skimming tries to sell at high price before aiming at more price sensitive consumer Penetration firm tries to sell the whole market at one low price Some customers get something extra List price may depend on geographic pricing policies Common geographic policies o Zone o Uniform delivered flat rate shipping Pricing policies combine to impact customer value Look at customer s viewpoint Value pricing customer value Legality of pricing policies Dumping Phony list prices Price discrimination Robinson Patman Act protects this