Chapter 16 Retailing and Multichannel Marketing o Retailing the set of business activities that add value to products and services sold to consumers for their personal or family use o Multichannel strategy sell in more than one channel o Choosing Retailing Partners Channel structure Customer expectations Channel Member characteristics Distribution intensity number of channel members to use at each level of the marketing channel Intensive distribution designed to get products into as many outlets as possible Exclusive distribution grating exclusive geographic territories to one or very few retail customers so no other customers in the territory can sell a particular brand Selective distribution uses a few selected customers in a territory Helps a seller maintain a particular image and control the flow of merchandise into an area so many shopping goods manufacturers use it o Identify types of Retailer Food retailers Supermarkets o Conventional supermarket self service food store offering groceries meat and produce with limited sales of nonfood items 30000 SKUs o Limited assortment supermarkets or extreme value food retailers only 2000 SKUs Supercenters fastest growing retail category large stores that combine supermarket with a full line discount store Warehouse clubs large retailers that offer a limited and irregular assortment of food and general merchandise with little service at low prices for ultimate consumers and small businesses Convenience stores limited variety and assortment of merchandise at a convenient location in 2 000 to 3 000 square foot stores with speedy checkout Modern version of the neighborhood mom and pop grocery general store General Merchandise Retailers Department stores retailers that carry a broad variety and deep assortment offer customer services and organize their stores into distinct departments for displaying merchandise Full0line discount stores retailers that offer a broad variety of merchandise limited service and low prices Specialty stores concentrate on a limited number of complementary merchandise categories and provide a high level of service in relatively small stores Tailor their retail strategy toward very specific market segments by offering deep but narrow assortments and sales associate expertise Drugstores specialty stores that concentrate on pharmaceuticals and health and personal grooming merchandise Pharmaceuticals often represent more than 50 percent of drugstore sales and an even greater percentage of their profits Category specialists or big box retailers or category killers discount stores that offer a narrow but deep assortment of merchandise Self service approach is often used o Home improvement center 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 Off0price retailers inconsistent assortment of brand name merchandise at low prices o Irregulars merchandise that has minor mistakes in construction o Factory Outlets Outlet stores off price retailers owned by manufacturers or department look to improve revenues on irregulars and overstocks Facilitating Retail Strategy Product selection Price value Promotion advertising o Co op cooperative advertising manufacturer and retailer working together helps defray the costs of advertising b paying all or a portion of the advertising s production and media costs o Share of wallet the percentage of the customer s purchases made from that particular retailer with their best customers Place convenience Exploring Multiple Channel Options Channels for selling to Consumers Store Channel o Browsing o Touching and feeling products o Personal service o Cash and credit payment o Entertainment and social experience o Immediate gratification o Risk reduction Catalog Channel o Convenience o Information o Safety Internet Channel o Broader selection o More information to Value Merchandise o Personalization Personalized Customer Service Virtual communities networks of people who seek information products and services and communicate with one another about specific issues also help customers solve problems by providing information not readily available through other channels Social shoppers seek not just information for future use but also an enhanced emotional connection with other participants during the shopping experience Online chat provides customers with the opportunity to click a button at any time and have an instant messaging email or voice conversation with a customer service representative Personalized offering Cookie small computer program that provides identifying information installed on hard drive Selling Merchandise with touch and feel attributes Role of Brands Using Technology o Conversion rates percentage of consumers who buy the product after viewing it Gifts Services Using the internet to improve multichannel shopping experience Perceived Risks in Electronic Shopping o Evolution toward multichannel marketing Multichannel retailers retailers that use some combo of stores catalogs and the internet to sell merchandise for four reasons First electronic channel gives them an opportunity to overcome the limitations of their primary existing format Second by using an electronic channel they can expand their market reach Third providing a multichannel offering builds share of wallet Fourth an electronic channel enables firms to gain valuable insights into their customers shopping behavior Expanding Market Presence Increasing Share of Wallet Overcoming the limitations of an existing format Gaining Insights into Customers Shopping Behaviors Will Manufacturers by pass Retailers and sell directly to consumers Disintermediation when a manufacturer sells directly to consumers bypassing retailers
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