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76 Cards in this Set
- Front
- Back
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Independent retailer |
one or a very few units under the same ownership, 10 or fewer outlets |
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Chain Store |
Multiple units under the same ownership Ex: Publix |
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Franchise Product And trade name franchising Business format franchising |
Independent owner-operator licensed by larger support organizations Ex: subway Contractual vertical marketing arrangement Recognized name + expertise |
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Major types of retail operations |
Department store Specialty store Supermarket Scrambled merchandising Drug Store Convenience store Discount store |
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Department store |
large store organized into many separate departments Ex: Dillards |
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Specialty store |
single-limited lines/High margin/high service Ex: Footlocker |
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Supermarket
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Large departmentalized self-serve retailer that specializes in food and some non-food items Ex: Publix, Windixie |
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Scrambled merchandising |
offering non-traditional goods such as cards/gadgets, high margin for convenience |
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Drug store |
Pharmacy-related items +++ Ex: Walgreens |
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Convenience store |
Limited lines/High margin/High turnover Ex: circle K |
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Full-line discount store aka Mass merchandiser |
Moderate to low prices/less atmosphere and service than department store/high volume and turnover Ex: Walmart, Kmart |
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Category superstore aka Specialty discount store |
Single to very limited lines/low prices/High turnover/More-or-less self service (often-called category killers) Ex: Best buy, sports authority, Toy r us |
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Warehouse membership club |
limited assortment/in bulk to members only Ex: Sams |
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Off-price retailer |
Buy up manufacturers' overruns and unsold merchandise Ex: Big lots |
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Factory outlet store |
Vertically-integrated off-price retailer |
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Nonstore retailing |
Automatic vending Direct retailing Direct marketing Retailing mix |
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Automatic vending |
ever see a Pepsi Machine? |
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Direct retailing |
face-to-face with the customer, door to door |
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Direct marketing |
no intermediaries (E-tailers/Direct mail-catalogues/Telemarketing (fitness videos, soloflex machine), Shop-at-home networks/infomercials) |
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Retailing Mix |
The 4 P's + presentation/Personnel Product and Promo |
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Franchising |
Product and trade name Ex: GM Business Format Ex: Subway, H and R block |
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Pricing Objectives |
Profit maximization Sales oriented Market Share Sales Maximization Status quo
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Profit Maximization |
total revenue as large as possible relative to total costs Ex: Motel, Hotel: price and fullness |
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Sales Oriented Market Share Sales Maximization |
gain trial, establish distribution and dominant position, penetration pricing
Need to raise cash or clear out volume |
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Status quo Maintain existing prices aka satisfactory profits Meet competitors' prices aka follow-the-leader pricing |
Ex: must have product, not raise the price that high |
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Steps to setting the price |
Step 1: Establish pricing goals Step 2: Estimate sales/profits at different prices Step 3: Choose a pricing strategy
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Establish pricing goals, step 1 |
better stated, establish marketing goals, trade offs between short and long term |
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Estimate sales/profits at different prices, step 2
Break-even analysis |
How many units must you sell at a given price to recover fixed costs Double-check ROI at different prices: Are you better off buying treasuries? |
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Choose a pricing strategy, step 3 Price Skimming (Profit maximization strategy)
Penetration pricing (Sales maximization strategy) |
Come in with high initial price, lowering it when/if competition enters
Come in with low initial price to match or pre-empt competition, discouraging competition from entering the market place at all |
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Legality and Ethics |
Unfair trade practices Price fixing Price discrimination
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Unfair trade practices |
set floor on overall prices. Generally ignored unless you practice predatory pricing ( specifically attempting to drive competition out of business |
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Price fixing |
2 or more firms conspire to set prices, usual small companies combine |
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Price discrimination |
charging different prices for the same item to different customers Ex: rolling promotion, performance, ways to get around this |
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Geographic pricing |
FOB (free on board) FOB Origin Uniform delivered pricing Zone pricing Basing point pricing |
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FOB (Free on board) |
point at which title passes |
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FOB Origin
FOB Origin pricing |
Title passes at seller's dock
buyer pays for transportation |
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Uniform delivered pricing aka Freight absorption pricing |
same price for everyone everywhere |
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Zone pricing |
break nation/world into manageable number of areas and charge different delievered price by are |
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Basing point pricing |
select one or more points as bases and charge shipping from there, irregardless of where actually shipped from |
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Other pricing tactics |
Captive pricing Leader pricing aka loss leader pricing Bait pricing aka bait and switch Price bundling |
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Captive pricing |
give you something or sell you something super cheap and make money selling component parts Ex: paper towels |
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Leader pricing aka loss leader pricing |
Product priced below cost as traffic builder |
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Bait pricing aka Bait and Switch |
Lure you in with something they don't really have Ex: Motel that say they have super cheap rooms but only have 4 available rooms for that price
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Price bundling |
package machine items together so you have to buy them all Ex: TV channels come in a bundle |
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Advertising/Publicity/PR |
Advertising and the PLC Major types of advertising Creative decision in advertising Major advertising Media |
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Advertising and the PLC(product life cycle) |
Intro stage Growth stage Maturity to early decline |
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Intro stage |
high levels of advertising to gain awareness/trial
Inform= Primary demand= Pioneering advertising if you are first in the category Persuade = secondary demand = competitive if not |
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Growth stage |
fighting it out for market share (Persuade) by my brand |
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Maturity to Early decline Remind
Divest |
if you are a master brand or have a cash cow (core group of loyal users) Kodak-take pictures
when the cash cow becomes a dawg |
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Major types of advertising |
Institutional advertising Product advertising Direct-action advertising Indirect-action advertising Comparative advertising |
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Institutional advertising |
promotes a company image, a product class, or advocates a position Ex: got milk |
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Product advertising Direct-action advertising
Indirect-action advertising
Comparative advertising |
promotes a specific product/service
seeks immediate action Ex: 1800 number
builds image/positioning/long-term awareness/loyalty Ex: whats up commericail
Us vs Them
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Creative decisions in advertising |
first thing to do in developing an ad campaign: determine campaign objectives |
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DAGMAR (defining advertising goals for measured advertising results)
Advertising appeal aka Unique selling proposition aka commercial positioning concept (CPC) |
Phase that ties directly to your positioning/differential advantage Ex: less feeling taste great, miller light Don't leave home w/o it, american express |
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Major advertising media |
to reach a wide, diverse audience: Network TV/Magazines such as Times-Newsweek-People For a more narrow, specialized audience: specialty cable channels such as gold network/magaziness such as american rifleman-fitness Customers must find you when doing a google search Product placements as an alternative to traditional media, James Bond on BMW, gatorade on TV, aflak duck |
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Factors in influencing the promo mix |
type of product nature of target market funds available PLC
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Sales promo/personal selling |
Tools for consumer sales promotions Tools fro trade sales promotion
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Objective |
Create a short-term incentive to buy
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Consumer sales Promo |
ultimate consumer |
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Trade sales Promo |
channel members |
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Tools for consumer sales promotions |
Coupons Rebates Premiums Self-liquidating premium Contests Sweepstakes Loyalty marketing programs/frequently buyer programs Sampling |
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Coupons |
price reduction at time of purchase in retail outlets |
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Rebates |
Direct from manufacturer Ex: Pepsi, $10 super bowl rebate |
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Premiums |
A freebie thrown in when you buy something else |
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Self-liquidating premium |
costs fully factored into promo deal, and premium item can stand alone choose rather or not you want the premium item |
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Contests |
must complete some task to win Ex: bakeoff |
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Sweepstakes |
random chance |
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Loyalty marketing programs/frequent buyer programs |
long-term objectives Ex: Motels, restaurants |
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Sampling |
lets prospect try product risk-free, in-store/by mail/elsewhere Ex: sampling in liquor stores |
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Tools for trade sales promotions |
Point-of-purchase materials/display equipment Trade allowances Push money Conventions/trade shows Push strategy Pull strategy
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Point-of-purchase (POP) materials/displayed equipment |
2x sales, especially important for discretionary impulse products |
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Trade allowances
Non-discretionary items
Discretionary items |
price reduction/rebate/free merchandise for performance of some kind
traffic builder Ex: dogfood, salad dressing, toilet paper
"Plus" business, people don't have to have it
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Push money |
financial incentives to inside salespeople in retail outlets
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Conventions/trade shows |
industry get-together for B2B meeting and schmoozing, general public not invited |
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Push strategy |
Promo $ directed toward channel members, must do this if your product is undifferentiated/you are not a category leader Taking the product to the customer |
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Pull strategy |
Promo $ directed toward ultimate consumer, May do this if you product has a competitive advantage/you are a category leader Ex: Heins, Proctor and gamble, Getting the customer to come to you |
