Berman_ch_06 (1)
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Transcript of Berman_ch_06 (1)
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Chapter ObjectiveszTo contrast single-channel and multi-
channel retailing
zTo look at the characteristics of thethree major retail institutions involvedwith nonstore-based strategy mixes:direct marketing, direct selling, and
vending machines with an emphasison direct marketing
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Chapter Objectives_2zTo explore the emergence of electronic
retailing through the World Wide Web
zTo discuss two other nontraditionalforms of retailing: video kiosks andairport retailing
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Figure 6.1 Approaches to
Retailing Channels
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Figure 6.2 Home Depot
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Nontraditional Retailing Nontraditional retailing also
includes formats that do not fit into
the store and non-store basedcategories:
Video kiosks
Airport retailing
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Direct Marketing Customer is first exposed to a good or
service through a nonpersonal medium
and then orders by mail, phone, fax, orcomputer
Annual U.S. sales exceed $235 billion
Other leading countries include
* Japan* Germany
* Great Britain
*France*Italy
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Characteristics of Direct
Marketing Customers
Married
Upper middle class
36-50 years old
Desiresconvenience,
uniquemerchandise, goodprices
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Direct Marketing CategoriesGENERAL
offer full lines ofproducts from clothingto housewares
J.C. Penney QVC
SPECIALTY
offer narrow productlines
L.L. Bean Franklin Mint
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Figure 6.3 Micro Warehouse
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Strategic Business Advantages
of Direct Marketing
Reduced costs
Lower prices
Large geographic coverage
Convenient to customers
Ability to pinpoint customer segments
Ability to eliminate sales tax for some Ability to supplement regular business
without additional outlets
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Strategic Business Limitations
of Direct Marketing Products cannot be examined prior to
purchase
Costs may be underestimated Response rates to catalogs under 10%
Clutter exists
Long lead time required
Industry reputation sometimes negative
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Database Retailing Collection, storage, and usage of
relevant customer information
* name* address
* background
*shopping interests
* purchase behavior
Observation of 80-20 rule
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Emerging Trends Evolving activities
Changing customer lifestyles
Increasing competition
Increasing usage of dual distributionchannels
Changing media roles, technologicaladvances, and global penetration
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Selection Factors Company reputation and image
Ability to shop whenever consumer wants
Types of goods and services Availability of toll-free phone number or Web site
for ordering
Credit card acceptance
Speed of promised delivery time Competitive prices
Satisfaction with past purchases and good returnpolicy
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TV Retailing
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Figure 6.4 Executing a Direct
Marketing Strategy
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Media Selection Printed catalogs
Direct-mail ads and
brochures Inserts with monthly
credit card and otherbills (statementstuffers)
Freestandingdisplays
Ads or programs inmass media
Banner ads or hotlinks on the Web
Video kiosks
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Table 6.1 Snapshot of
U.S. Direct Selling IndustryMajor Product Groups % of Industry
Home/ family care products 33.7
Personal care products 26.4
Services 16.9
Wellness products
16.5Leisure/ educationalproducts
6.5
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Table 6.1 Snapshot of
U.S. Direct Selling IndustryPlace of Sales % of Industry
In the home 64.4
Over the phone 14.7
In a workplace 8.7
Over the Internet
5.5Other 6.7
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Figure 6.5 Direct Selling
and Mary Kay
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The Role of the Web Project a retail presence
Enhance image
Generate sales
Reach geographically-dispersedcustomers
Provide information to customers Promote new products
Demonstrate new product benefits
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The Role of the Web_2 Provide customer service (e.g., e-mail)
Be more personal with consumers
Conduct a retail business efficiently
Obtain customer feedback
Promote special offers
Describe employment opportunities Present information to potential
investors, franchisees, and the media
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Figure 6.8 Five Stages of Developing
a Retail Web Presence
1. Brochure Web Site
2. Commerce Web Site
3. Integrated Web Site
4. The Webified Store
5. Site Integrated withManufacturer Systems
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Reasons
Using the Web
information
entertainment interactive
communications
Shopping Online
selection
prices convenience
fun
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Reasons NOT to Shop OnlineTrust
Fear
Lack of security
Lack of personal communication
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Recommendations for
Web Retailers Develop or exploit a well-known,
trustworthy retailer name
Tailor the product assortment for Webshoppers
Enable the shopper to click as little aspossible
Provide a solid search engine
Use customer information
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Figure 6.12 Borders
Title Sleuth Video Kiosk
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Features of Airport Retailing Large group of prospective shoppers
Captive audience
Strong sales per square foot of retailspace
Strong sales of gift and travel items
Difficulty in replenishment Longer operating hours
Duty-free shopping possible
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Figure 6.13 Airport Retailing
and Waldenbooks