1 2 Learning Objectives What are the issues manufacturers consider when choosing retail partners? What types of retailers are available for distributing products? How do manufacturers and retailers work together to develop a strategy? Why is multichannel marketing becoming such a prevalent channel strategy? These are the learning objectives for this chapter. 3 Apple Store What makes the Apple store so successful? 4 Factors for Establishing a Relationship with Retailers 5 Choosing Retail Partners Channel Structure 6 Choosing Retail Partners Customer Expectations 7 Choosing Retail Partners Distribution Intensity 8 Limited Distribution Why might Birkenstock choose a limited distribution intensity? Birkenstock’s can only be purchased through certain retailers – this helps control conflict between retailers and gives the manufacturer better control. Some might argue that for products is the later stages of the product life cycle, it implies higher quality to the end consumer. 9 Check Yourself What issues should manufacturers consider when choosing retail partners? What is the difference between intensive, exclusive, and selective levels of distribution intensity? When choosing retail partners, manufacturers must look at the basic channel structure, where their target customers expect to find the products, channel member characteristics, and distribution intensity. An intensive distribution strategy is designed to get products into as many outlets as possible. Exclusive distribution policy grants 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. 10 Retailer’s Reaction? How do you expect retailers would respond to this? These kinds of grass roots movements are very difficult for retailers. They rarely get a strong enough following to threaten retailers overall sales even if they slow down a particular day of sales. 11 Types of Retailers This slide can be used as an introduction to a detailed discussion of this topic or as a shortened version. 12 Food Retailers Supermarket Supercenter Warehouse Club Convenience 13 General Merchandise Retailers 14 GNC Private Brands GNC sells many brands including its own products – private brands. 15 Check Yourself What are the different types of food retailers? What differences mark their strategies? What are the different types of general merchandise retailers? What differences mark their strategies? Food retailers include: Supermarkets : a self service food store offering groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise. Supercenters: the fastest growing retail category, are large stores (150,000–220,000 square feet) that combine a supermarket with a full-line discount Store.. By offering broad assortments of grocery and general merchandise products under one roof, supercenters provide a one-stop shopping experience. Warehouse Clubs: large retailers (at least 100,000–150,000 square feet) 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: provide a limited variety and assortment of merchandise at a convenient location in 2,000–3,000 square foot stores with speedy checkout.. Milk, eggs, and bread once represented the majority of their sales, but now the majority of sales comes from gasoline and cigarettes. General merchandisers include: Department Stores: carry a broad variety and deep assortment, offer customer services, and organize their stores into distinct departments for displaying merchandise. Full-Line Discount Stores :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. Specialty 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. Category Specialists: discount stores that offer a narrow but deep assortment of merchandise. Extreme Value Retailers: small, full-line discount stores that offer a limited merchandise assortment at very low prices. Off-Price Retailers: offer an inconsistent assortment of brand name merchandise at low prices. 16 Facilitating Retail Strategy Using the Four P’s: Product 17 Build-a-Bear Workshop Commercial 18 Promotion Discuss how promotions affect consumers’ perceptions of value, patronage intentions, purchase, loyalty, and share of wallet devoted to a particular retailer, both individually and in combination. Group activity continued: Tell the students they have a fixed amount to spend on promotion, including personal selling. How would they divide up their promotional dollar? Justify their recommendation. Retailers use a wide variety of promotions, both within their retail environment and through mass media 19 Convenience is a key ingredient to success 20 Exploring Multiple Channel Options: Benefits of Different Channels 21 Internet Channel Broader Selection Global More information Virtual communities Personalization Customer service Personalized offerings Touch and Feel Brands Technology Gifts Services Shopping over the Internet provides the convenience offered by catalogs and other nonstory formats. However, the Internet, compared with store and catalog channels, also has the potential to offer a greater selection of products and more personalized information about products and services in a relatively short amount of time. It also offers sellers the unique opportunity to collect information about how consumers shop—information that they can use to improve the shopping experience across all channels. 22 How does the Internet Improve Multichannel Shopping? 23 Retailers can do more online… 24 Perceived Risk in Internet Shopping 25 Evolution toward Multichannel Marketing 26 Capabilities for Multichannel Retailing 27 Glossary Category specialists are discount stores that offer a narrow but deep assortment of merchandise. Return to slide 28 Glossary Convenience stores provide a limited variety and assortment of merchandise at a convenient location in 2,000-3,000 square foot stores with speedy checkout. Return to slide 29 Glossary A conventional supermarket is a self-service food store offering groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise. Return to slide 30 Glossary Department stores are retailers that carry a broad variety and deep assortment, offer customer services, and organize their stores into distinct departments for displaying merchandise. Return to slide 31 Glossary Disintermediation occurs when a manufacturer sells directly to consumers, bypassing retailers. Return to slide 32 Glossary Drugstores are specialty stores that concentrate on pharmaceuticals and health and personal grooming merchandise. Return to slide 33 Glossary An exclusive distribution policy is when manufacturers grant exclusive geographic territories to one or very few retail customers so no other customers in the territory can sell a particular brand. Return to slide 34 Glossary Extreme value retailers are small, full-line discount stores that offer a limited merchandise assortment at very low prices. Return to slide 35 Glossary Full-line discount stores are retailers that offer a broad variety of merchandise, limited service, and low prices. Return to slide 36 Glossary An intensive distribution strategy is designed to get products into as many outlets as possible. Return to slide 37 Glossary Multichannel retailers are retailers that use some combination of stores, catalogs, and the Internet to sell merchandise. Return to slide 38 Glossary Off-price retailers offer an inconsistent assortment of brand name merchandise at low prices. Return to slide 39 Glossary Selective distribution uses a few selected customers in a territory. Return to slide 40 Glossary Specialty stores concentrate on a limited number of complementary merchandise categories and provide a high level of service in relatively small stores. Return to slide 41 Glossary Supercenters are large stores that combine a supermarket with a full-line discount store. Return to slide 42 Glossary Warehouse clubs are 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. Return to slide |