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UM / Marketing / MKT 301 / marketers are particularly interested in postpurchase behavior because

marketers are particularly interested in postpurchase behavior because

marketers are particularly interested in postpurchase behavior because

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School: University of Miami
Department: Marketing
Course: Marketing
Professor: Howard marmostein
Term: Summer 2015
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Cost: 50
Name: Study Guide Exam 3 - Ch. 4,6,8,14,15,16,17
Description: Study guide with all relevant chapters on exam from power points and textbook.
Uploaded: 12/02/2016
44 Pages 327 Views 3 Unlocks
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- Are all the individuals who engage in questionable behavior just plain immoral or unethical?




- What makes people take actions that create so much harm?




Why people act unethically?



Marketing Exam 3 Chapter 4 Firm Goals - Greed and short term profit seeking  Serious long term consequences - Creating value over the long run  Long term success The Scope of Marketing Ethics - Business Ethics refers to the moral or ethical dilemmas that might  arise in a businesDon't forget about the age old question of a tank contains a mixture of helium neon and argon
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s setting - Marketing Ethics examines those ethical problems that are specific  to the domain of marketing Creating Ethical Climate in the Workplace Ethical Climate includes having a set of values that guides decision making and behavior - Values o Establish o Share  o Understand - Rules o Management commitment o Employee dedication - Controls o Reward o Punishment American Marketing Association Code of Ethics - Generally accepted code in marketing - Flows from general norms of conduct to specific values - Subareas within marketing have their own code of ethics to deal with  specific issues The Influence of Personal Ethics - Genetics - Family - Religion - Values Why people act unethically? - What makes people take actions that create so much harm? - Are all the individuals who engage in questionable behavior just plain  immoral or unethical? - Decisions often have conflicting outcomes, where both options have positive and negative consequences- To avoid such dire consequences, the short term goals of each  employee must be aligned with the long term goals of the firm Competing Outcomes Dangerous flaw in new model - Delay Production o Delayed revenue  Possible layoffs  Loss of bonuses - Continue Production o Potential injury to consumers  Loss of revenue Corporate Social Responsibility generally entails voluntary actions taken  by a company to address the ethical, social and environmental impacts of its  business operations and the concerns of its stakeholders - Being socially responsible generally means going above and beyond  the norms of corporate ethical behavior Framework for Ethical Decision Making 1. Identify Issues o Marketing research firm issues  Data collection methods  Hiding the real purpose of the study  Using results to mislead or even harm the public 2. Gather information and identify stakeholders o Identify all ethical issues and relevant legal information  Identify all relevant stakeholders and get their input on identified ethical  issues 3. Brainstorm and evaluate alternatives o Halt the market research project? o Make responses anonymous? o Instituting training of the AMA Code of Ethics for all researchers 4. Choose a course of actiono Weigh the alternatives  Take a course of action Integrating Ethics into Marketing Strategy 1. Planning Phase o The mission or vision statement sets the overall ethical tone for  planning. o Mission statements can be used as a means to guide a firm’s  SWOT analysis 2. Implementation Phase o Should the firm be targeting this market with this product? o Should the firm be selling its product in this market in this  manner? o Should the firm be relocating production to another country? 3. Control Phase o Check successful implementation  React to change Chapter 6 The Consumer Decision Process 1. Need recognition o The consumer decision process begins when consumers  recognize they have an unsatisfied need, and they would like to  go from their actual, needy state to a different, desired state o Functional needs pertain to the performance of a product or  service o Psychological needs pertain to the personal gratification  consumers associate with a product or service 2. Information search o Search for information about the various options that exist to  satisfy that needo Internal search for information, the buyer examines his or her  own memory and knowledge about the product or service,  gathered through past experiences o External search for information, the buyer seeks information  outside his or her personal knowledge base to help make the  buying decision- This might be talking with friends, family, or a  salesperson, internet o Three factors Factors affecting consumers’ search process  The perceived benefits versus perceived costs of search is it worth the time and effort to search for information  about a product or service?  The Locus of Control 1. Internal locus of control believe they have some  control over the outcomes of their actions, in which  case they generally engage in more search activities  = more search activities 2. External locus of control, consumers believe that fate or other external factors control all outcomes = less  search activities  Actual or perceived risk: There are five types of risk  associated with purchase decisions which can delay or  discourage a purchase  1. Performance risk involves the perceived danger  inherent in a poorly performing product or service  2. Financial risk is a risk associated with a monetary  outlay and includes the initial cost of the purchase,  as well as the costs of using the item or service  3. Social risk involves the fears that consumers suffer  when they worry others might not regard their  purchase positively  4. Physiological risk (safety risk) whereas performance  risk involves what might happen if a product does  not perform as expected, physiological risk refers to  the fear of an actual harm should the product not  perform properly  5. Psychological risk are those risks associated with the  way people will feel if the product or service does not convey the right image 3. Alternative evaluation o Sift through the choices available and evaluate the alternatives o Attribute Sets: Research has shown that a consumer’s mind  organizes and categorizes alternatives to aid his or her decision  process.   Universal sets include all possible choices for a product  category, but because it would be unwieldy for a person  to recall all possible alternatives for every purchase decision, marketers tend to focus on only a subset of  choices   Retrieval Sets (subset) which are those brands or stores  that can be readily brought forth from memory   Evoked set (another subset) which compromises the  alternative brands or stores that the consumer states he  or she would consider when making a purchase decision o Evaluate Criteria consist of important attributes about a  particular product. Consumers use several shortcuts to simplify  the potentially complicated decision process:   Determinant Criteria are product or service features that  are important to the buyer on which competing brands or  stores are perceived to differ- consumers look for  something special to differentiate one brand or store from another   Consumer decision rules are the set of criteria that  consumers use consciously or subconsciously to quickly  and efficiently select from among several alternatives.  These rules are typically either compensatory or  noncompensatory. 4. Purchase o After evaluating the alternatives, customers are ready to buy.  However, they don’t always patronize the store or purchase the  brand or item to which they had originally decided. It may not be available at the retail store for example. Retailers therefore turn  to the conversion rate to measure how well they have  converted purchase intentions into purchases.  o Increase conversion rate:  Reduce real or virtual abandoned carts  Merchandise in stock  Reduce the actual wait time 5. Post purchase o Marketers are particularly interested in post purchase behavior  because it entails actual rather than potential customers. There  are three possible postpurchase outcomes:   Customer Satisfaction: Dissatisfaction if the product fails  to achieve high performance expectations when setting  unrealistically high consumer expectations for the  product   Postpurchase cognitive dissonance is an internal conflict  that arises from an inconsistency between two beliefs or  between beliefs and behavior   Customer loyalty marketers attempt to solidify a loyal  relationship with their customers   Undesirable Consumer BehaviorInvolvement and Consumer  Buying Decisions Consumers make two types of buying decisions depending on their level of  involvement: extended problem solving or limited problem solving - Involvement is the consumer’s degree of interest in the product or  service Types of Buying Decisions - Extended Problem Solving when the customer perceives that the  purchase decisions entails a lot of risk. Occurs during a purchase  decision that calls for a lot of effort and time. - Limited Problem Solving occurs during a purchase decision that  calls for, at most, a moderate amount of effort and time o Impulse Buying is a buying decision made by customers on the spot when they see the merchandise o Habitual Decision Making describes a purchase decision  process in which consumers engage in little conscious effort Chapter 8 Assessing Global MarketsBecause different countries, with their different stages of globalization, offer  marketers a variety of opportunities, firms must assess the viability of  various potential market entries.  Examine 4 set of criteria necessary to assess a country’s market: 1. Economic Analysis using metrics o The greater the wealth of people in a country, generally, the  better the opportunity a firm will have in that particular country o Must look at 3 major factors  The general economic environment  GDP: defined as the market value of goods and services  produced by a country in a year  Gross national income: consists of GDP plus the net  income earned from investments abroad.  PPP: a theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in one  will cost the same in the other, if expressed in the same  currency  Human Development index  Market size and population growth rate  Real Income  Firms can make adjustments to an existing product or  change the price to meet the unique needs of a particular country market 2. Analyzing infrastructure and Technological Capabilities o Infrastructure is defined as the basic facilities, services, and  installations needed for a community or society to function  Transportation  Communication  Distribution Channel  Commerce 3. Analyzing Governmental Actions o Government actions can significantly influence firms’ ability to  sell goods and services because they often result in laws or other regulations that either promote the growth of the global market  or close off the country and inhabit growth  Tariff (duty) is a tax levied on good imported into a  country  Quota designates a minimum or maximum quantity of a  product that may be brought into a country during a  specified time period  Exchange control refers to the regulation of a country’s  currency exchange rate  Trade agreement is an intergovernmental agreement  designed to manage and promote trade activities for a  specified region, and a trading bloc consists of those countries that have signed the particular trade  agreement 4. Analyzing Sociocultural Factors o Culture   Power Distance is willingness to accept social inequality  as natural   Uncertainty avoidance the extent to which the society  relies on orderliness, consistency, structure, and  formalized procedures to address situations that arise in  daily life   Individualism perceived obligation to and dependence on  groups   Masculinity the extent to which dominant values are male oriented. A lower masculinity ranking indicates that men  and women are treated equally in all aspects of society; a higher masculinity ranking suggests that men dominate  in positions of power   Time orientation short verses long term orientation. A  country that tends to have a long term orientation values  long term commitments and is willing o accept a longer  time horizon for, say, the success of a new product  introduction   Indulgence the extent to which society allows for the  gratification of fun and enjoyment needs or else  suppresses and regulates such pursuits BRIC o Great potential for growth in the global community  Brazil  Russia  India   China Choosing a Global Entry Strategy Export has lowest risk, less control  Direct investment has most risk, and  most control 1. Export producing goods in one country and selling them in another 2. Franchising  3. Strategic Alliance refer to collaborative relationships between  independent firms, though the partnering firms do not create an  equity partnership; that is, they do not invest in one another 4. Joint Venture is formed when a firm entering a market pools its  resources with those of a local firm 5. Direct Investment requires a firm to maintain 100 percent  ownership of its plants, operation facilities, and offices in a foreign  country, often through the formation fo wholly owned subsidiaries Choosing a Global Marketing Strategy: Target Market (STP) ∙ Cultural nuances ∙ Subcultures ∙ View of product and consumer role ∙ Different positions ∙ Adaptation ∙ Single positioning strategy The Global Marketing Mix: Product or Service Strategies Sell the same product or service in both the home country market and host  country  Sell a product or service similar to that sold in home country  but include minor adaptions  Sell totally new products or services  Global Marketing Mix: Pricing Strategies Prices o Tariffs o Quotas o Antidumping policies o Economic conditions o Competitive factors Global Marketing Mix: Global Distribution Strategies ∙ Some global channels are very long and complex ∙ Consumers shop local small local stores ∙ Supplies must be creative in delivering to these outlets Global Marketing Mix: Global Communication Strategies ∙ Literacy levels vary by country ∙ Firms choose whether to adapt to language differences ∙ Cultural and religious differences also matter Chapter 14 The 5 C’s of Pricing: Successful pricing strategies are built around the five  critical components of pricing  ∙ Competition∙ Costs  o Variable costs: vary with product volume  o Fixed Costs: Unaffected by production volume  o Total Cost: Sum of variable and fixed costs o Break-even analysis enables managers to examine the  relationships among cost, price, revenue, and profit over  different levels of production and sales ∙ Company objectives:  The pricing of a company’s products and services should support and  allow the firm to reach its overall goals o Profit-oriented: focuses on target profit pricing, maximizing  profits, or target return pricing o Sales oriented: Firms set prices believe that increasing sales  will help the firm more than will increasing profits. o Competitor oriented: Strategize according to the premise that  they should measure themselves primarily against their  competitor.o Customer oriented: When a firm sets its pricing strategy  based on how it can add value to its products of services. ∙ Customers  o Demand curve shows how many units of a product or service  consumers will demand during a specific period of time at  different prices- Not all are downward sloping.  o Prestigious products or services have upward sloping curves.  Consumers purchase for their status rather than their  functionality. The higher the price, the greater the status  associated with it.  o Price Elasticity of Demand   Elastic = Price sensitive. In an elastic scenario,  relatively small changes in price will generate fairly  large changes in the quantity demanded, so if a firm  is trying to increase its sales, it can do so by lowering prices.   Inelastic = price insensitive. If a firm must raise  prices, it is helpful to do so with inelastic products or  services because in such a market, fewer customers  will stop buying or reduce their purchases.   Consumers are less sensitive to price increases for  necessities  Factors Influencing Price Elasticity of Demand:  Income effect is the change in the quantity of a product demanded by consumers due to a  change in their income  Substitution effect refers to consumers’ ability  to substitute other products for the focal brand  Cross price elasticity is the percentage change  in the quantity Product A demanded compared  with the percentage change in price in Product  B ∙ Channel members o Manufacturers, wholesalers and retailers can have different  perspectives on pricing strategies o Manufactures must protect against gray market transactions Chapter 15 Pricing Strategies ∙ Cost based pricing methods determine the final price to charge by  starting with the cost. Relevant costs and a profit are added. Then this  total amount is divided by the total demand to arrive at a cost plus  price.o Cost based methods do not recognize the role that consumers or competitors’ price play in the marketplace o All costs calculated on a per unit bases o Assumes costs don’t vary for different levels of production ∙ Competition Based methods they may set their prices to reflect the  way they want consumers to interpret their own prices, relative to  competitors’ offerings o Premium Pricing ∙ Value Based methods include approaches to setting prices tat focus  on the overall value of the product offering as perceived by the  consumer. Consumers determine value by comparing the benefits they expect the product to deliver with the sacrifice they will need to make  to acquire the product. o Consumers perceptions Pricing Strategies ∙ Everyday low pricing companies stress the continuity of their retail  prices at a level somewhere between the regular, nonsale price and  the deep-discount sale prices their competitors may offer. o By reducing consumers’ search cots, EDLP adds value;  consumers can spend less of their valuable time comparing  prices, including sale prices, at different stores ∙ High/Low Pricing relies on the promotion of sales, during which  prices are temporarily reduced to encourage purchases. o This strategy is appealing because it attracts two distinct  market segments: those who are not price sensitive and are  willing to pay the “high” price and more price sensitive  customers who wait for the “low” sale price o Using this strategy many communicate through use of  reference price, which is the price against which buyers  compare the actual selling price of the product and that  facilitates their evaluation process.   Internal reference price  External reference price Everyday low pricing vs. High/Low Pricing - Create value in different ways - EDLP saves search costs of finding lowest overall prices - High/low provides the thrill of the chase for the lowest price New Product Pricing Strategies ∙ Market Penetration Pricing set the initial price low for the  introduction of the new product or service. Their objective is to build  sales, market share, and profits quickly. ∙ Price skimming is a strategy that occurs in many markets, and  particularly for new and innovative products or services, and involves  consumers being willing to pay a higher price to obtain the new  product or service. Pricing Tactics Aimed at Consumers - Mark downs are the reductions retailers take on the initial selling  price of the product or service. - Quantity Discounts  - Leader pricing is a tactic that attempts to build store traffic by  aggressively pricing and advertising a regularly purchased item, often  priced at or just above the stores cost.  - Season discounts - Coupons offer a discount on the price of specific items when they’re  purchased - Rebates provide another form of discounts for consumers off the final  selling price - Leasing consumers pay a fee to purchase the right to use a product  for a specific amount of time - Price Bundling selling more than one product for a single, lower price Business Pricing Tactics and Discounts - Seasonal discounts is an additional reduction offered as an incentive to retailers to order merchandise in advance of the normal buying  season - Cash discounts reduces the invoice cost if the buyer pays the invoice  prior to the end of the discount period.  encourages early payment,  they benefit from the time value of money - Vendor Allowances  o Advertising allowances offers a price reduction to channel  members if they agree to feature the manufacturer’s product  in their advertising and promotional efforts o Slotting allowances are fees paid to retailers to get new  products into sores or to gain more or better shelf space for  their products - Quantity discounts provides a reduced price according to the  amount purchased. The more the buyer purchases, the higher the  discount and, of the course, the greater value. - Uniform delivered vs. zone pricing  o Uniform delivered tactic the shipper charges one rate, no  matter where the buyer is located, which makes things very  simple for both the seller and the buyer o Zone Pricing sets different prices depending on geographical division of the delivery areasLegal Aspects and Ethics of Pricing - Deceptive or illegal price advertising - Predatory Pricing is when a firm sets a very low price for one or  more of its products with the intent to drive its competition out - Price fixing is the practice of colluding with other firms to control  prices. Price fixing might be either horizontal or vertical. o Horizontal price fixing occurs when competitors that  produce and sell competing products collude, or work  together, to control prices, effectively taking price out of the  decision process for consumers. o Vertical price fixing occurs when parties at different levels  of the same marketing channel collude to control the prices  passed on to consumers. - Price discrimination is when firms sell the same product to different  resellers at different prices Chapter 16 Supply Chain Management Supply chain management: is a  set of approaches and techniques  firms employ to integrate their  suppliers, manufacturers,  warehouses, stores, and  transportation intermediaries into  a seamless operation in which  merchandise is produced and  distributed in the right quantities,  to the right locations, and at the  right time, as well as to minimize  system wide costs while satisfying the service levels that their  customers require. Marketing Channels Add Value - Reduces number of transactions - Increase value for consumers - More efficient and effective Marketing Channel Management Affects Other Aspects of Marketing - Fulfilling delivery promises- Meeting customer expectations - Reliant on an efficient supply chain Designing Marketing Channels - Direct marketing channel is when there are no intermediaries  between the buyer and the seller - Indirect marketing channels is when there are one or more  intermediaries work with manufacturer to provide goods and services  to customers Types of Vertical Marketing Systems Vertical marketing system: a marketing channel in which the members  act as a unified system - Administered vertical marketing system: There is no common  ownership or contractual relationships, but the dominant channel  member controls or holds the balance of power - Contractual vertical marketing system Independent firms at  different levels of the marketing channel joining through contracts to  obtain economies of scale and coordination to reduce conflict  Franchising is the most common type of contractual vertical marketing  system - Corporate vertical marketing system the parent company has  complete control and can dictate the priorities and objectives of the  marketing channel because it owns multiple segments of the channel,  such as manufacturing plants, warehouse facilities, and retail outlets.  Power in marketing channel exists when one firm has the ability to dictate  the actions of another member at a different level of distribution.  - Reward - Coercive - Referent - Expertise - Information - LegitimateManaging Marketing Channels and Supply Chains Through Strategic  Relationships Strategic relationship: in which the marketing channel members are  committed to maintaining the relationship over the long term and investing  in opportunities that are mutually beneficial  Successful strategic relationships rely on:  - Mutual Trust holds a strategic relationship together  - Open Communication to share information, develop sales forecasts  together, and coordinate deliveries. Honest communication is key to  developing successful relationships because supply chain members  need to understand what is driving each other’s business, their roles in the relationship, each firm’s strategies, and any problems that arise  over the course of the relationship.  - Common Goals Supply chain members must have common goals for a  successful relationship to develop. It is an incentive to pool their  strengths and abilities to exploit potential opportunities together.   - Interdependence When supply chain members view their goals and  ultimate success as intricately linked, they develop deeper long term  relationships.   - Credible Commitments It is what forms the relationship, the  commitment to be together Making Information Flow through Marketing Channels Information flows from the customer to stores, to and from distribution  centers, possibly to and from wholesalers, to and from product  manufacturer, and then on to the producers of any components and the  suppliers of raw materials.  Flow 1 (Customer to Store): The sales associate scans the UPC tag on the packaging, and the customer receives a receipt. The UPS tag contains all the  information about the product.Flow 2 (Store to Buyer): The point of sale terminal records the purchase  information and electronically sends it to the buyer at the store’s corporate  office. The sales information is incorporated into and inventory management  system and used to monitor and analyze sales and decide to recorder more  of the product, change price, plan or promote.  Flow 3 (Buyer to Manufacturer): The purchase information from each of  the stores is typically aggregated by the retailer as a whole, which creates an order for new merchandise and sends it to the manufacturer.  Flow 4 (Store to Manufacturer): In some situation, the sales transaction  data are sent directly from the store to the manufacturer, and the  manufacturer decides when to ship more merchandise to the distribution  centers and the stores. Flow 5 (Store to Distribution center): Stores also communicate with the  distribution center to coordinate deliveries and check inventory status.  Manufacturers can ship merchandise either directly to a store or to a  distribution center, where it is then shipped to the store.  Flow 6 (Manufacturer to Distribution Center and Buyer): When the  manufacturer ships the product to the store distribution center, it sends and  advanced shipping notice to the distribution center. An advanced shipping  notice is an electronic document that the supplies sends the retailer in  advance of a shipment to tell the retailer exactly what to expect in the  shipment.  Data Warehouse  Electronic Data Interchange is the computer to computer exchange of  business documents from a retailer to a vendor and back. Vendors can  transmit information about on hand inventory status, vendor promotions,  and cost changes to the retailer, as well as information about purchase order changes, order status, retail prices, and transportation routings.  - It enables channel members to communicate more quickly and with  fewer errors than in the past, ensuring the merchandise moves from  vendors to retailers more quickly. - Cycle time - Easily analyzed and used - Quality of communications Vendor- Managed Inventory is an approach for improving marketing  channel efficiency in which the manufacturer is responsible for maintaining  the retailer’s inventory levels in each of its stores. In ideal conditions, the  manufacturer replenishes inventories in quantities that meet the retailer’s  immediate demand, reducing stock outs with minimal inventory.  Making Merchandise Flow Through Marketing Channels Making merchandise flow involves first deciding whether the merchandise  will go from the manufacturer to the retailer’s distribution center or directly  on to stores. Once in distribution center, multiple activities take place before  it is shipped onto a store. The ultimate decision is usually up to the retailer  and depends on the characteristics of the merchandise and the nature of  demand.  Advantages of Distribution centers - More accurate sales forecasts are possible when retailers combine  forecasts for many stores serviced by one distribution center rather  than doing a forecast for each store. - Distribution centers enable the retailer to carry less merchandise in the individual stores, which results in lower inventory investments system  wide. - It is easier to avoid running out of stock or having too much stock in  any particular store because merchandise is ordered from the  distribution center as needed. - Retail store space is typically much more expensive than space at a  distribution center, and distribution centers are better quipped than  stores to prepare merchandise for sale The Distribution Center performs the following activities - Management and inbound transportation o Coordinating the physical flow of merchandise to stores - Receiving and checking using UPC and RFID o Receiving is the process of recording the receipt of  merchandise at it arrives at a distribution center o Checking is the process of going through the goods upon  receipt to make sure they arrived undamaged and that  merchandise ordered was the merchandise received. - Storing and Cross-Docking o Merchandise cartons that are cross-docked are prepackaged  by the vendor for a specific store.  - Getting Merchandise Floor Readyo Floor ready merchandise is merchandise that is ready to be placed on the selling floor o Ticketing and marketing refers to affixing price and  identification labels to the merchandise - Preparing to ship - Shipping to store Inventory Management Through Just-In-Time Systems - Just-in-time (JIT)/ Quick response (QR) in retailing, are inventory  management systems that deliver less merchandise on a more  frequent basis than traditional inventory systems. The firm gets  merchandise just in time for it to be used in the manufacture of  another product or for sale when the customer wants it.  - Advantages: reduced lead time (the amount of time between the  recognition that an order needs to be placed and the arrival of the  needed merchandise at the seller’s store and is available for sale),  increased product availability, and lower inventory investment. Chapter 17  Factors for Establishing a Relationship with Retailers 1. Choosing retailing partners i. Channel Structure  Degree of vertical integration: is the degree to which  the manufacturer has a strong brand or is otherwise  desirable in the market; and the relative power of the manufacturer and retailer   Manufacturers brand   Power of manufacturer and retailer ii. Customer Expectations  Retailers should also know customer preferences  regarding manufacturers. Manufacturers, in contrast,  need to know where their target market customers  expect to find their products and those of their  competitors. iii. Channel Member Characteristics  Larger firms  Less likely to use supply chain  intermediaries & can gain more control, be more  efficient, and save money iv. Distribution Intensity   Intensive designed to place products in as many  outlets as possible   Exclusive granting exclusive geographic geographic  territories to one or very few retail customers so no  other retailers in the territory can sell a particular  brand.  Selective relies on a few selected retail customers in  a territory to sell products 2. Identifying types of Retailers Manufacturers need to understand the general characteristics of  different types of retailers to determine the best channels for their  product.  Food retailers: General merchandise retailers: Service Retailers: Firms that primarily sell services rather than  merchandise, are a large and growing part of the retail industry 3. Developing a retail strategy: Using the Four P’s i. Product: Providing the right mix of merchandise and  services ii. Price: Defines the value of both the merchandise and  service provided iii. Placement: Convenience is a key ingredient to success iv. Promotion: Retailers use a wide variety of promotions,  both within their retail environment and through mass  media. - Benefits of Stores for Consumers o Browsing o Touching and Feeling o Personal Service o Cash and Credit o Entertaining and Social Interaction o Instant Gratification o Risk Reduction  4. Managing a omnichannel strategy: involves selling in more  than one channel (store, catalog, and internet) o Benefits of the Internet and Omnichannel Retailing i. Deeper and broader selection ii. Personalization  Gain Insights into consumer shopping behavior  Increase customer satisfaction and loyalty iii. Expand Market presence  o Effective Omnichannel Retailing  Integrated CRM: effective omnichannel operation  require an integrated customer relationship  management system with a centralized customer  data warehouse that houses a complete history of  each customer’s interaction with the retailer,  regardless of whether the sale occurred in a store,  online, or on the phone.   Brand Image: Retailers need to provide consistent  brand image across all channels.   Pricing: Customers expect pricing consistency for  the same SKU across channels.  Supply Chain: Omnichannel retailers struggle to  provide an integrated shopping experience across al  their channels because unique skills and resources  are needed to manage each channel. Marketing Exam 3 Chapter 4 Firm Goals - Greed and short term profit seeking  Serious long term consequences - Creating value over the long run  Long term success The Scope of Marketing Ethics - Business Ethics refers to the moral or ethical dilemmas that might  arise in a business setting - Marketing Ethics examines those ethical problems that are specific  to the domain of marketing Creating Ethical Climate in the Workplace Ethical Climate includes having a set of values that guides decision making and behavior - Values o Establish o Share  o Understand - Rules o Management commitment o Employee dedication - Controls o Reward o Punishment American Marketing Association Code of Ethics - Generally accepted code in marketing - Flows from general norms of conduct to specific values - Subareas within marketing have their own code of ethics to deal with  specific issues The Influence of Personal Ethics - Genetics - Family - Religion - Values Why people act unethically? - What makes people take actions that create so much harm? - Are all the individuals who engage in questionable behavior just plain  immoral or unethical? - Decisions often have conflicting outcomes, where both options have positive and negative consequences- To avoid such dire consequences, the short term goals of each  employee must be aligned with the long term goals of the firm Competing Outcomes Dangerous flaw in new model - Delay Production o Delayed revenue  Possible layoffs  Loss of bonuses - Continue Production o Potential injury to consumers  Loss of revenue Corporate Social Responsibility generally entails voluntary actions taken  by a company to address the ethical, social and environmental impacts of its  business operations and the concerns of its stakeholders - Being socially responsible generally means going above and beyond  the norms of corporate ethical behavior Framework for Ethical Decision Making 1. Identify Issues o Marketing research firm issues  Data collection methods  Hiding the real purpose of the study  Using results to mislead or even harm the public 2. Gather information and identify stakeholders o Identify all ethical issues and relevant legal information  Identify all relevant stakeholders and get their input on identified ethical  issues 3. Brainstorm and evaluate alternatives o Halt the market research project? o Make responses anonymous? o Instituting training of the AMA Code of Ethics for all researchers 4. Choose a course of actiono Weigh the alternatives  Take a course of action Integrating Ethics into Marketing Strategy 1. Planning Phase o The mission or vision statement sets the overall ethical tone for  planning. o Mission statements can be used as a means to guide a firm’s  SWOT analysis 2. Implementation Phase o Should the firm be targeting this market with this product? o Should the firm be selling its product in this market in this  manner? o Should the firm be relocating production to another country? 3. Control Phase o Check successful implementation  React to change Chapter 6 The Consumer Decision Process 1. Need recognition o The consumer decision process begins when consumers  recognize they have an unsatisfied need, and they would like to  go from their actual, needy state to a different, desired state o Functional needs pertain to the performance of a product or  service o Psychological needs pertain to the personal gratification  consumers associate with a product or service 2. Information search o Search for information about the various options that exist to  satisfy that needo Internal search for information, the buyer examines his or her  own memory and knowledge about the product or service,  gathered through past experiences o External search for information, the buyer seeks information  outside his or her personal knowledge base to help make the  buying decision- This might be talking with friends, family, or a  salesperson, internet o Three factors Factors affecting consumers’ search process  The perceived benefits versus perceived costs of search is it worth the time and effort to search for information  about a product or service?  The Locus of Control 1. Internal locus of control believe they have some  control over the outcomes of their actions, in which  case they generally engage in more search activities  = more search activities 2. External locus of control, consumers believe that fate or other external factors control all outcomes = less  search activities  Actual or perceived risk: There are five types of risk  associated with purchase decisions which can delay or  discourage a purchase  1. Performance risk involves the perceived danger  inherent in a poorly performing product or service  2. Financial risk is a risk associated with a monetary  outlay and includes the initial cost of the purchase,  as well as the costs of using the item or service  3. Social risk involves the fears that consumers suffer  when they worry others might not regard their  purchase positively  4. Physiological risk (safety risk) whereas performance  risk involves what might happen if a product does  not perform as expected, physiological risk refers to  the fear of an actual harm should the product not  perform properly  5. Psychological risk are those risks associated with the  way people will feel if the product or service does not convey the right image 3. Alternative evaluation o Sift through the choices available and evaluate the alternatives o Attribute Sets: Research has shown that a consumer’s mind  organizes and categorizes alternatives to aid his or her decision  process.   Universal sets include all possible choices for a product  category, but because it would be unwieldy for a person  to recall all possible alternatives for every purchase decision, marketers tend to focus on only a subset of  choices   Retrieval Sets (subset) which are those brands or stores  that can be readily brought forth from memory   Evoked set (another subset) which compromises the  alternative brands or stores that the consumer states he  or she would consider when making a purchase decision o Evaluate Criteria consist of important attributes about a  particular product. Consumers use several shortcuts to simplify  the potentially complicated decision process:   Determinant Criteria are product or service features that  are important to the buyer on which competing brands or  stores are perceived to differ- consumers look for  something special to differentiate one brand or store from another   Consumer decision rules are the set of criteria that  consumers use consciously or subconsciously to quickly  and efficiently select from among several alternatives.  These rules are typically either compensatory or  noncompensatory. 4. Purchase o After evaluating the alternatives, customers are ready to buy.  However, they don’t always patronize the store or purchase the  brand or item to which they had originally decided. It may not be available at the retail store for example. Retailers therefore turn  to the conversion rate to measure how well they have  converted purchase intentions into purchases.  o Increase conversion rate:  Reduce real or virtual abandoned carts  Merchandise in stock  Reduce the actual wait time 5. Post purchase o Marketers are particularly interested in post purchase behavior  because it entails actual rather than potential customers. There  are three possible postpurchase outcomes:   Customer Satisfaction: Dissatisfaction if the product fails  to achieve high performance expectations when setting  unrealistically high consumer expectations for the  product   Postpurchase cognitive dissonance is an internal conflict  that arises from an inconsistency between two beliefs or  between beliefs and behavior   Customer loyalty marketers attempt to solidify a loyal  relationship with their customers   Undesirable Consumer BehaviorInvolvement and Consumer  Buying Decisions Consumers make two types of buying decisions depending on their level of  involvement: extended problem solving or limited problem solving - Involvement is the consumer’s degree of interest in the product or  service Types of Buying Decisions - Extended Problem Solving when the customer perceives that the  purchase decisions entails a lot of risk. Occurs during a purchase  decision that calls for a lot of effort and time. - Limited Problem Solving occurs during a purchase decision that  calls for, at most, a moderate amount of effort and time o Impulse Buying is a buying decision made by customers on the spot when they see the merchandise o Habitual Decision Making describes a purchase decision  process in which consumers engage in little conscious effort Chapter 8 Assessing Global MarketsBecause different countries, with their different stages of globalization, offer  marketers a variety of opportunities, firms must assess the viability of  various potential market entries.  Examine 4 set of criteria necessary to assess a country’s market: 1. Economic Analysis using metrics o The greater the wealth of people in a country, generally, the  better the opportunity a firm will have in that particular country o Must look at 3 major factors  The general economic environment  GDP: defined as the market value of goods and services  produced by a country in a year  Gross national income: consists of GDP plus the net  income earned from investments abroad.  PPP: a theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in one  will cost the same in the other, if expressed in the same  currency  Human Development index  Market size and population growth rate  Real Income  Firms can make adjustments to an existing product or  change the price to meet the unique needs of a particular country market 2. Analyzing infrastructure and Technological Capabilities o Infrastructure is defined as the basic facilities, services, and  installations needed for a community or society to function  Transportation  Communication  Distribution Channel  Commerce 3. Analyzing Governmental Actions o Government actions can significantly influence firms’ ability to  sell goods and services because they often result in laws or other regulations that either promote the growth of the global market  or close off the country and inhabit growth  Tariff (duty) is a tax levied on good imported into a  country  Quota designates a minimum or maximum quantity of a  product that may be brought into a country during a  specified time period  Exchange control refers to the regulation of a country’s  currency exchange rate  Trade agreement is an intergovernmental agreement  designed to manage and promote trade activities for a  specified region, and a trading bloc consists of those countries that have signed the particular trade  agreement 4. Analyzing Sociocultural Factors o Culture   Power Distance is willingness to accept social inequality  as natural   Uncertainty avoidance the extent to which the society  relies on orderliness, consistency, structure, and  formalized procedures to address situations that arise in  daily life   Individualism perceived obligation to and dependence on  groups   Masculinity the extent to which dominant values are male oriented. A lower masculinity ranking indicates that men  and women are treated equally in all aspects of society; a higher masculinity ranking suggests that men dominate  in positions of power   Time orientation short verses long term orientation. A  country that tends to have a long term orientation values  long term commitments and is willing o accept a longer  time horizon for, say, the success of a new product  introduction   Indulgence the extent to which society allows for the  gratification of fun and enjoyment needs or else  suppresses and regulates such pursuits BRIC o Great potential for growth in the global community  Brazil  Russia  India   China Choosing a Global Entry Strategy Export has lowest risk, less control  Direct investment has most risk, and  most control 1. Export producing goods in one country and selling them in another 2. Franchising  3. Strategic Alliance refer to collaborative relationships between  independent firms, though the partnering firms do not create an  equity partnership; that is, they do not invest in one another 4. Joint Venture is formed when a firm entering a market pools its  resources with those of a local firm 5. Direct Investment requires a firm to maintain 100 percent  ownership of its plants, operation facilities, and offices in a foreign  country, often through the formation fo wholly owned subsidiaries Choosing a Global Marketing Strategy: Target Market (STP) ∙ Cultural nuances ∙ Subcultures ∙ View of product and consumer role ∙ Different positions ∙ Adaptation ∙ Single positioning strategy The Global Marketing Mix: Product or Service Strategies Sell the same product or service in both the home country market and host  country  Sell a product or service similar to that sold in home country  but include minor adaptions  Sell totally new products or services  Global Marketing Mix: Pricing Strategies Prices o Tariffs o Quotas o Antidumping policies o Economic conditions o Competitive factors Global Marketing Mix: Global Distribution Strategies ∙ Some global channels are very long and complex ∙ Consumers shop local small local stores ∙ Supplies must be creative in delivering to these outlets Global Marketing Mix: Global Communication Strategies ∙ Literacy levels vary by country ∙ Firms choose whether to adapt to language differences ∙ Cultural and religious differences also matter Chapter 14 The 5 C’s of Pricing: Successful pricing strategies are built around the five  critical components of pricing  ∙ Competition∙ Costs  o Variable costs: vary with product volume  o Fixed Costs: Unaffected by production volume  o Total Cost: Sum of variable and fixed costs o Break-even analysis enables managers to examine the  relationships among cost, price, revenue, and profit over  different levels of production and sales ∙ Company objectives:  The pricing of a company’s products and services should support and  allow the firm to reach its overall goals o Profit-oriented: focuses on target profit pricing, maximizing  profits, or target return pricing o Sales oriented: Firms set prices believe that increasing sales  will help the firm more than will increasing profits. o Competitor oriented: Strategize according to the premise that  they should measure themselves primarily against their  competitor.o Customer oriented: When a firm sets its pricing strategy  based on how it can add value to its products of services. ∙ Customers  o Demand curve shows how many units of a product or service  consumers will demand during a specific period of time at  different prices- Not all are downward sloping.  o Prestigious products or services have upward sloping curves.  Consumers purchase for their status rather than their  functionality. The higher the price, the greater the status  associated with it.  o Price Elasticity of Demand   Elastic = Price sensitive. In an elastic scenario,  relatively small changes in price will generate fairly  large changes in the quantity demanded, so if a firm  is trying to increase its sales, it can do so by lowering prices.   Inelastic = price insensitive. If a firm must raise  prices, it is helpful to do so with inelastic products or  services because in such a market, fewer customers  will stop buying or reduce their purchases.   Consumers are less sensitive to price increases for  necessities  Factors Influencing Price Elasticity of Demand:  Income effect is the change in the quantity of a product demanded by consumers due to a  change in their income  Substitution effect refers to consumers’ ability  to substitute other products for the focal brand  Cross price elasticity is the percentage change  in the quantity Product A demanded compared  with the percentage change in price in Product  B ∙ Channel members o Manufacturers, wholesalers and retailers can have different  perspectives on pricing strategies o Manufactures must protect against gray market transactions Chapter 15 Pricing Strategies ∙ Cost based pricing methods determine the final price to charge by  starting with the cost. Relevant costs and a profit are added. Then this  total amount is divided by the total demand to arrive at a cost plus  price.o Cost based methods do not recognize the role that consumers or competitors’ price play in the marketplace o All costs calculated on a per unit bases o Assumes costs don’t vary for different levels of production ∙ Competition Based methods they may set their prices to reflect the  way they want consumers to interpret their own prices, relative to  competitors’ offerings o Premium Pricing ∙ Value Based methods include approaches to setting prices tat focus  on the overall value of the product offering as perceived by the  consumer. Consumers determine value by comparing the benefits they expect the product to deliver with the sacrifice they will need to make  to acquire the product. o Consumers perceptions Pricing Strategies ∙ Everyday low pricing companies stress the continuity of their retail  prices at a level somewhere between the regular, nonsale price and  the deep-discount sale prices their competitors may offer. o By reducing consumers’ search cots, EDLP adds value;  consumers can spend less of their valuable time comparing  prices, including sale prices, at different stores ∙ High/Low Pricing relies on the promotion of sales, during which  prices are temporarily reduced to encourage purchases. o This strategy is appealing because it attracts two distinct  market segments: those who are not price sensitive and are  willing to pay the “high” price and more price sensitive  customers who wait for the “low” sale price o Using this strategy many communicate through use of  reference price, which is the price against which buyers  compare the actual selling price of the product and that  facilitates their evaluation process.   Internal reference price  External reference price Everyday low pricing vs. High/Low Pricing - Create value in different ways - EDLP saves search costs of finding lowest overall prices - High/low provides the thrill of the chase for the lowest price New Product Pricing Strategies ∙ Market Penetration Pricing set the initial price low for the  introduction of the new product or service. Their objective is to build  sales, market share, and profits quickly. ∙ Price skimming is a strategy that occurs in many markets, and  particularly for new and innovative products or services, and involves  consumers being willing to pay a higher price to obtain the new  product or service. Pricing Tactics Aimed at Consumers - Mark downs are the reductions retailers take on the initial selling  price of the product or service. - Quantity Discounts  - Leader pricing is a tactic that attempts to build store traffic by  aggressively pricing and advertising a regularly purchased item, often  priced at or just above the stores cost.  - Season discounts - Coupons offer a discount on the price of specific items when they’re  purchased - Rebates provide another form of discounts for consumers off the final  selling price - Leasing consumers pay a fee to purchase the right to use a product  for a specific amount of time - Price Bundling selling more than one product for a single, lower price Business Pricing Tactics and Discounts - Seasonal discounts is an additional reduction offered as an incentive to retailers to order merchandise in advance of the normal buying  season - Cash discounts reduces the invoice cost if the buyer pays the invoice  prior to the end of the discount period.  encourages early payment,  they benefit from the time value of money - Vendor Allowances  o Advertising allowances offers a price reduction to channel  members if they agree to feature the manufacturer’s product  in their advertising and promotional efforts o Slotting allowances are fees paid to retailers to get new  products into sores or to gain more or better shelf space for  their products - Quantity discounts provides a reduced price according to the  amount purchased. The more the buyer purchases, the higher the  discount and, of the course, the greater value. - Uniform delivered vs. zone pricing  o Uniform delivered tactic the shipper charges one rate, no  matter where the buyer is located, which makes things very  simple for both the seller and the buyer o Zone Pricing sets different prices depending on geographical division of the delivery areasLegal Aspects and Ethics of Pricing - Deceptive or illegal price advertising - Predatory Pricing is when a firm sets a very low price for one or  more of its products with the intent to drive its competition out - Price fixing is the practice of colluding with other firms to control  prices. Price fixing might be either horizontal or vertical. o Horizontal price fixing occurs when competitors that  produce and sell competing products collude, or work  together, to control prices, effectively taking price out of the  decision process for consumers. o Vertical price fixing occurs when parties at different levels  of the same marketing channel collude to control the prices  passed on to consumers. - Price discrimination is when firms sell the same product to different  resellers at different prices Chapter 16 Supply Chain Management Supply chain management: is a  set of approaches and techniques  firms employ to integrate their  suppliers, manufacturers,  warehouses, stores, and  transportation intermediaries into  a seamless operation in which  merchandise is produced and  distributed in the right quantities,  to the right locations, and at the  right time, as well as to minimize  system wide costs while satisfying the service levels that their  customers require. Marketing Channels Add Value - Reduces number of transactions - Increase value for consumers - More efficient and effective Marketing Channel Management Affects Other Aspects of Marketing - Fulfilling delivery promises- Meeting customer expectations - Reliant on an efficient supply chain Designing Marketing Channels - Direct marketing channel is when there are no intermediaries  between the buyer and the seller - Indirect marketing channels is when there are one or more  intermediaries work with manufacturer to provide goods and services  to customers Types of Vertical Marketing Systems Vertical marketing system: a marketing channel in which the members  act as a unified system - Administered vertical marketing system: There is no common  ownership or contractual relationships, but the dominant channel  member controls or holds the balance of power - Contractual vertical marketing system Independent firms at  different levels of the marketing channel joining through contracts to  obtain economies of scale and coordination to reduce conflict  Franchising is the most common type of contractual vertical marketing  system - Corporate vertical marketing system the parent company has  complete control and can dictate the priorities and objectives of the  marketing channel because it owns multiple segments of the channel,  such as manufacturing plants, warehouse facilities, and retail outlets.  Power in marketing channel exists when one firm has the ability to dictate  the actions of another member at a different level of distribution.  - Reward - Coercive - Referent - Expertise - Information - LegitimateManaging Marketing Channels and Supply Chains Through Strategic  Relationships Strategic relationship: in which the marketing channel members are  committed to maintaining the relationship over the long term and investing  in opportunities that are mutually beneficial  Successful strategic relationships rely on:  - Mutual Trust holds a strategic relationship together  - Open Communication to share information, develop sales forecasts  together, and coordinate deliveries. Honest communication is key to  developing successful relationships because supply chain members  need to understand what is driving each other’s business, their roles in the relationship, each firm’s strategies, and any problems that arise  over the course of the relationship.  - Common Goals Supply chain members must have common goals for a  successful relationship to develop. It is an incentive to pool their  strengths and abilities to exploit potential opportunities together.   - Interdependence When supply chain members view their goals and  ultimate success as intricately linked, they develop deeper long term  relationships.   - Credible Commitments It is what forms the relationship, the  commitment to be together Making Information Flow through Marketing Channels Information flows from the customer to stores, to and from distribution  centers, possibly to and from wholesalers, to and from product  manufacturer, and then on to the producers of any components and the  suppliers of raw materials.  Flow 1 (Customer to Store): The sales associate scans the UPC tag on the packaging, and the customer receives a receipt. The UPS tag contains all the  information about the product.Flow 2 (Store to Buyer): The point of sale terminal records the purchase  information and electronically sends it to the buyer at the store’s corporate  office. The sales information is incorporated into and inventory management  system and used to monitor and analyze sales and decide to recorder more  of the product, change price, plan or promote.  Flow 3 (Buyer to Manufacturer): The purchase information from each of  the stores is typically aggregated by the retailer as a whole, which creates an order for new merchandise and sends it to the manufacturer.  Flow 4 (Store to Manufacturer): In some situation, the sales transaction  data are sent directly from the store to the manufacturer, and the  manufacturer decides when to ship more merchandise to the distribution  centers and the stores. Flow 5 (Store to Distribution center): Stores also communicate with the  distribution center to coordinate deliveries and check inventory status.  Manufacturers can ship merchandise either directly to a store or to a  distribution center, where it is then shipped to the store.  Flow 6 (Manufacturer to Distribution Center and Buyer): When the  manufacturer ships the product to the store distribution center, it sends and  advanced shipping notice to the distribution center. An advanced shipping  notice is an electronic document that the supplies sends the retailer in  advance of a shipment to tell the retailer exactly what to expect in the  shipment.  Data Warehouse  Electronic Data Interchange is the computer to computer exchange of  business documents from a retailer to a vendor and back. Vendors can  transmit information about on hand inventory status, vendor promotions,  and cost changes to the retailer, as well as information about purchase order changes, order status, retail prices, and transportation routings.  - It enables channel members to communicate more quickly and with  fewer errors than in the past, ensuring the merchandise moves from  vendors to retailers more quickly. - Cycle time - Easily analyzed and used - Quality of communications Vendor- Managed Inventory is an approach for improving marketing  channel efficiency in which the manufacturer is responsible for maintaining  the retailer’s inventory levels in each of its stores. In ideal conditions, the  manufacturer replenishes inventories in quantities that meet the retailer’s  immediate demand, reducing stock outs with minimal inventory.  Making Merchandise Flow Through Marketing Channels Making merchandise flow involves first deciding whether the merchandise  will go from the manufacturer to the retailer’s distribution center or directly  on to stores. Once in distribution center, multiple activities take place before  it is shipped onto a store. The ultimate decision is usually up to the retailer  and depends on the characteristics of the merchandise and the nature of  demand.  Advantages of Distribution centers - More accurate sales forecasts are possible when retailers combine  forecasts for many stores serviced by one distribution center rather  than doing a forecast for each store. - Distribution centers enable the retailer to carry less merchandise in the individual stores, which results in lower inventory investments system  wide. - It is easier to avoid running out of stock or having too much stock in  any particular store because merchandise is ordered from the  distribution center as needed. - Retail store space is typically much more expensive than space at a  distribution center, and distribution centers are better quipped than  stores to prepare merchandise for sale The Distribution Center performs the following activities - Management and inbound transportation o Coordinating the physical flow of merchandise to stores - Receiving and checking using UPC and RFID o Receiving is the process of recording the receipt of  merchandise at it arrives at a distribution center o Checking is the process of going through the goods upon  receipt to make sure they arrived undamaged and that  merchandise ordered was the merchandise received. - Storing and Cross-Docking o Merchandise cartons that are cross-docked are prepackaged  by the vendor for a specific store.  - Getting Merchandise Floor Readyo Floor ready merchandise is merchandise that is ready to be placed on the selling floor o Ticketing and marketing refers to affixing price and  identification labels to the merchandise - Preparing to ship - Shipping to store Inventory Management Through Just-In-Time Systems - Just-in-time (JIT)/ Quick response (QR) in retailing, are inventory  management systems that deliver less merchandise on a more  frequent basis than traditional inventory systems. The firm gets  merchandise just in time for it to be used in the manufacture of  another product or for sale when the customer wants it.  - Advantages: reduced lead time (the amount of time between the  recognition that an order needs to be placed and the arrival of the  needed merchandise at the seller’s store and is available for sale),  increased product availability, and lower inventory investment. Chapter 17  Factors for Establishing a Relationship with Retailers 1. Choosing retailing partners i. Channel Structure  Degree of vertical integration: is the degree to which  the manufacturer has a strong brand or is otherwise  desirable in the market; and the relative power of the manufacturer and retailer   Manufacturers brand   Power of manufacturer and retailer ii. Customer Expectations  Retailers should also know customer preferences  regarding manufacturers. Manufacturers, in contrast,  need to know where their target market customers  expect to find their products and those of their  competitors. iii. Channel Member Characteristics  Larger firms  Less likely to use supply chain  intermediaries & can gain more control, be more  efficient, and save money iv. Distribution Intensity   Intensive designed to place products in as many  outlets as possible   Exclusive granting exclusive geographic geographic  territories to one or very few retail customers so no  other retailers in the territory can sell a particular  brand.  Selective relies on a few selected retail customers in  a territory to sell products 2. Identifying types of Retailers Manufacturers need to understand the general characteristics of  different types of retailers to determine the best channels for their  product.  Food retailers: General merchandise retailers: Service Retailers: Firms that primarily sell services rather than  merchandise, are a large and growing part of the retail industry 3. Developing a retail strategy: Using the Four P’s i. Product: Providing the right mix of merchandise and  services ii. Price: Defines the value of both the merchandise and  service provided iii. Placement: Convenience is a key ingredient to success iv. Promotion: Retailers use a wide variety of promotions,  both within their retail environment and through mass  media. - Benefits of Stores for Consumers o Browsing o Touching and Feeling o Personal Service o Cash and Credit o Entertaining and Social Interaction o Instant Gratification o Risk Reduction  4. Managing a omnichannel strategy: involves selling in more  than one channel (store, catalog, and internet) o Benefits of the Internet and Omnichannel Retailing i. Deeper and broader selection ii. Personalization  Gain Insights into consumer shopping behavior  Increase customer satisfaction and loyalty iii. Expand Market presence  o Effective Omnichannel Retailing  Integrated CRM: effective omnichannel operation  require an integrated customer relationship  management system with a centralized customer  data warehouse that houses a complete history of  each customer’s interaction with the retailer,  regardless of whether the sale occurred in a store,  online, or on the phone.   Brand Image: Retailers need to provide consistent  brand image across all channels.   Pricing: Customers expect pricing consistency for  the same SKU across channels.  Supply Chain: Omnichannel retailers struggle to  provide an integrated shopping experience across al  their channels because unique skills and resources  are needed to manage each channel.

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