MKT 320 Exam 3 Study Guide
MKT 320 Exam 3 Study Guide MKT 320
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This 16 page Study Guide was uploaded by taylor Notetaker on Sunday April 26, 2015. The Study Guide belongs to MKT 320 at University of Miami taught by in Spring 2015. Since its upload, it has received 98 views. For similar materials see Retailing in Marketing at University of Miami.
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Date Created: 04/26/15
42115 1 MKT 320 Unit 3 Study Guide Class 1 Land39s End Video Advantages and Disadvantages on Private Labels Rather than National Brands Advantages 1 Can offer unique merchandise 2 Higher pro t margins Disadvantages 1 Many consumers are loyal to national brands 2 There is a perception that private label is inferior to quality 3 If you can t sell it you ve gotta dump it no marshall s tj maxx Criteria to Evaluate Vendors 1 Demand for the merchandise 2 Cost of the merchandise Advantages and Disadvantages of LongTerm Relationship with it39s Suppliers Advantages 1 Increased ef ciency in the supply chain 2 Potential for innovative products Disadvantages 1 If vendor has problems you need to stick it outwith them you are stuck with them in sickness and health 2 Vendor complacency JC Penney Private Label Shirts Video Advantages and Disadvantages of Private Label Merchandise Advantages 1 Can offer unique merchandise 2 Higher pro t margins Disadvantages 1 Many consumers are loyal to national brands 2 There is a perception that private label is inferior to quality 3 If you can t sell it you ve gotta dump it no marshall s tj maxx Investment in Quality Control 0 Goal is not to be the best it s to be the most consistent American Furniture Warehouse Ethical Tradeoffs vs Consumer Self Interests 0 If do business overseas the negatives are Flipside of argument is that extra revenue the country gets could get used to improve living conditions 0 Most research shows that people vote with pocket books prefer cheaper prices over caring about overseas Strategies to Hold the Line on Prices 1 Own and maintain their own eet of trucks 2 Take delivery at the factory or the port 42115 2 3 Look for vendors that are willing to give you price breaks Criteria for Vendors 1 Merchandise should suit the target market 2 Unique merchandise 3 Trustworthiness Best Practices with Smaller Vendors 1 Make sure that your technology matches their technology when you communicate 2 Set highquality expectations Strategies to Stretch Buying Staff39s Productivity 1 Plan the buying trips carefully 2 Use things like internet and email to conduct business try to avoid physical Chapter 13 Buying Merchandise 2 Types of Brands 1 National Brands made by the manufacturer and then sold to multiple retailers 1 Umbrella Brand when you have a family of brands with sub brands underneath it ex proctor and gamble dial etc 2 Store Brands means the same thing as private label made by retailer Four types 1 Premium Store Brands have comparable quality to national brands with modest price savings 2 Copycat Brand when you try to copy the packaging or appearance of a national brand with lower prices up and up 3 Exclusive Store Brand a partnership between a manufacturer and a retailer to be sold exclusively in the retailer ex Kohl s and Estee Lauder only in Kohl s 4 Generic Brand quotunbrandedquot no frills on the packaging and no brand name on product at all ex prescription drugs Wholesale Market Centers vs Trade Shows 0 Wholesale Market Center a permanent place for retailers and vendors to meet 0 Trade Shows for a limited period of time 4 Global Sourcing Costs when you manufacture over seas 1 Currency Fluctuations 2 Tariff a tax on imports 3 Longer Lead Times 4 Greater Transportation Costs Support Services 0 Resident Buying Of ces a third party that brings retailers and vendors together 0 Reverse Auctions when you have one retailer and multiple vendors competing for their business Walmart does this a lot can be online not just physical 10 Vendor Negotiation Tips S C S S U L L K D A Same number of negotiators on both sides Choose a good place to negotiate SetrealdeadHnes Separate the people from the problem Use objective information Look for mutual gain Let everyone talk FP P FP N 42115 3 8 Know your limits 9 Don t burn bridges 10 Assume nothing 4 Things about Strategic Relationships 1 Mutual Trust 2 Open Communication 3 Common Goals 4 Credible Commitments both sides invest money into the relationship LEGAL AND ETHICAL ISSUES Counterfeit Merchandise any merchandise that is sold without a trademark or copydght 0 Gray Market when somebody diverts merchandise internationally so that the trademark or copyright owner doesn t get paid Diverted same as gray market except it is done domestically Black Market merchandise that is very scarce and usually sold illegally Terms of Purchase RobinsonPatman Act all things being equal a manufacturer cannot charge different prices to different retailers 0 Problem 100 ways to get around the law Commercial Bribery Paying somebody an illegal inducement to do business Chargeback When a retailer deducts money it owes to the vendor Buyback 0 When a competitive manufacturer goes into a retailer and buys up all of their competition s goods Exclusive Dealing Agreements Allowed to have exclusive dealing agreements as long as a consumer can reasonably nd a competitive product nearby 0 Typically this is legal Tying Contracts 0 When a manufacturer allows a retailer to sell one of their attractive items on the condition that they also sell an unattractive item ex Sony Best Buy Best Buy wants to sell Blu Ray and Sony says only if you sell these outdated DVD players too Refusal to Deal 0 Generally almost always legal for retailers and manufacturers to not do business together as long as the goal is not to restrict competition Class 2 Pricing Decisions Video Why is Price an Important Component in Determining Customer Value for Retailers 1 Bene ts must outweigh costs 2 Price is indicator of quality 3 Price can communicate status or prestige 42115 4 Sun Electronics Pricing Strategy 1 Use an EDLP strategy 2 Match others so you don t have to comparison shop Shelton Matthews Chocolate Pricing Strategy 1 Priced above many ne brands but below the more expensive European brands 2 Goal is to have high quality chocolates that compare favorably with European brands Rally39sCheckers DriveThru Strategy 1 Use a limited menu 2 Use tiered pricing Jean Patou39s Strategy 1 Use psychological pricing 2 Goal is to convey image and status JC Penney Case considered a midmajor department store Environmental Factors Contributing to Fair and Square 1 Economic downturn of 2008 2 Too much competition in the midjaor department store category 3 Customer frequency was low Alternative Pricing Strategies 0 Could have kept old strategy but been more effective and precise Could have had early bird specials college discount days 0 Could have rotated which brands were on sale maybe one per month Why did Fair and Square fail Retreat from EDLP Failed because there is a perception that the items were already discounted and people got used to it felt that there was a price increase with Fair and Square Attempting to Attract a New Customer 0 Trying to get a younger customer that was less pricesensitive Could JC Penney increase chances of success for Fair and Square 1 De ne target market better 2 Use electronic and social media platforms better 3 Update their private label brands Chapter 14 Retail Pricing 2 Pricing Strategies 1 HighLow constantly couponing 2 EDLP do not coupon as much typically pricing doesn t move that much Markdown o A reduction in the initial price Pricing Techniques 1 Variable Pricing most common technique price changes for a number of reasons a First Degree Price Discrimination price is based on what somebody is willing to pay ex auction b Dynamic Pricing when you charge differently based on the type of customer or even the level of demand ex two people paying different prices for plane tickets 42115 5 c Second Degree Price Discrimination price is different based on the nature of the offering ve examples i Promotional Markdowns typically used for holidays or special events ii Clearance Markdowns when the price is lower at the end of the season that it was at the start of season iii Coupon a discount when the item is purchased iv Price Bundling two or more different products for one price ex value meal v Quantity Discount two or more products of the same for one price d Third Degree Price Discrimination price is different based on the demographics senior citizen or child tickets i Zone Pricing special type of third degree when price is different based on geography 2 Leader Pricing when the price of a popular item is lowered to bring people into the store 3 Pricing Lining when you have items in a category from most expensive to least expensive from left to right to make comparison shopping easier 4 Odd Pricing when you use an odd number at the end of the price typically 9 people think getting deal Legal Issues 1 Predatory Pricing when a market leader purposely lowers their price to destroy a competitor price below cost until competitor is gone then raise it again 2 Resale Price Maintenance when a retailer lowers their price well below MSRP danger is losing valuequality to the manufacturer 3 Horizontal Price Fixing when a bunch of retailers collude on the price of an item highly illegal 4 Bait and Switch when a retailer advertises an item that is not in stock and then tries to sell a different item in store Class 3 lnstore Activity SKYLYNE night club Class 4 Microwave Popcorn Act II Video Common Brands 1 PopSecret 2 OrvilleReddenbacher 3 Newmann s Own 4 Jolly Time 5 Act II Where to Purchase Grocery stores Convenience stores Discount stores Warehouse clubs gtUUl 39 42115 6 5 Vending machines Why Multiple Channels of Distribution 1 To reach more customers 2 To increase brand recognition and awareness The Homepage 1 For market research 2 To give out nutritional facts Apple Store Case Apple Store Layout and Atmosphere 0 Goal is to provide innovative products with excellent design features so they want their stores to feel like gathering places bright lights bright acoustics strong focus on customer service Unofficial mission statement to be Nordstrom of technology high energy employees high service America39s Best Retailer Most people say 0 Manage employees well 0 Manage inventory well 0 Strong brand image 0 But are also concerned with 0 Death of Steve Jobs death of CEO or company creator can cause death of company apple has lived and died three or four times since beginning 0 General perception is that Apple is in good hands but not great hands Avon39s Values and New Opportunities 1 International expansion one of rst companies to get license in China 2 Men underserved market for Avon 3 Young women trying to get younger faces for Avon than in the past Chapter 15 Retail Communication Mix Issues two types of media Types of Traditional Media rst type of media 1 Mass Media Advertising impersonal placement of messages to inform 5 types 0 Newspapers getting more expensive and skinnier sales have slowed retailers like newspapers because tend to be low cost alternative short shelf life 0 Magazines typically done by national retailers for image advertising 0 Direct Mail typically brochures catalogs or printed materials 0 Television image advertising can be expensive 0 Radio low cost plus a lot of listeners minus some people view radio as background noise 2 Sales Promotions incentives for a limited period of time 0 Coupons a discount at purchase Rebates a refund from the manufacturer 0 Premiums a free item to reward behavior 3 lnStore Marketing three types 42115 7 PointofPurchase at checkout 0 Samples try before you buy 0 Special Events for seasonal or sporting events 4 Personal Selling facetoface exchanges 5 Public Relations managing communication and relationships to control your image in the media New Media second type of media ONLINE MEDIA IS ONLY TYPE OF NEW MEDIA 0 Online Media different types 1 Websites build image inform and sell 2 Email sending messages over the internet to speci c individuals 3 Mobile Communications wireless handheld devices 4 Social Media encourages word of mouth a Blogs speci c type of social media concept sense of community Brand Images and Customer Loyalty Brand any feature name term symbol that identi es one seller s good as distinct from another 0 Brand Equity value that a brand image provides a retailer Brand Awareness a customer s ability to recognize that a brand name is a type of retailer two types 0 Aided Recall if I mention the name to you you recognize it o TopofMind Awareness when I mention the name of the retailer to you then you mention the brand name 0 Brand Associations anything linked in a consumer s memory Setting the Budget for Communication three ways 1 Marginal Analysis you spend a dollar as long as you get back at least a dollar 2 Objective and Task each project is treated as its own entity with its own budget 3 3 RuleofThumb Methods a Affordable a percentage of the budget excluding communication expenses b Percentage of Sales a xed percentage of forecasted sales c Competitive Parity your budget is based on your market share Class 5 Walgreens Video Is Shoplifting Really that Important 0 Yes inventory loss between 2 and 3 percent of total sales 0 Because most pro t margins are between 3 and 15 percent that s a big deal Who Puts the Electronic Article Surveillance EAS tags on Two theories 1 If manufacturer puts tag on its cheaper for retailer 2 If retailer puts tag on feel closer to the product How can Employees Reduce Shoplifting Psychological theory that if you increase customer service people will be less likely to shoplift because they feel like stealing from friend 105 A Bank Video How has Vertical Integration Helped 1 Control all aspects of design manufacturing and distribution 42115 8 2 No longer outsource anything What Characteristics Differentiate them in Men39s Apparel 1 Wellstocked inventory 2 Highquality clothing 3 Great service Competitive Environment in Men39s Apparel 1 Fewer mom and pop stores 2 Little expansion 3 Appeals to adult men the most underserved market in shopping malls Enterprise Company Case Pros and Cons of Human Resource Strategy 0 Pros 0 Hire out of college look for leadershipinterpersonal skills 0 Exclusively promote from within 0 Clearly de ned performance goals 0 Con o Parachialism theory that if you only promote from within you will eventually miss out on best practices in your own industry How does Strategy Complement the Quality of Customer Service Delivered 1 Only get promoted if you are above the average ESQI customer service questionnaire 2 All the ESQI scores are posted public so you always know how others are doing Chapter 16 Store Management Responsibilities Recruitment and Selection Job Description 0 Identi es the essential activities and quali cations for potential employees How to Locate Employees 1 Partner with government agencies 2 Use current employees as talent scouts 3 Use your store front creatively Screening ve ways to screen Application forms give job history Check all references Check social media Testing can only be done if shown to be directly related to the job lie detector tests almost always iega 5 Give them a realistic job preview don t overpromise Selection two things 1 Interview Prep a lot of employers try to give behavioral interviews to see what your behavior would be 2 Managing the Interview try to ask a lot of openended questions Legal Issues 1 Discrimination Disparate Treatment when you treat one class of people differently from another class gtUUI 39 42115 9 o Disparate Impact when a seemingly neutral law results in discrimination 2 Age Discrimination and Employment Act protects people between the ages of 40 and 70 3 American with Disabilities Act governs workplace environment Socializing and Training Employees Orientation purpose is to reduce quotentry shockquot 4 Types of Training 1 Structured classroom training 2 On the job trained in front of customers 3 Blended combination of structured and onthejob 4 Failures and Successes always want to study this when someone doesn t make it look at training and orientation rst Evaluation and Feedback 0 Who Typically supervisor or HR 0 How often Typically once or twice a year 0 Format Either through interview or by watching your behavior Compensation and Rewards o Extrinsic money power and recognition Intrinsic feeling of a job well done 0 Compensation Programs 0 Types either straight salary or incentive based 0 Design combination of the two 0 Setting Commission varies by industry 0 Legal Issues 0 Fair Labor Standards Act governs minimum wage overtime and child labor 0 Equal Pay Act gender discrimination Leadership 0 Types 1 Task Performance the store achieving its goals 2 Group Maintenance the employees working well together 0 Styles 1 Autocratic no input from the employees 2 Democratic get input from the employees Transformational Leader gets the employee to put the company ahead of their own personal goals 0 Sexual Harassment deals with workplace behavior Cost Control 0 Labor Scheduling maximizing the right number of employees per shift 0 Store Maintenance deals with the physical environment of the store Inventory Loss Reduction Shrinkage The difference between actual inventory and reported inventory 0 Two sources 0 Shoplifting Detection and Prevention ve ways 42115 10 1 Store Design don t have tting rooms next to exits common sense 2 Security hire security guards 3 Personnel Policies require receipts for refunds mystery shoppers for shoplifters 4 Prosecution zero tolerance prosecute everyone who shoplifts 5 Technology couple technological helpful tools 0 Employee Theft Screen better when you hire Security Policies and Controls have mystery shoppers look at the employees Class 6 McDonald39s Made for You Video Problems before Made for You Kitchen 1 Noticed a change in customers behavior tastes and needs 2 People were working longer hours and their eating was more spread out 3 Special orders created longer wait times How System Helps Deliver a Quality Product with Great Service Took out metal warming bins Each item is made after order is placed Use standards for service and quality Can now assemble a sandwich in 15 seconds or less gtUUl 39 Blue Tomato Case Strengths of Each Distribution Channel 0 Brick and Mortar stores close and direct contact with customer 0 Catalog appeals to customers that don t use online channels 0 Online can offer more products Synergies across different channels Additional actions to be omnichannel Synergies stores have installed kiosks and people can log onto Facebook to connect with friends and get advice 0 Omnichannel enables customers to order through online email or even app Challenges to Coordinate the Different Channels 1 Consistent face to customers across all contact points 2 Poor overlap among the channels 3 Need to have integrated communication Challenges with International Expansion 1 Need large sums of capital 2 Need to research on the economic power and income levels of potential customers Chapter 17 Objectives of a Good Store Design 1 Implements the retail strategy 2 Builds loyalty 3 Increases sales 4 Controls cost 5 Legal considerations for disabled people 42115 11 Types of Design 1 2 3 Grid what you nd in grocery and drug stores rows of merchandise repetitive aisles Racetrack Loop tend to nd in many department stores one aisle like a big loop that circles the entire store and then departments jet off it FreeForm boutiquespecialty stores trying to duplicate a room inside someone s house Feature Areas PPOFP P FWN Windows external to the store Entrances customers rst impression of the retailer Freestanding Displays designed to draw you into the store or the department Mannequins lifesize representations of the human body End Caps at the end of the aisle Promotional Aisle merchandise on sale for a short time Walls allows to creatively use space Dressing Rooms many people make their decisions here Cash Wraps where you check out old model is that you pay in the department now centralized Locations of Departments Impulse Merchandise bought without a plan at checkout Demand Merchandise people plan to buy it in back of store or on upper levels Special Merchandise found in lightly traf cked areas Adjacencies complementary categories toothbrushes and toothpaste Planograms a diagram that shows where every SKU should go Fixtures hold and display the merchandise Straight rack a long pipe balanced between supports in either the oor or the wall Rounder a pedestal that holds a lot of merchandise 4Way two pipes perpendicular to each other and you can turn it to see from four different angles Gondola a shelf or a bin Presentation Techniques Idea to promote image Item and Size the most common Color typically viewed as a bold technique Price Lining have merchandise lined up from most expensive to least expensive Vertical when you use walls and high gondolas Tonnage when you have large quantities of the merchandise Frontal when you display as much of the merchandise as possible to the human eye Lighting can be used to set mood Color used for image and mood Music important because it can be changed quickly Scent appeals to our emotions Taste store restaurants are becoming more popular 42115 12 Class 7 Ritz Carlton Video Credo and Motto Credo quotA place where the genuine care and comfort of our guests is our highest missionquot Motto quotLadies and gentlemen serving ladies and gentlemenquot 3 Steps of Service 1 A warm greeting 2 Ful llment of each guest s needs 3 A fond farewell Service Values 1 Create Ritz Carlton guests for life 2 To always be responsive to the needs of our guests The Employee Promise Promises to Employees 1 Diversity is valued 2 Quality of life enhanced 3 Individual aspirations ful lled 4 Ritz Carlton mystique is strengthened Competitive Advantage 1 Personalized services 2 High service standards HR Activities to Provide WorldClass Service 1 Careful Hiring 2 Strong Training Discmart Case Why did the Service Breakdown Occur They were out of an item that should have been in stock How was this Gap related to the 4 Gaps in Chapter 18 1 Communications MOST AFFECTED they promoted something that was not there 2 Standards it is assumed that a promoted item should be in stock 3 Delivery employee was not empowered to resolve the problem 4 Knowledge not really affected because don t need to do market research to gure this out Chapter 18 Customer Service 0 A set of activities undertaken by the retailer to make the shopping experience more rewarding Personalized vs Standardized Service 0 Personalized when you tailor your service to meet individual needs Standardized when you set procedures to be implemented consistently Gaps Model all service can be broken into four areas 1 Knowledge Gap the difference between customer expectations and the retailer s perception of customer expectations 42115 13 a Start by Researching Customer Expectations and Perceptions ve areas to research i 1 Social Media ii 2 Surveys Panels and Contests like focus groups iii 3 Customer Interaction while they shop iv 4 Study Customer Complaints v 5 Get Employee Feedback b Using Customer Research make sure to use it on a timely basis 2 Standards Gap difference between retailer perceptions of customer expectations and the customer service standards it sets a 4 Ways to Reduce i Commitment to service quality at the top levels ii De ning the role of service providers iii Setting service goals iv Measuring service performance 3 Delivery Gap difference between retailer service standards and actual service provided a 6 Ways to Reduce i Giving information and training on service ii Employee empowerment by transferring decisionmaking authority iii Providing instrumental machines and emotional people support iv Providing incentives like bonuses and commissions v Improving internal communications to reducing con ict and total number of contacts vi Invest in technology 4 Communications Gap difference between actual service provided and service promised in the promotional program a 2 Ways to Reduce i Make realistic commitments in your advertising ii Managing customer expectations by underpromising and over deHve ng How to Recover Service Once it39s Lost 1 Listen to the customer 2 Provide a fair solution two terms 0 Distributive Fairness the perception of the result 0 Procedural Fairness the perception of the process 3 Resolve problems quickly ex put instructions on the packaging Key Terms Manufacturer39s Brands a line of products designed produced and marketed by a vendor also known as national brand Family Brand a product s brand name associated with the company s name 42115 14 Subbrand part of a branding strategy in which a product s brand name is associated with the description of the product such as Frosted Flakes where the family brand is Kellogg s House Brands same as generic brand Own Brands same as privatelabel brand Market Weeks same as trade show Duties same as tariff Partnering Relationship same as strategic relationship Intellectual Property property that is intangible and created by intellectual mental effort as opposed to physical effort Trademark any mark work picture or design associated with a particular line of merchandise or product Copyright a regulation that protects original works of authors painters sculptors musicians and others who produce works of artistic or intellectual merit Parallel Imports same as graymarket good Stocklifts same as buyback Liftouts same as buyback Value relationship of what a customer gets goodsservices to what he or she has to pay for it LowPrice Guarantee Policy policy that guarantees that the retailer will have the lowest possible price for a product or group of products and usually promises to match or better any lower price found in the local market Individualized Pricing charging different prices for the same offerings depending on the time season customer or level of demand also known as dynamic pricing MultipleUnit Pricing practice of offering two or more similar products or services for sale at one price also known as quantity discounts Loss Leaders an item priced near or below cost to attract customer traffic into the store Cherry Picking customers visiting a store and buying only merchandise sold at big discounts or buying only the best styles or colors Rain Check when sale merchandise is out of stock a written promise to customers to sell them that merchandise at the sale price when it arrives Integrated Marketing Communications the strategic integration of multiple communication methods to form a comprehensive consistent message Advertising paid communications delivered to customers through nonpersonal mass media such as newspapers television radio direct mail and the internet Freestanding Insert FSI an ad printed at a retailer s expense and distributed as a freestanding insert in the newspaper Preprint same as FSI Spot a local television commercial 42115 15 Event Sponsorship a type of marketing communication for which corporations support various activities usually in the cultural or sports and entertainment sectors Mobile Commerce MCommerce communicating with and even selling to customers through wireless handheld devices such as cell phones and personal digital assistants Weblog same as blog Word of Mouth communications among people about a retailer Communication Objectives speci c goals for a communication program related to the effects of the communication program related to the effects of the communication program on the customer s decisionmaking process CoOp Cooperative Program a program undertaken by a vendor in which the vendor agrees to pay all or part of a promotion for its products Protected Class a group of people such as women or minorities that are treated differently or discriminated against such as when a quali ed woman does not receive a promotion given to a less quali ed man Ala Carte Plans an employee reward program giving employees a choice of rewards and thus tailoring the rewards to the desires of individual employees job Enrichment the redesign of a job to include a greater range of tasks and responsibilities Utilitarian Bene ts a motivation for shopping in which consumers accomplish a speci c task such as buying a suit for a job interview Hedonic Bene ts shopping for pleasure entertainment andor to achieve an emotional or recreational experience Promotional Aisle area aisle or area of a store designed to get the customer s attention Christmas Promotional Area a feature area in a store in which merchandise on sale is displayed DemandDestination Merchandise products that customers have decided to buy before entering the store Bulk Fixture same as rounder Capacity Fixture same as rounder Feature Fixture same as fourway xture Atmospherics the design of an environment through visual communications lighting colors music and scent to stimulate customers perceptual and emotional responses and ultimately to affect their purchase behavior Sentiment Analysis assessments that monitor social media to determine how customers view the rm Mystery Shoppers professional shopper who shops a store to assess the service provided by store employees Empowerment the process of managers sharing power and decisionmaking authority with employees 42115 16 Instrumental Support support for retail service providers such as appropriate systems and equipment to deliver the service desired by customers Emotional Support supporting retail service providers with the understanding and positive regard to enable them to deal with the emotional stress created by disgruntled customers
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