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MKTG 474 Exam 2 Review Guide

by: Eric Hank

MKTG 474 Exam 2 Review Guide MKTG 474

Eric Hank

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About this Document

These notes cover a majority of what will be on the second exam
Retail Policy and Management
Joel Petry
Study Guide
Marketing, retail, Policy, Management
50 ?




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This 6 page Study Guide was uploaded by Eric Hank on Saturday February 27, 2016. The Study Guide belongs to MKTG 474 at Southern Illinois University Edwardsville taught by Joel Petry in Spring 2016. Since its upload, it has received 32 views. For similar materials see Retail Policy and Management in Marketing at Southern Illinois University Edwardsville.


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Date Created: 02/27/16
Exam #2 Study Guide Note: all multiple choice questions will come from items 1-39 on the study guide. The topic for the short answer is listed at the end of the study guide. Multiple Choice Topics: 1. Elements of a retail strategy  Target Market  Segments  Retail Format  Retail mix  Sustainable Competitive Advantage  Not easily duplicated and can be maintained 2. Retail market - A group of consumers with similar needs and a group of retailers that satisfy those needs using a similar retail channel and format. 3. More and less sustainable sources of competitive advantage 4. More Sustainable Less Sustainable 5.  Location  Better computers Retail branding  Customer loyalty  More employees   Customer service  More merchandise  Exclusive merchandise  Greater assortments  Can create an  Low-cost supply chain  Lower prices emotional management  More advertising tie with  Information systems  More promotions customers  Buying power with vendors that build  Cleaner stores their trust and loyalty  Facilitates store loyalty because it stands for a predictable level of quality 6. Strategy elements for building customer loyalty  Retailers build loyalty by:  Developing a strong brand for the store or store brands  Developing clear and precise positioning strategies  Creating an emotional attachment with customers through loyalty programs 7. Cost advantage of building vendor relationships  Low Cost - Efficiency Through Coordination  Electronic Data Interchange (EDI)  Collaborative Planning and Forecasting to Reduce Inventory and Distribution Costs 8. Importance of retail location  What are the three most important things in retailing?  “location, location, location”  Location is a competitive advantage 9. Growth opportunities 10. Keys to success in global retailing  Globally sustainable competitive advantage  Low cost, efficient operations - Wal-Mart, Carrefour  Strong private label brands -Starbucks, KFC  Fashion Reputation - The Gap, Zara, H&M  Category dominance – Best Buy, IKEA, Toys R Us  Adaptability  Global Culture  Financial Resources 11. International market entry strategies 12. Barriers to entry  Scale economies of big box retailers  Service and unique, high-end products of small retailers 13. Competitive rivalry  Defines the frequency and intensity of reactions to actions undertaken by competitors  Conditions leading to intense rivalry: a large number of same size retailers, slow growth, high fixed costs, a lack of perceived differences between competing retailers 14. Inventory turnover  A Measure of the Productivity of Inventory:  It is used to evaluate how effectively retailers utilize their investment in inventory 15. Debt to equity ratio and quick ratio  Debt-Equity Ratio - The retailer’s short- and long-term debt / by the value of the owners’ or stockholders’ equity  Quick Ratio - “acid-test ratio”  (Short-term assets – inventory)/ Short-term liabilities  More stringent test because it removes inventory from the short- term assets.  If a retailer needs cash to pay its short-term liabilities, it cannot rely on inventory to provide an immediate source for cash. 16.Employee engagement - an emotional commitment by an employee to the organization and its goals. 17. Employee branding  Starbucks – “Love What You Do”  Southwest – “Free to Actually Enjoy What You Are Doing” 18. Issues/challenges of HR management  Expense control  Profitable  Little or no experience  More staff, more sales?  Part time employees – less cost  Managing diversity – managing across age groups 19. What is the merchandise division, what does it do?  Buy merchandise  Select, negotiate with, and evaluate vendors  Select merchandise  Place orders  Control merchandise inventory  Develop merchandise budget plans  Allocate merchandise to stores  Review open-to-buy and stock positions  Price merchandise  Set initial prices  Adjust prices 20. Advantages and disadvantages of Disadvantages of Advantages of Centralization Centralization  It is difficult for a  Reduce costs (overhead retailer to adapt to local falls with fewer market conditions managers)  It may have problems  Coordinated buying responding to local achieve lower prices competition and labor from suppliers markets  Opportunity to have the  Personnel policies make it hard for local best people make decisions for the entire managers to pay corporation competitive wages centralization/decentralization 21. Selective hiring  Recruit “the right people”  Simply seeking the best and the brightest may not always be the most effective approach 22. Importance of training  Increasing investments in management training programs and developing leaders  Increasing attention to college graduates 23. Legal issues in human resource management  Equal Employment Opportunity  Protect employees from unfair discrimination in the workplace.  Compensation  40-hour workweek, overtime pay, minimum wage, and employee pensions.  Labor Relations  The process by which unions can be formed and the ways in which companies must deal with the unions. 24.Customer Relationship Management - A business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty with a retailer’s most valuable customers. 25. Share of wallet  Target, Personalize, Service, Promotions 26. 4 steps of the CRM process 27. Privacy concerns with customers sharing information  Control over Collection:  Do customers know what information is being collected?  Do customers feel they can decide upon the amount and type of information collected by retailers?  Control over Use:  Do customers know how the information will be used by the retailer?  Will the retailer share the information with third parties? 28. FTC guidelines for fair information practices Notice and awareness  comprehensive statement about information storage, manipulation, and dissemination Choice/consent  Opt-in and opt-out options Access/participation  Customer able to confirm accuracy Integrity/security  Controls for theft and tampering Enforcement/redress  Mechanism to insure compliance 29. Lifetime value  Estimating Lifetime Value (LTV)  The expected contribution from the customer to the retailer’s profits over his or her entire relationship with the retailer  Use past behaviors to forecast future purchases, the gross margin from these purchases, and the costs associated with serving the customers 30. RFM analysis  Used by catalog retailers and direct marketers  Recency: how recently customers have made a purchase  Frequency: how frequently they make purchases  Monetary: how much they have bought 31. Market Basket Analysis - Data analysis focusing upon the composition of the customer’s market basket – what items are bought during a single shopping occasion?  Adjacencies for displaying merchandise  Joint promotions  Bananas in the cereal aisle as well as in the produce section  Beer with baby diapers  Tissues with cold medicine 32. Levels of the customer pyramid 33. Strategies for dealing with unprofitable customers  Offer less costly approaches for dealing with these customers  Charge customers for extra services demanded


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