Session 18 - Place 2

Question 1

What is retailing?

Answer 1

The business activity concerned with the selling of goods/services to ultimate consumers for personal or household use.

It also includes procurement and the design of goods and services

Question 2

Why do manufacturers need retailers?

Answer 2

• it allows a manufacturer to reach many target customers
• Distribute products to customers that customers want and allows customers to purchase products easily
• Distributes the appropriate amount of products

Question 3

WHy do customers need retailers?

Answer 3

• They provide options of merchandise under one roof.
• Allowing access to goods customers might never see
• Providing interesting environments where we spend our leisure time

Question 4

What are the types of value that retailers create?

Answer 4

1. Form Value
2. Time Value
3. Place Value
4. Possession value

Question 5

What is form value?

Answer 5

The utility provided by changing raw materials into a finished product. It is created by production and influenced by marketing.

Question 6

What is time value?

Answer 6

Making the product available when the customer needs it. (e.g. grocery store open 24/7)

Question 7

What is place value?

Answer 7

Making the product available where the customer needs it (banks have branches everywhere)

Question 8

What is possession value?

Answer 8

Enhancing the ability of the customer to acquire and use the product over time.

e.g. Car dealers financing at POS. makes it easier for customer to take possession

Question 9

What is depth vs breadth of product line?

Answer 9

Both describe product assortment

Depth of product line: More depth means the store carries large assortment of each item

Breadth of product line: refers to the variety of different product lines a store carries

Question 10

What are the types of retailers?

Answer 10

Focus on depth more than breadth:

• specialty stores: high price
• Category killers (home depot): low price

focus on breadth more than depth:

• Department store (Macy’s): apparel, furniture, appliances
• Hypermarkets (wal-mart): food, grocery, general merch, largest stores

Question 11

What are the 4 success factors in E-Commerce?

Answer 11

1. ability to control stock on hand
2. Ability to quickly adopt new technology
3. Provision of superior after-sale service
4. Having a loyal customer base

Question 12

What are the benefits of E-commerce?

Answer 12

• “unlimited shelf space”
• Easier to find products that you need
• Recommendation systems
• easy to get data about customers
• target many customers

Question 13

What are disadvantages of e-commerce

Answer 13

• Customers must wait a few days to receive products by mail
• people want touch and feel information before buying
• Security concerns

Question 14

What services are required for retailing?

Answer 14

Delivery, return policy, after-sale services, demonstration, credit card

Question 15

How did surveys affect modern day grocery layout?

Answer 15

1. Frequently bought items in back as walking more to get them causes incidental purchases
2. Begin with produce as good see/feel/smell makes ppl buy more
3. Grocery cart determined amount ppl can shop
4. High profit items on right side as more traffic on that side
5. Froot loops, coca puffs on children’s eye level

Question 16

describe place for retailing

Answer 16

• Large, long-term commitment of resources
• location affects future growth
• local environment may change over time

(Freestanding store vs mall vs shopping center)

Question 17

Describe price and promotion for retailing.

Answer 17

Price: specialty stores (high markup on low volumes) vs discount stores (low markup on high volume)

Promotion: Sales promotion in the store and cooperative advertising/promotion with manufacturers