Chapter 17 Retailing

Question 1

4 Factors Manufacturers consider to establishing Relationship with retailers

Answer 1

1. likelihood the retailer will carry their product
2. In which stores should products be placed (where will target consumers expect to find the product)
3. How many channel functions will it perform and delegate to other channel members
4. How many retails within a region will carry the product

Question 2

Omni channel strategy

Answer 2

Selling in more than one channel (store, catalog, Internet)

Question 3

The larger and more sophisticated the the channel member, the ____ likely it will use ____ ____ ____

Answer 3

more, supply chain intermediaries

Question 4

Distribution intensity is defined as

Answer 4

the number of channel members to use at each level of the marketing channel

Question 5

3 levels of Distribution intensity

I, E, S

Answer 5

1. Intensive distribution - Designed to place products in as many outlets as possible (EXPOSURE)
2. Exclusive distribution - ensures supply (PROTECTION OF MARGINS FOR retailers because there’s no competition)
3. Selective Distribution - Relies on a few selected retail customers in a territory to sell product (MAINTAINS IMAGE and CONTROL flow of merch into area)

Question 6

3 Types of Retailers

F, G, S

Answer 6

Food (4)

General Merchandise (7)

Service

Question 7

4 types of Food Retailers

Answer 7

1. Supermarkets - Conventional (30,000 SKUs), Limited assortment (40% lower price) and extreme value retailers (1,500 SKUs)
2. Supercenters-One stop shopping (Walmart)
3. Convenience stores
4. Warehouse Club - little service (costco)

Question 8

7 Types of General Merchandise Retailers

D, F, S, D, C, E, O

Answer 8

1. Dept Stores - Broad variety, deep assortment
2. Full line Discount Stores - Broad Variety, limited
   service, low prices (Walmart)
3. Specialty stores - Deep/Narrow assortments, sales
   associate expertise
4. Drugstores - Pharmaceuticals (70% of sales), health,
   personal grooming merch (CVS)
5. Category Specialists - Narrow/Deep assortment..Big
   Box retailers or Category killers
6. Extreme Value Retailer - Limited assortment, very low
   prices (Family Dollar
7. Off Price Retailers - Inconsistent assortment of brand
   name merch, significant discount from
   MSRP

Question 9

Retail Strategy using the “Product”

Answer 9

Providing right mix of merch satisfying needs of target market.

Private label brands (store brands)

Exclusive Brands - Supplier and retailer work together
-exclusively offered at one retailer and develop brand equity

Question 10

Retail Strategy using the “Promotion”

Answer 10

Ads in media Store Credit Cards
Ads in direct mail Share of Wallet
Real time promotions via website
M commerce - purchases through mobile devices

Question 11

Share of wallet is

Answer 11

The percentage of customers purchases made from one particular retailer

Question 12

4 issues effective omni-channel retailing

I, B, P, S

Answer 12

1. Integrated CRM - with centralized customer data warehouse, complete history of each customer’s interactions
2. Brand Image - Consistent across all channels
3. Pricing - Pricing consistency for same SKU across channels
4. Supply Chain - separate Internet channels integrated with stores and catalogs