Chapter 16

Question 1

What are the 3 considerations when choosing a retail partner

Answer 1

1. Channel structure
   Degree of vertical integration
   In VMD, retailer automatically (perhaps only) carries integrated producers products
   Apple store only carries apple products
   Strength of manufacturer brand (stronger brand the more likely to be carried)
   Nike is carried in most athletic stores
   Relative power of manufacturer and retailer
   More powerful firm decides if product will be carried
   Walmart decides
2. Customer expectations
   Positions
   Looking at what products are expected in what stores
3. Channel member characteristics
   Looking at the consumers, retailer, distribution, and making of a product
   Larger channel members more likely to perform multiple functions and more efficient, and cheaper

Question 2

What are the 3 levels of distribution intensity

Answer 2

1. Intensive distribution
   As many as possible!
   Convenience goods
   Candy and toothpaste
2. Exclusive distribution
   Only one or very few in each geographic region
   Supports luxury/prestige brand positioning
   Ample supply to store
3. Selective distribution
   Several carefully selected retailers and shopping goods
   Appliances

Question 3

How do we categorize the different types of retailers

Answer 3

Look at food/non-food, quality, quantity, products, and price
Ex. supermarkets (safeway), supercenters (fred meyer), warehouse club (costco), convenience stores (7-11), department stores (Macy’s), full-line discount (target), specialty store (footlocker), drugstores (CVS), category specialist (home depot), extreme-value (dollar store), off-price (ross)

Question 4

What are the 3 extra P’s of retailing

Answer 4

Presentation
What does the atmosphere look and feel like in the store?
Lighting, colors, smells, sounds

Personnel
What type of assistance will employees provide?
How will you train them?

Processes
How will you design your processes to enhance the buying experience and efficiently gather customer information?

Question 5

What is the omnichannel strategy

Answer 5

omnichannel strategy or multichannel strategy Selling in more than one channel (e.g., stores, Internet, catalog).

Question 6

What are the challenges and benefits of using omnichannels

Answer 6

Benefits
Deeper and border selection- no display space needed
Personalization
Online chats and offerings
Expanded market presences for cheap

Challenges
May need to adjust across channels due to different competitions or costs
Must be consistent across channels
How does one integrate operations and supply chain?

Question 7

what is the share of wallet

Answer 7

The percentage of the customer’s purchases made from a particular retailer.