Management Module Flashcards
What is retailing?
Retailing is selling goods or services to the consumers. It is about services, fast moving consumer goods, consumer packaged goods, or durable goods.
What are the key traits in retailing lately?
- high technological innovations (AI, robotics, big data)
- demand dynamics are transitioning to omnichannel management
- new format and concepts
- exit strategies: failure of companies not able to adapt to change
What is a channel of distribution?
It is the chain of organisational actors and relationships through with the goods and services are delivered from producers to consumers.
How is cross channel competition dealt with by producers?
- coordination: producers must think about how to coordinate different actors and how to manage relationships along channels and touchpoints
- integration: producers must think about how to integrate different channels and touchpoints
What is a channel?
It is a system of actors and relationships that producers put in place to secure the availability of the merchandise where shoppers buy
Which are the 5 types of flow managed by channels?
- physical goods
- titles/property rights
- payments
- information
- promotion
Which are the most important actors in a channel? What is their role? (briefly)
- Producer: the one manufacturing goods/services
- Wholesaler: buys from producer and sells to retailer or other, in large quantities
- Jobber: wholesaler acting on small scale
- Retailer: buys from producer or wholesaler and sells to final consumers
- Agent: intermediary acting upon mandate from principal. Does not take title.
Which are the managerial practices (3) used in the distribution system?
- consumer marketing: stimuli from producer to customer
- channel management: business practices of manufacturers to reach retailers
- retail marketing: interaction retailers - final consumers
What is the marketing channel approach?
In marketing channel the emphasis is on the transaction, bargaining power, and social exchange relationship between members of a channel and the practices to manage transactions, power and relationships.
It is a win-lose relationship
What is the supply chain approach?
In the supply chain approach the emphasis is on the coordination and integration of operations of the members of a channel. It is a win-win situation.
Which can be the goals between partners in a distribution system?
- pie sharing: different actors seek for sharing overall profitability, maximise one’s own profitability (zero-sum)
- pie enhancing: better cooperation is an opportunity to make the system grow, better opportunity to capture value (win-win)
What is the core function of a channel?
To increase efficiency of the distribution system, by relying on intermediaries that reduce the number of interactions/contacts, negotiations and transactions that buyers and manufacturers need to perform in order to deliver goods and services to final users
Which are the (8) sub functions of the channel?
- distribution (physical flow)
- contact (find and communicate with potential buyers)
- promotion (influence decisions of buyers)
- matching (fit offer to consumer needs)
- negotiation (support interest of buyers)
- financing (cover costs of channel)
- risk taking (take on risk of activity performed)
- information providing (transfer info across different parts)
Which are the dimensions through which channels communicate value?
- Time value: make product available when consumers need it
- Place value: make product available where consumers need it
- Ownership value: give access to products for occasion of usage or store it for future (maintain ownership until customer wants it)
- Tailoring value: pack, tailor, and refine products to adapt them to consumers’ needs
What are necessity goods and what is the focus of the channel in case it sells them?
They are goods with negative correlation with income.
Channels are focused on high volume and low marginality, with intense price promotions to stimulate demand.
What are normal goods and what is the focus of the channel when it sells them?
They are goods for which the higher is the income, the higher is the dedicated portion of budget spent to purchase them.
Channels focus on capillarity to maximise revenues and profits.
What are luxury goods and what is the focus of the channel when it sells them?
They are goods for which there is a positive correlation between price and demand.
Channels are focused on exclusivity, and added value services. No price promotion is implemented.
What is the difference between experience and search goods? What implications does the difference has on the channel?
Experience goods demand experience to be fully evaluated. This implies having a shorter channel, to support a consultive selling approach and to explain added value directly to consumers (consulting selling/direct channel)
Search goods can be fully evaluated during the research phase before the purchase. This means there is no need for strong support of services, and no direct relationship between manufacturers and buyers (indirect channel)
Which are the services provided by wholesalers to manufacturers?
- facilitate large scale production
- reduce burden of storage
- provide useful market info
- protect from risks
- provide financial assistance
- facilitate continuity in production
Which are the services provided by wholesalers to retailers?
- financial assistance
- supply goods by different manufacturers
- reduce burden of storage
- protect from risk
- provide useful market info
Which are the (5) mega trends that characterise the retail industry?
- growth of AI and machine learning
- penetration of augmented reality
- rise of new social media as touchpoints
- tailoring value criticality
- growing role of CSR
Which are the (7) main retail formats?
- specialty store
- department store
- supermarkets
- hypermarkets
- discount stores
- convenience store
- off price retailers
