Retail and Distribution L7 Flashcards
What is retailing?
All activities directly related to the sale of products to the ultimate end consumer, for personal (non business) use
What does retailing consist of?
- Access
- Search
- Transaction
- Possession
What is retailing store presence?
- Categorised according to presence: store/non store retailing
- Store location (presence) is a source of competitive advantage providing crucial barriers to entry for competitors
- Unique characteristics can be provided such as an experience, services cape and a sensation
What is non store presence?
Retailing activities resulting in transactions that occur away from a fixed store location
- Internet retailing
- Direct selling
- Telemarketing
- Electronic kiosks
Why is location and store presence important?
Where a store is and what it looks + feels like is a source of competitive advantage and a good location can prevent competition.
If you have a physical store, it is important to consider layout and cleanliness etc
What retailer types exist?
- Department stores
- Discount stores
- Convenience stores
- Limited line stores
- Speciality stores
- Category killers
- Supermarket
- Superstores
- Web aggregators
- Web specialists
- Web direct
- Hybrid – web + stores
- Catalogues/mail order
What is push marketing?
Filling up distribution channels (websites, retail stores, wholesalers, direct selling etc) to make product visible and encourage customer to buy it
What is pull marketing?
Advertising, making brands desirable to customers seek the product out
What is a marketing channel?
A network of parties or set of mechanisms through which a product physically moves from the producer to the final customers.
What is a direct marketing channel and an indirect marketing channel?
From the manufacture to the customer, direct channels tend to be small businesses, niche manufacturers. Indirect has more players. Indirect can be very rigid due to contracts which limit flexibility.
Why are marketing intermediaries used?
- To match demand and supply: break bulk, hold stock
- Facilitate exchange - payment in advance/on delivery
- Routine transactions minimise costs
- Facilitate customer search for products
- Generate demand and promote products
- Provide after sales service
- Source of information and feedback
What is the legal status of intermediaries?
Merchants buy stuff and sell to the customer, goods are initially sold to merchants so title is transferred.
Agents are involved in influencing purchase but they never actually own the good. They persuade the consumer to buy a good but have no legal stake.
What are channel design factors?
- Ability to satisfy customer needs
- Cost effectiveness: every step generates cost and thus needs to increase speed of delivery
- Operational efficiency: speed, security, backup, after sales etc
- Coverage of market
- Dominance of market
- Consumer perception
- Choice between what is ideal and what is practical
What affects the models of channel design?
As the number of channel levels increases, the producer’s control over how and to whom the products are sold decreases
What is a benefit of a direct channel structure decision?
Fulfilment - referring to scope, how customers are reached through communication etc
