Podcast
Questions and Answers
What is considered to be the most crucial aspect in retailing?
What is considered to be the most crucial aspect in retailing?
What role does advertising play in retailing?
What role does advertising play in retailing?
Which benefit of physical stores allows customers to assess products using all their senses?
Which benefit of physical stores allows customers to assess products using all their senses?
What is cooperative advertising?
What is cooperative advertising?
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How do retailers improve their market presence according to the information provided?
How do retailers improve their market presence according to the information provided?
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Which of the following is NOT a pricing promotion tactic mentioned in retailing?
Which of the following is NOT a pricing promotion tactic mentioned in retailing?
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What does an omnichannel strategy aim to achieve for consumers?
What does an omnichannel strategy aim to achieve for consumers?
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How has technology influenced retail promotions?
How has technology influenced retail promotions?
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What major advantage do traditional stores offer compared to online shopping?
What major advantage do traditional stores offer compared to online shopping?
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Which factor contribute to the competitive advantage of traditional retailers like Starbucks and Zara?
Which factor contribute to the competitive advantage of traditional retailers like Starbucks and Zara?
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What is a benefit of using store credit cards in retailing?
What is a benefit of using store credit cards in retailing?
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What role do sales associates play in traditional retail stores?
What role do sales associates play in traditional retail stores?
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What is a significant characteristic of displays and signs in stores?
What is a significant characteristic of displays and signs in stores?
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Which of the following is NOT a common benefit of shopping in traditional stores?
Which of the following is NOT a common benefit of shopping in traditional stores?
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In what way are mobile devices changing retailing promotions?
In what way are mobile devices changing retailing promotions?
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Why is it important for retailers and manufacturers to coordinate their advertising efforts?
Why is it important for retailers and manufacturers to coordinate their advertising efforts?
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Why are some consumers concerned about their information being collected?
Why are some consumers concerned about their information being collected?
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What is a key benefit of omnichannel retailers over single-channel retailers?
What is a key benefit of omnichannel retailers over single-channel retailers?
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How do in-store kiosks benefit consumers when items are out of stock?
How do in-store kiosks benefit consumers when items are out of stock?
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What is one of the advantages of the catalogue channel for customers?
What is one of the advantages of the catalogue channel for customers?
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What do customers gain by checking gift registries and wish lists via kiosks?
What do customers gain by checking gift registries and wish lists via kiosks?
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What role does loyalty program information play in omnichannel marketing?
What role does loyalty program information play in omnichannel marketing?
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How does omnichannel retailing facilitate market presence for traditional retailers?
How does omnichannel retailing facilitate market presence for traditional retailers?
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What is a common feature of shopping through kiosks?
What is a common feature of shopping through kiosks?
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What is one advantage of in-store shopping compared to online shopping?
What is one advantage of in-store shopping compared to online shopping?
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What advantage does a catalogue provide to consumers?
What advantage does a catalogue provide to consumers?
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How does in-store shopping affect perceived risk for consumers?
How does in-store shopping affect perceived risk for consumers?
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What is a key benefit of the internet channel for retailers?
What is a key benefit of the internet channel for retailers?
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What is a key requirement for effective omnichannel operations?
What is a key requirement for effective omnichannel operations?
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What advantage does deeper selection in internet shopping provide to consumers?
What advantage does deeper selection in internet shopping provide to consumers?
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What challenge do omnichannel retailers face regarding brand image?
What challenge do omnichannel retailers face regarding brand image?
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What is one reason consumers prefer the internet channel for information evaluation?
What is one reason consumers prefer the internet channel for information evaluation?
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How do pricing strategies differ for omnichannel retailers?
How do pricing strategies differ for omnichannel retailers?
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How does multichannel retailing benefit consumers?
How does multichannel retailing benefit consumers?
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What is one limitation of adding electronic channels for retailers?
What is one limitation of adding electronic channels for retailers?
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Which of the following is NOT a benefit of the internet channel mentioned?
Which of the following is NOT a benefit of the internet channel mentioned?
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Which of the following is NOT a challenge omnichannel retailers must address?
Which of the following is NOT a challenge omnichannel retailers must address?
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What is a common misconception about online shopping versus physical stores?
What is a common misconception about online shopping versus physical stores?
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What role does augmented reality play in retail catalogues?
What role does augmented reality play in retail catalogues?
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What expectation do customers have when interacting with omnichannel retailers?
What expectation do customers have when interacting with omnichannel retailers?
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What is a key characteristic of licensing agreements?
What is a key characteristic of licensing agreements?
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Which of the following is a disadvantage of joint ventures?
Which of the following is a disadvantage of joint ventures?
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What advantage do joint ventures offer to companies entering foreign markets?
What advantage do joint ventures offer to companies entering foreign markets?
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Which entry strategy was primarily used by retailers before China's regulations were liberalized in 2005?
Which entry strategy was primarily used by retailers before China's regulations were liberalized in 2005?
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Which factor is typically considered a barrier to entry in joint ventures?
Which factor is typically considered a barrier to entry in joint ventures?
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What potential risk is associated with partnering in a joint venture?
What potential risk is associated with partnering in a joint venture?
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Why might a company choose licensing over joint ventures?
Why might a company choose licensing over joint ventures?
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What is a primary focus when considering global retail market expansion strategies?
What is a primary focus when considering global retail market expansion strategies?
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Study Notes
Distribution Strategy and Trade Marketing
- Course Level: Master 1
- Course Duration: 15 hours of classroom instruction (CM) + 6 hours of tutorials (TD)
- Language: English
- Evaluation:
- In-class activities/Individual assessment (10%)
- Case study presentation (group work) (30%)
- Final exam (60%)
- References:
- Gewal D., Levy M., Lichti S. (2023), Marketing (6th edition) McGraw
- Warren J. Keegan and Mark C. Green (2023), Global Marketing (10th edition). Pearson.
Retailing
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Promotion:
- Retailers and manufacturers understand that good promotion, both in-store and through media, is critical for consumer growth.
- Traditional advertising (newspapers, magazines, TV) remains important to drive customers in-store.
- Electronic communication is increasingly used for promotions.
- In-store displays and signs placed at the point of purchase inform customers, stimulating product purchases.
- Technology is expanding retailer's promotional reach.
- Customers access websites on various devices (computers, mobile devices)
- Many retailers have developed dedicated mobile-friendly websites.
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Cooperative (co-op) advertising: A manufacturer and retailer agree on sharing advertising costs to ensure a cohesive customer message.
- A coordinated effort between the parties helps guarantee the customer message remains consistent.
- Example: Coach for Men works with retailers to ensure a clear message via advertising campaigns.
- Store credit cards and gift cards: Offer more subtle forms of promotion, and also facilitate shopping.
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Retailers might offer:
- coupons
- rebates
- in-store discounts
- online discounts
- buy-one-get-one deals
Retailing (Presentation)
- Store Design and Display:
- Retailers are increasing their investment in store design to promote products and showcase qualities.
- Displays (both in-store and window displays) are increasingly crucial promotional tools.
- Retail store layouts and customer experience must be designed for easy, fast and interesting customer interactions.
- Smart mirrors:
- Retailers such as Neiman Marcus and Nordstrom have introduced smart mirrors to help customers try out outfits.
- Customers can take photos of themselves, view side-by-side images of different outfits and compare them.
Retailing (Theories)
- The Wheel of Retailing: Explains how new retail outlets compete in the market.
- Generally, retailers enter with low prices, low margins, and low status.
- Over time, they add services and improvements, enabling them to raise prices, earn higher margins and achieve a higher status.
- As stores add services, expand offerings and upgrade facilities, the costs increase resulting in higher prices.
- This change creates opportunity entrants at the beginning of the cycle.
Personnel
- Personal selling and customer service representatives are important components of the overall promotional package.
- Retailers should provide services facilitating product purchase and usage.
- Personal selling helps facilitate the sale of complicated, risky or expensive products (e.g., air-conditioning units or diamond rings).
- Example: Seminars conducted by Estée Lauder for sellers are used to sell new cosmetics.
Omnichannel Marketing
- Today's successful retailers focus on providing exceptional value to their best customers.
- Data collection of internet browsing and buying behaviors, along with shopping habits, can be used in customer relationship management (CRM systems).
- Using the collected information, retailers can refine product, pricing and promotion to increase customer purchases from the retailer.
- Retailers need to create a seamless experience across all the touch points.
- Sales associates
- Websites
- Call centers
Place
- Convenient locations are essential for retail success.
- "Location, location, location" is a key retailing consideration.
- Great locations provide competitive advantages difficult to duplicate.
- Example: Zara invests very little in advertising, relying mostly on an excellent location to drive sales.
Omnichannel Marketing - Benefits of Stores For Consumers
- Browsing:
- Shoppers often have a general sense of what they want, but not the specific item.
- Stores are important for physically seeing an assortment of goods to make a buying decision.
- Consumers prefer browsing in stores even though they use online resources.
- Touching and Feeling Products:
- Stores allow customers to interact with products through all five senses.
- This is the biggest advantage of shopping in a physical store.
- Personal service:
- Sales associates have ability to provide meaningful and personalized product information.
- Salespeople are helpful for customers to understand complicated products like electronics.
- Cash and Credit Payments:
- Stores are often the only place where cash transactions happen.
- Customers prefer using cash because it is fast and resolved immediately.
- Entertainment and Social Interaction:
- In-store shopping offers a break from daily routine.
- It's a social opportunity for interacting with others.
- Instant Gratification:
- Stores offer the advantage of getting products immediately.
- Risk Reduction:
- Customers buying in physical stores reduce their perceived risk of purchasing, increasing trust that problems can be addressed.
Omnichannel Marketing - Channels and Benefits
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Stores:
- Browsing
- Touching and feeling
- Personal Service
- Cash and credit payment
- Entertainment and social interaction
- Instant gratification
- Risk reduction
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Kiosks:
- Broader selection than stores
- Access to items online
- Access to wish lists and gift registries
- Access to loyalty program information
-
Catalogues:
- Convenience and safety
- Information
- Particularly useful for the elderly.
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Internet:
- Deeper and broader selection
- More information
- Personalization
- Expanded market presence
Global Retailing Market Expansion Strategies
- Market-entry strategies:
- Organic growth
- Franchising
- Acquisition
- Licensing
- Joint ventures
Trade Marketing
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What is Trade marketing?: A type of business-to-business (B2B) marketing that focuses on distributing products to wholesalers, distributors, and retailers instead of directly to consumers.
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Purpose of Trade marketing: It is a complementary process to drive consumer access to products and improve brand recognition within the supply chain.
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The function of trade marketing: Increasing brand demand across the supply chain, before reaching the actual consumer.
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Benefits of Trade Marketing:
- Guarantees a manufacturer's product will be available in retail stores and have retailer support in promoting the product.
- Increases the sales team behind the product as both retailer and marketer benefit.
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Basic Methods of trade marketing: Focuses on the basics of sales fundamentals: Distribution, Display, Promotion, and Price.
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Trade Marketing Plan
- Map retailers that sell the product
- Understand shoppers via Household panel data and questionnaires
- Develop a Trade Marketing plan using sales fundamentals, such as distribution, pricing, promotion and shelving.
- Identify a category management solution, for example Market development, categories (retail and brands), assortment (ABC analysis), price and promotion, shelving and planograms, shopper data.
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ABC Analysis: Inventory categorization technique that helps in controlling the inventory. A, B, and C items are separated, based on level of inventory control.
Trade Marketing Plan (Initiatives)
- Launch and Initiative Management: Optimizes new initiatives using marketing and sales tools, such as sampling, trial activities, awareness (in-store advertising), new media (e.g., online coupons), and events (PR / emotion).
- Customer Differentiation: Retailers can differentiate through strategies that help the manufacturer win over competitors.
- Shopper Marketing: Identifying the right shopper marketing strategies that helps both shopper and retailers to win with campaigns, relations, and POS claims.
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