Chapter 16: Managing Retailing, Wholesaling and Logistics

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Chapter 16: Managing Retailing, Wholesaling and Logistics

  1. 1. TOP 10 Learning Questions for<br />Chapter 16: Managing Retailing, Wholesaling and Logistics<br />Mary Rose R. Mendoza<br />September 23, 2010<br />Marketing Management Class <br /> Prof. Remigio Joseph De Ungria<br />
  2. 2. 1. The following are major types of retailer except _____________.<br />Discount store<br />Department store<br />Catalog showroom<br />Supermarket<br />Brokers and agents<br />2<br />
  3. 3. Major Retail Types<br />Specialty Store<br />Convenience Store<br />Department Store<br />Discount Store<br />Superstore<br />Catalog Showroom<br />Supermarket<br />Off-price Retailer<br />
  4. 4. <ul><li>A retail store is any business enterprise whose sales volume primarily comes from selling goods or services directly to final consumers for personal, nonbusiness use.
  5. 5. Brokers and agents fall under major wholesaler types whose activities involve selling goods or services to those buying for resale or business use. They facilitate buying and selling on a commission of 2% to 6%of the selling price. </li></ul>4<br />A “retailer” sells to <br />final consumers.<br />
  6. 6. 1. The following are major types of retailer except _____________.<br />Discount store<br />Department store<br />Catalog showroom<br />Supermarket<br />Brokers and agents<br />5<br />
  7. 7. 2. ____________is a level of retailer service in which customers are willing to carry out their own locate-compare-select process to save money.<br />6<br />Self-service<br />Self-selection<br />Limited Service<br />Full Service<br />Assisted Service<br />
  8. 8. 7<br />LEVELS OF SERVICE<br />Self-service<br />Customer Carry out his own locate-compare-select process;<br />Customer could Self-Locate or may Ask assistance if needed;<br />Customer Need more information and assistance;<br />Customer Prefer to be waited during locate-compare-select process;<br />Self-selection<br />Limited Service<br />Full service<br />
  9. 9. “LESS” Means “MORE” in Retailing Trends<br /><ul><li>Self-service is the cornerstone of all discount operations. This is a level of service which is adopted by discount stores which prefer to offer lower prices as a bargain for less service.
  10. 10. This approach is in contrast with conventional retail stores which typically increases their prices to cover costs incurred for increased services. </li></li></ul><li>2. ____________is a level of retailer service in which customers are willing to carry out their own locate-compare-select process to save money.<br />8<br />Self-service<br />Self-selection<br />Limited Service<br />Full Service<br />Assisted Service<br />
  11. 11. 3. Avon and Mary Kay Cosmetics are businesses which could be categorized to what type of non-store retailing?<br />Direct marketing<br />Direct selling<br />Network marketing<br />Automatic vending<br />Buying services<br />10<br />
  12. 12. 11<br />Nonstore Retailers<br />Direct Marketing<br />Direct Selling<br />Automatic Vending<br />Buying Service<br />
  13. 13. 12<br />Your Network Works!<br /><ul><li>Direct Selling is a non-retailing category which includes selling door-to-door or at home sales parties.
  14. 14. It is also called multilevel marketing or network marketing, which works by recruiting independent business people who act as distributors. Distributors’ earnings come from percentage sales of their recruits and earnings made from direct sales.</li></li></ul><li>3. Avon and Mary Kay Cosmetics are businesses which could be categorized to what type of nonstore retailing?<br />Direct marketing<br />Direct selling<br />Online marketing<br />Automatic vending<br />Buying services<br />13<br />
  15. 15. 4. Amazon.com & Zappos.com as online retail stores fall into what category of non-store retailing?<br />Direct marketing<br />Direct selling<br />Network marketing<br />Automatic vending<br />Buying services<br />14<br />
  16. 16. 15<br />Nonstore Retailers<br />Direct Marketing<br />Direct Selling<br />Automatic Vending<br />Buying Service<br />
  17. 17. 16<br />Just CLICK your ORDERS<br /><ul><li>Direct Marketing is a nonstore retailing which makes use of telemarketing, television direct-response marketing and electronic shopping.
  18. 18. Online sales are up by about 25% in 2005 in the US as compared to the previous year. More people are becoming more accustomed to shopping on the internet, ordering a variety of goods and services from a wider range of websites.</li></li></ul><li>4. Amazon.com & Zappos.com as online retail stores fall into what category of non-store retailing?<br />Direct marketing<br />Direct selling<br />Online marketing<br />Automatic vending<br />Buying services<br />17<br />
  19. 19. 5. Which service mix includes general information, parking, restaurants, &repairs in a retailer’s customer offerings?<br />Prepurchase services<br />Postpurchase services<br />Customer services<br />Ancillary services<br />Customized services<br />18<br />
  20. 20. 19<br />Service Mix<br />Prepurchase Services<br />Advertising, window display, fitting rooms, fashion shows, trade-ins;<br />Shipping and delivery, gift wrapping, installations, engraving;<br />General information, check cashing, parking, restaurants, rest rooms;<br />Postpurchase Services<br />Ancillary Services<br />
  21. 21. 20<br />What’s Your MIX? DIFFERENTIATE with your SERVICE<br /><ul><li>Ancillary Services is a service mix tool used to differentiate one store from the others by providing additional or supplementary services aside from the main product offering.</li></li></ul><li>5. Which service mix includes general information, parking, restaurants, &repairs in a retailer’s customer offerings?<br />Prepurchase services<br />Postpurchase services<br />Customer services<br />Ancillary services<br />Customized services<br />21<br />
  22. 22. 6. The following are true about retail marketing decisions except _________:<br /> a. Retailers’ target market is moving towards niche markets;<br /> b. Retailers usually mark up cost of goods by a standard percentage;<br /> c. Retailers greatly consider store atmosphere that would match customer motivation; <br /> d. Retailers use wide range of communication tools such as ads, special sales, money-saving coupons, to generate traffic and sales;<br /> e. Retailers select locations that are accessible to target market.<br />22<br />
  23. 23. 23<br />Retailers’ Marketing <br />Decisions<br />Target Market<br />Services<br />Product Assortment<br />Store Atmosphere<br />Procurement<br />Store Activities<br />Prices<br />Communications<br />Locations<br />
  24. 24. 24<br />Keen with the Price Tactics<br /><ul><li>In terms of pricing, retailers usually pay attention to pricing tactics. They could do storewide sales and markdowns on slower-moving merchandise. They could put low prices on some items to serve as traffic builders or loss leaders or to signal their pricing policies. Some discount stores such as Wal Mart adopts everyday low pricing (EDLP) strategy.
  25. 25. On the other hand, it is the wholesalers who usually mark up cost of goods by a standard percentage.</li></li></ul><li>6. The following are true about retail marketing decisions except _________:<br /> a. Retailers’ target market is moving towards niche markets;<br /> b. Retailers usually mark up cost of goods by a standard percentage;<br /> c. Retailers greatly consider store atmosphere that would match customer motivation; <br /> d. Retailers use wide range of communication tools such as ads, special sales, money-saving coupons, to generate traffic and sales;<br /> e. Retailers select locations that are accessible to target market.<br />25<br />
  26. 26. 7. Wal Mart as a discount store falls into what pricing group?<br /> a. high-markup, lower-volume<br /> b. low-markup, higher-volume<br /> c. high-markup, higher-volume<br /> d. low-markup, lower-volume<br /> e. none of the above<br />26<br />
  27. 27. 27<br />Retail Positioning Map<br />Broad<br />Bloomingdale’s<br />Wal Mart<br />Breadth of Product Line<br />Tiffany<br />Sunglass Hut<br />Narrow<br />Value Added<br />High<br />Low<br />
  28. 28. <ul><li>All retailers would want high volumes and high gross margins, but the two don’t usually go together. Most retailers fall into the following price group:
  29. 29. High Mark-up, Lower-Volume (Fine Specialty Stores)
  30. 30. Low Mark-up, Higher-Volume (Mass Merchandisers and Discount Stores)</li></ul>28<br />I want HIGH TURNS x EARNS<br />
  31. 31. a. high-markup, lower-volume<br /> b. low-markup, higher-volume<br /> c. high-markup, higher-volume<br /> d. low-markup, lower-volume<br /> e. none of the above<br />29<br />7. Wal Mart as a discount store falls into what pricing group?<br />
  32. 32. 8. Which of the following is true about private labels?<br /> a. These are unbranded, plainly packaged, less expensive versions of common products.<br /> b. Private labels are usually sold at a higher price due to higher costs on advertising, sales promotion and distribution.<br /> c. Private labels require much investment on R&D to bring out new brands, line extensions, and features.<br /> d. Are also called reseller, store, house or distributor brand developed by retailers and wholesalers.<br /> e. all of the above<br />30<br />
  33. 33. PRIVATE LABEL VS. NATIONAL BRANDS<br /><ul><li>NATIONAL BRANDS
  34. 34. Significant investments on R&D
  35. 35. Investments on “pull” advertising programs</li></ul>PRIVATE LABEL<br />Developed by retailers/wholesalers<br />Shelf space advantage<br />Lower price<br />
  36. 36. What’s on the LABEL?<br /><ul><li>Wal Mart, Tesco, and Marks and Spencer are into developing their own store brands. These brands are also known as private labels.
  37. 37. It is offered to customers at a lower price due to lower costs incurred in production, advertising, sales promotion and distribution.
  38. 38. Retailers and wholesalers have huge advantage in terms of shelf space and price.</li></li></ul><li>8. Which of the following is true about private labels?<br /> a. These are unbranded, plainly packaged, less expensive versions of common products.<br /> b. Private labels are usually sold at a higher price due to higher costs on advertising, sales promotion and distribution.<br /> c. Private labels require much investment on R&D to bring out new brands, line extensions, and features.<br /> d. These are also called reseller, store, house or distributor brand developed by retailers or wholesalers. <br /> e. all of the above<br />33<br />
  39. 39. 9. Which is not a market logistics decision?<br /> a. What optimum number of units to produce?<br /> b. How should orders be handled?<br /> c. Where should stock be located?<br /> d. How much stock should be held?<br /> e. How should goods be shipped?<br />34<br />
  40. 40. 35<br />Market Logistics Decisions<br />ORDER PROCESSING<br />INVENTORY<br />How should orders be handled?<br />How should goods be shipped?<br />How much stock should be held?<br />Where should stock be located?<br />WAREHOUSING<br />TRANSPORTATION<br />
  41. 41. KEYS TO DIFFERENTIATED DISTRIBUTION<br /><ul><li>Order Processing - Companies are trying to shorten order-to-payment cycle or the lapsed time between order’s receipt, delivery and payment to satisfy customers.
  42. 42. Warehousing – Stocking locations of finished goods until they are sold to respond to discrepancies production and consumption cycles.
  43. 43. Inventory – decision-making as to when and how much to order. Costs involved are carrying costs and ordering costs.
  44. 44. Transportation – choices would affect product pricing, on-time delivery performance, condition of goods, and customer satisfaction.</li></li></ul><li>9. Which is not a market logistics decision?<br /> a. What optimum number of units to produce?<br /> b. How should orders be handled?<br /> c. Where should stock be located?<br /> d. How much stock should be held?<br /> e. How should goods be shipped?<br />37<br />
  45. 45. 10. Which statement is not true in determining Optimal Order Quantity?<br /> a. Order-processing cost per unit decreases with number of units ordered<br /> b. Inventory-carrying charges per unit decreases with the number of units ordered<br /> c. Total cost curve is the sum of ordering costs and inventory costs <br /> d. The quantity where the lowest point of the total cost curve is projected is the optimal order quantity<br /> e. None of the above<br />38<br />
  46. 46. DETERMINING OPTIMAL ORDER QUANTITY<br />Total Cost per Unit<br />PRICE PER UNIT<br />Inventory-carrying <br />Cost per unit<br />Order-processing<br />Cost per unit<br />ORDER QUANTITY<br />
  47. 47. REDUCING INVENTORY COSTS? KNOW THE OPTIMAL!<br />Order-processing cost per unit decreaseswith more number of units ordered becausecosts are spread over more units.<br />Inventory-carrying costs per unit increases with more units ordered because each unit remains longer in inventory.<br />These 2 costs are added to find the total cost curve.<br />The lowest point in the total curve is the optimal order quantity.<br />
  48. 48. 10. Which statement is not true in determining Optimal Order Quantity?<br /> a. Order-processing cost per unit decreases with number of units ordered<br />b. Inventory-carrying charges per unit decreases with the number of units ordered<br /> c. Total cost curve is the sum of ordering costs and inventory costs <br /> d. The quantity where the lowest point of the total cost curve is projected is the optimal order quantity<br /> e. None of the above<br />41<br />
  49. 49. TOP 10 Learning Questions for<br />Chapter 16: Managing Retailing, Wholesaling and Logistics<br />Mary Rose R. Mendoza<br />September 23, 2010<br />Marketing Management Class <br /> Prof. Remigio Joseph De Ungria<br />

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