Marketing PlanBy Tara SeitlerThe Gap Company 1.docxinfantsuk
Marketing Plan
By: Tara Seitler
The Gap Company
1
1
Agenda
Current Marketing Situation
Market Description
Product Review
Competitive Review
Distribution Review
SWOT Analysis
Micro-environments
Macro-environments
2
Current Marketing Situation
Market Description
Target Market
Market Targeting strategy
Value proposition – The Gap Company
Consumer behavior
Buyer decision principles
3
Target Market
GAP is a brand-builder.
We create emotional connections with customers around the world through inspiring product design, unique store experiences and compelling marketing.
It’s goal is to simply make it easy for customers to express their personal style throughout their life.
GAP hoped that effective Web initiative could let company to solidify its brand, improve customer relationships, serve markets that could not support a store and cut costs.
Company also believed that going online would attract new customers and steal market share from competitors.
4
Target Market- Segmentation
Target Section of Market
Residential,
Non-residential,
Mobility and
Personal
Buyers Category
Upper middle and upper class individuals
5
Marketing Strategy
Marketing objective is to create a perception in the mind of the customer about the product.
Build image of product as a different product through adopting the strategy of differentiation of porter
Restructure the business
6
Restructure Business
Transform business management focusing on from quantity to profitability
Reduce fixed cost and downsize business structure to fair size
TV set business
Product
Create competitive products on its strength
Cost structure
Thoroughly improve cost structure
Restructuring
Completion of domestic sites integration and acceleration of overseas sites restructuring
7
Pricing Decision and Strategy
Keep Retailer and Customer pricing strategies different
Captive Product Pricing
The company makes its pricing strategies by having the knowledge of its competitor`s pricing
We can include USB connectivity devices
We can include Home Theatre along with
The prices of these accessories are kept relatively than other brands.
8
Sale Strategy
Sale Strategy - Sale Through
Manufacturer whole seller/dealer consumer
Sale Out (Sales To the retailer)
Manufacturer (company) Authorized Dealers
9
Sale Through
Whole seller/retailers are the customers of manufacturers, manufacturers sell their products to the Whole seller and indirectly (through retailer) to the end consumers.
This process of selling is called “Sale Through”
Sale Out :
The company will sell the products to the retailers which are actually the customers of the Company.
There will be no medium used between the company and the retailer.
This procedure of selling is called “Sale Out”
9
Value Proposition
They are predicated value proposition from the mindset of your custome ...
* In an increasingly copy-cat economy, the new basis of competition is business model innovation.
* Unfortunately, the work of business model innovation is too often left undone, at great cost to the organization's longer term growth opportunities and its profitability. This gap is the outcome of marketing's role increasingly being defined around demand generation and brand communications in increasingly fragmented channels, roles that have required many new marketing subspecialties.
* The CMO is ideally suited to facilitate business model strategy decisions, decisions that must be made by the leadership team as a whole.
* Deploying the CMO to facilitate business model innovation will align brand and business strategy, benefiting the success of both.
Marketing PlanBy Tara SeitlerThe Gap Company 1.docxinfantsuk
Marketing Plan
By: Tara Seitler
The Gap Company
1
1
Agenda
Current Marketing Situation
Market Description
Product Review
Competitive Review
Distribution Review
SWOT Analysis
Micro-environments
Macro-environments
2
Current Marketing Situation
Market Description
Target Market
Market Targeting strategy
Value proposition – The Gap Company
Consumer behavior
Buyer decision principles
3
Target Market
GAP is a brand-builder.
We create emotional connections with customers around the world through inspiring product design, unique store experiences and compelling marketing.
It’s goal is to simply make it easy for customers to express their personal style throughout their life.
GAP hoped that effective Web initiative could let company to solidify its brand, improve customer relationships, serve markets that could not support a store and cut costs.
Company also believed that going online would attract new customers and steal market share from competitors.
4
Target Market- Segmentation
Target Section of Market
Residential,
Non-residential,
Mobility and
Personal
Buyers Category
Upper middle and upper class individuals
5
Marketing Strategy
Marketing objective is to create a perception in the mind of the customer about the product.
Build image of product as a different product through adopting the strategy of differentiation of porter
Restructure the business
6
Restructure Business
Transform business management focusing on from quantity to profitability
Reduce fixed cost and downsize business structure to fair size
TV set business
Product
Create competitive products on its strength
Cost structure
Thoroughly improve cost structure
Restructuring
Completion of domestic sites integration and acceleration of overseas sites restructuring
7
Pricing Decision and Strategy
Keep Retailer and Customer pricing strategies different
Captive Product Pricing
The company makes its pricing strategies by having the knowledge of its competitor`s pricing
We can include USB connectivity devices
We can include Home Theatre along with
The prices of these accessories are kept relatively than other brands.
8
Sale Strategy
Sale Strategy - Sale Through
Manufacturer whole seller/dealer consumer
Sale Out (Sales To the retailer)
Manufacturer (company) Authorized Dealers
9
Sale Through
Whole seller/retailers are the customers of manufacturers, manufacturers sell their products to the Whole seller and indirectly (through retailer) to the end consumers.
This process of selling is called “Sale Through”
Sale Out :
The company will sell the products to the retailers which are actually the customers of the Company.
There will be no medium used between the company and the retailer.
This procedure of selling is called “Sale Out”
9
Value Proposition
They are predicated value proposition from the mindset of your custome ...
* In an increasingly copy-cat economy, the new basis of competition is business model innovation.
* Unfortunately, the work of business model innovation is too often left undone, at great cost to the organization's longer term growth opportunities and its profitability. This gap is the outcome of marketing's role increasingly being defined around demand generation and brand communications in increasingly fragmented channels, roles that have required many new marketing subspecialties.
* The CMO is ideally suited to facilitate business model strategy decisions, decisions that must be made by the leadership team as a whole.
* Deploying the CMO to facilitate business model innovation will align brand and business strategy, benefiting the success of both.
51 Types of Marketing Strategies in Use TodayPeter vinosh
An organization's strategy combines all of its marketing goals into one comprehensive plan. A good marketing strategy should be drawn from market research and focus on the product mix in order to achieve the maximum profit and sustain the business. The marketing strategy is the foundation of a marketing plan.
Retail Dictionary: 40 Retail Terms Every Modern Retailer Needs To KnowVend
We love the future. Cloud computing and clever devices are opening up so many awesome possibilities for retailers. All the time there are new toys, technologies and terms. So many terms.
This handy dictionary is designed to keep you up to date with terms you need to look out for, what you need to know to bluff the bank manager with, and what you need to stay one step ahead.
All,In this discussion thread, you are tasked with the selectionAzaleeRutledge285
All,
In this discussion thread, you are tasked with the selection of your 2 companies for the first quiz question for this module.
The quiz for Module 1 consists of 3 essay questions, worth 15 points each.
For the first question:
You are asked to identify 2 unique companies - one that you believe pursues a lowest-cost strategy and another that pursues a differentiation strategy.
Relying on personal knowledge, company annual reports, or articles in newspapers and business periodicals, discuss these companies' competitive strategies.
In this discussion thread, you will share with the class the 2 companies you have selected for your analysis. Each student is expected to select 2 unique companies - in other words, each company can be used only once for the question. So my suggestion is to select early and post here - the first student who selects the company will be allowed the use of that company. At that point, different companies must be selected.
student 1
A company that pursues the lowest-cost strategy would be Walmart, which I am sure comes to everyone's mind when thinking about this topic. If you are looking to buy products at the lowest price possible, Walmart is where to go. They can offer their products at “Everyday Low Prices” just as their slogan suggests on a large scale. Walmart can keep their prices low by the enormous volume of sales and the large customer base. Walmart cost-effectively manages its supply chain. “Supply chain management based on electronic product information, vendor role in distribution, and layout of warehouses: Walmart has a supply chain system that is regarded in multiple quarters as one of the most technologically advanced and efficient” (Hyde, 2018). In my opinion, Walmart sometimes has a bad reputation for not being the nicest looking or lacking cashiers, but that does not seem to matter as the price seems to drive their sales and people are taking advantage of their prices and products. I believe the growth for e-commerce will only help their sales and keep them on the top as a company that offers the lowest prices around.
A company that comes to mind that pursues the differentiation strategy is Chipolte Mexican Grill. Their number one focus is the quality of the ingredients that go into their food. Chipolte will not have the cheapest fast food but it will have the best quality ingredients compared to its competitors. According to Herosmyth (2020), Chipolte uses local and sustainable ingredients and pride’s itself in working with family farmers that are located within a 130-mile radius of each restaurant location. They also offer non-GMO ingredients that help them stick out from the rest. As their food is not the cheapest, their differentiation strategy is working as they are one of the top Mexican fast-food restaurants in the US.
Compensation professionals that utilize the differentiation strategy need to focus on their client’s needs and beliefs to be successful as the cost of th ...
at least 2 references in each peer responses! I noticed .docxcockekeshia
at least 2 references in each peer responses!
I noticed that there are many proposed policies on the agenda that are related to healthcare. Some of them are specific to the nursing practice. This creates the opportunity for the nurse to advocate for policies that impact nursing and healthcare directly by providing first-hand accounts and professional opinions supported by research. Nurses have insight on issues, such as patient safety and satisfaction, health disparities, access to care, and promoting positive outcomes (Abood, 2016).
The problem is that some nurses are unable to navigate through the politics of regulation and policy (Abood, 2016). This can create a challenge and become discouraging for nurses looking to make an impact or promote an agenda (Abood, 2016). Nurses can overcome this difficulty by participating in internships and workshops that provide the opportunity for a nurse to learn about the legislative process and the current issues being discussed (Abood, 2016). Understanding the political process is an essential method for effectively advocate for an issue. Nurses have to learn to play the game to promote change or obtain the scarcely rationed funding available.
According to Milstead and Short (2019), key opportunities to advocate for policy lies in knowledge and perception. Being knowledgeable on an issue can increase your influence as an advocate. Perception is a significant key in politics. Being perceived as a valuable collaborator or obtaining the support of a mentor that is respected can help push your agenda (Milstead & Short, 2019). Networking plays a significant role in politics. being introduced respected mentor or partner can help a nurse gain influence with rallying for support of a proposed agenda (Milstead & Short, 2019).
Probably the most significant opportunity for a nurse to advocate for a policy comes with becoming a member of a nursing association. Nurses associations like the American Nurses Association (ANA) are set up with the mission of influencing policy and advocating for the nurses and patients (ANA, 2019). The strength lies in numbers with the nursing association. Many of these organizations have built relationships with politicians and political parties to gain influence to support their agendas. For example, the ANA tends to favor and support democratic candidates (Milstead & Short, 2019). Nurses associations have enough members to get the attention of lawmakers. However, the nurse still has to task of advocating within the association to gain support from its members.
.
At least 2 pages longMarilyn Lysohir, an internationally celebra.docxcockekeshia
At least 2 pages long
Marilyn Lysohir, an internationally celebrated ceramic artist, started Cowgirl Chocolates to provide some funding support for a yearly published arts magazine, High Ground, that she and her husband, Ross Coates, started in 1995. Her love of chocolates and hot and spicy foods spurred the idea of making hot and spicy chocolates to be sold in creative, artistic tins and packaging, which she labeled Cowgirl Chocolates. Her small business, begun in 1997, had won a number of awards in fiery food competitions. While Cowgirl Chocolates had grown steadily over its four years in business, it still had only generated $30,000 in sales revenue in 2000, which was not enough to cover expenses. Marilyn had drained much of her personal savings to keep Cowgirl Chocolates in business. Her cash accounting methods and record keeping were not very sophisticated although she seemed to have a good sense of her costs in production and raw materials and the packaging. However, Marilyn had taken a shotgun approach to most of her marketing efforts and had tried a number of activities to increase product demand. She allowed herself to make one risky financial move each year in her pursuit of profitability and increased sales. She had just made her one risky move for year 2001: She had taken out a full-page ad in Chile Pepper magazine for $3,000.
Questions
1. The suggested retail price and wholesale prices of Cowgirl Chocolates products are displayed in Exhibit 2 (p. 491) along with the product and packaging costs. Based on this information, discuss the relative merits of using a cost-based, demand-based, and competition-based pricing method. (50 points)
2. What are four (4) options that Cowgirl Chocolates may consider as far as pricing? What would you recommend? (50 points)
.
At least 2 citations. APA 7TH EditionResponse 1. TITop.docxcockekeshia
At least 2 citations. APA 7TH Edition
Response 1. TI
Top of Form
Dr. Joubert and colleagues, the study of leadership has developed, giving forth new theories and structures that explore the description of what it means to be a leader, and how to carry out the same effect. It would be pragmatic to note that one is not made a leader by a job title but through practical impact in. The situational theory is one such theory that can be effective in the medical field. This theory, often referred to as the Hersey-Blanchard situational leadership theory, suggests that no single leadership theory style is the best. However, Researchers and developers of leadership theories have not agreed on the leadership theories (Duggan et al., 2015)
.
Nursing leadership is a multidimensional concept. The nursing profession involves role model leaders that can transform their environment and leading their teams to succeed by overcoming obstacles. Situational leadership requires the leader to transform their leadership style to meet the followers' leadership needs (Marshall & Broome, 2017). Developing a single satisfying leadership theory has become problematic due to these phenomena. Leadership style has a direct impact on the quality of care administered by the nurse team. The leadership style defines the quality of the relationship between the leader and the followers and sets the tone and mood of the work environment (Laureate Education, 2018).
Our director of nursing practice a contingency leadership style. Aware of the different dispositions on our team, she treats each nurse based on their abilities and needs. At times, she exercises Laissez-fair leadership, dictatorial, transformational, democratic, and other transformational styles. I was amazed by the approach. It helped to manage the team. For instance, the recalcitrant nurse received warnings, punishment for mistakes, and reward for an excellent performance. These restrained her actions and caused her to develop positive behaviors and care towards patients.
In Addition to the application of situational leadership style, she had leadership characteristics such as charisma, honesty, communication skills, creativity, innovativeness, decision-making, and integrity. Combination of the style and the qualities facilitated leading our team initiatives. to create a leader that we were all revered. According to Calderon-Mafud and Pando-Moreno (2018), organizations experience cultures of flexibility, social support, innovation, an also increased personal confidence, and openness to change. Furthermore, the implementation of an authentic leadership style mostly behaved as a middleman in the organization as it increased work productivity, helped implement staff engagement, and improving job satisfaction.
References
Calderon-Mafud, J. L., & Pando-Moreno, M. (2018). Role of authentic leadership in
organizational socialization and work engagement among workers.
Psychology
, 9, 46-62. doi:10.4236/psych.2018.91.
At each decision point, you should evaluate all options before selec.docxcockekeshia
At each decision point, you should evaluate all options before selecting your decision and moving throughout the exercise. Before you make your decision, make sure that you have researched each option and that you evaluate the decision that you will select. Be sure to research each option using the primary literature.
.
At an elevation of nearly four thousand metres above sea.docxcockekeshia
A
t an elevation of nearly four thousand metres above sea
level, Comitancillo, a province in northwestern Guate
mala, was a formidable place to farm. The air was thin
and cold. I followed Rosa towards her home along a
well-trodden path on the side of the mountain. My lungs were
crying for oxygen, overworking like moth wings. Maya-Mam
communities had lived on these barren slopes in northwestern
Guatemala for nearly five hundred years. Before the arrival
of the Spanish in the 1500s, the Mam splintered off from the
Mayan Empire, which had chased them off the lush green flats
and up into the Sierra Madre. Looking down the mountainside,
I witnessed how the Mam adapted to live on their mountain
fortress: they'd carved steps into the mountainside, thousands
of terraces that cascaded down to the bottom of the valley. I
was awestruck by such architecture. "We've been cultivating la
milpa for hundreds of years," said Rosa. Milpa was a Spanish
word that summed up the three crops that had sustained the
Mam for centuries: maize, beans, and squash. Planting all three
crops together formed a sacrosanct principle of Mam farming.
The Mam were one of twenty-four indigenous cultures in
Guatemala, a country where nearly 50 per cent of the popu
lation were indigenous people, most of whom dwelled in rural
areas and depended on subsistence and small-scale agricul
ture for survival. Despite having a near majority of indigenous
people comprising its population, the country had never elected
an indigenous president. The mestizo elite owned politics and
power in Guatemala, while the Mam formed only a minus
cule fraction of the country's population. Marginalized to the
mountains in the northwest, they survived on growing food and
grazing livestock. Traditionally, men played a larger role in farm
management while women were responsible for grazing sheep,
grinding maize, cooking, cleaning, and nurturing the family.
The dusty husks of the harvest and the season past dried in
the slanted fields on the mountainsides. The bright sun caught
and illuminated their yellow leftovers into gold. Nothing
would be wasted on the mountains. Rosa would harvest the
dried crops for pig and sheep feed.
GUATEMALA 31
"Our seeds are hardy and meant for these mountains. The
seeds people try to sell us don't do well in Comitancillo. They
grow and the wind breaks them."
Years of living on the mountains had also ground Rosa into a
hardy woman. The fifty-year-old woman barely reached five feet.
She wore a striking turquoise blue huipil, a traditional blouse,
embroidered with magenta flowers. She parted her long black
hair in the middle and braided it down her back in a single
rope. Rosa was a widow. Her husband had died twelve years
earlier after falling from the rickety scaffolding on a construc
tion site and quickly dying of his injuries. He'd been working
as a migrant labourer in Xela, a city situated in one of the valley
flats, nearly th.
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51 Types of Marketing Strategies in Use TodayPeter vinosh
An organization's strategy combines all of its marketing goals into one comprehensive plan. A good marketing strategy should be drawn from market research and focus on the product mix in order to achieve the maximum profit and sustain the business. The marketing strategy is the foundation of a marketing plan.
Retail Dictionary: 40 Retail Terms Every Modern Retailer Needs To KnowVend
We love the future. Cloud computing and clever devices are opening up so many awesome possibilities for retailers. All the time there are new toys, technologies and terms. So many terms.
This handy dictionary is designed to keep you up to date with terms you need to look out for, what you need to know to bluff the bank manager with, and what you need to stay one step ahead.
All,In this discussion thread, you are tasked with the selectionAzaleeRutledge285
All,
In this discussion thread, you are tasked with the selection of your 2 companies for the first quiz question for this module.
The quiz for Module 1 consists of 3 essay questions, worth 15 points each.
For the first question:
You are asked to identify 2 unique companies - one that you believe pursues a lowest-cost strategy and another that pursues a differentiation strategy.
Relying on personal knowledge, company annual reports, or articles in newspapers and business periodicals, discuss these companies' competitive strategies.
In this discussion thread, you will share with the class the 2 companies you have selected for your analysis. Each student is expected to select 2 unique companies - in other words, each company can be used only once for the question. So my suggestion is to select early and post here - the first student who selects the company will be allowed the use of that company. At that point, different companies must be selected.
student 1
A company that pursues the lowest-cost strategy would be Walmart, which I am sure comes to everyone's mind when thinking about this topic. If you are looking to buy products at the lowest price possible, Walmart is where to go. They can offer their products at “Everyday Low Prices” just as their slogan suggests on a large scale. Walmart can keep their prices low by the enormous volume of sales and the large customer base. Walmart cost-effectively manages its supply chain. “Supply chain management based on electronic product information, vendor role in distribution, and layout of warehouses: Walmart has a supply chain system that is regarded in multiple quarters as one of the most technologically advanced and efficient” (Hyde, 2018). In my opinion, Walmart sometimes has a bad reputation for not being the nicest looking or lacking cashiers, but that does not seem to matter as the price seems to drive their sales and people are taking advantage of their prices and products. I believe the growth for e-commerce will only help their sales and keep them on the top as a company that offers the lowest prices around.
A company that comes to mind that pursues the differentiation strategy is Chipolte Mexican Grill. Their number one focus is the quality of the ingredients that go into their food. Chipolte will not have the cheapest fast food but it will have the best quality ingredients compared to its competitors. According to Herosmyth (2020), Chipolte uses local and sustainable ingredients and pride’s itself in working with family farmers that are located within a 130-mile radius of each restaurant location. They also offer non-GMO ingredients that help them stick out from the rest. As their food is not the cheapest, their differentiation strategy is working as they are one of the top Mexican fast-food restaurants in the US.
Compensation professionals that utilize the differentiation strategy need to focus on their client’s needs and beliefs to be successful as the cost of th ...
at least 2 references in each peer responses! I noticed .docxcockekeshia
at least 2 references in each peer responses!
I noticed that there are many proposed policies on the agenda that are related to healthcare. Some of them are specific to the nursing practice. This creates the opportunity for the nurse to advocate for policies that impact nursing and healthcare directly by providing first-hand accounts and professional opinions supported by research. Nurses have insight on issues, such as patient safety and satisfaction, health disparities, access to care, and promoting positive outcomes (Abood, 2016).
The problem is that some nurses are unable to navigate through the politics of regulation and policy (Abood, 2016). This can create a challenge and become discouraging for nurses looking to make an impact or promote an agenda (Abood, 2016). Nurses can overcome this difficulty by participating in internships and workshops that provide the opportunity for a nurse to learn about the legislative process and the current issues being discussed (Abood, 2016). Understanding the political process is an essential method for effectively advocate for an issue. Nurses have to learn to play the game to promote change or obtain the scarcely rationed funding available.
According to Milstead and Short (2019), key opportunities to advocate for policy lies in knowledge and perception. Being knowledgeable on an issue can increase your influence as an advocate. Perception is a significant key in politics. Being perceived as a valuable collaborator or obtaining the support of a mentor that is respected can help push your agenda (Milstead & Short, 2019). Networking plays a significant role in politics. being introduced respected mentor or partner can help a nurse gain influence with rallying for support of a proposed agenda (Milstead & Short, 2019).
Probably the most significant opportunity for a nurse to advocate for a policy comes with becoming a member of a nursing association. Nurses associations like the American Nurses Association (ANA) are set up with the mission of influencing policy and advocating for the nurses and patients (ANA, 2019). The strength lies in numbers with the nursing association. Many of these organizations have built relationships with politicians and political parties to gain influence to support their agendas. For example, the ANA tends to favor and support democratic candidates (Milstead & Short, 2019). Nurses associations have enough members to get the attention of lawmakers. However, the nurse still has to task of advocating within the association to gain support from its members.
.
At least 2 pages longMarilyn Lysohir, an internationally celebra.docxcockekeshia
At least 2 pages long
Marilyn Lysohir, an internationally celebrated ceramic artist, started Cowgirl Chocolates to provide some funding support for a yearly published arts magazine, High Ground, that she and her husband, Ross Coates, started in 1995. Her love of chocolates and hot and spicy foods spurred the idea of making hot and spicy chocolates to be sold in creative, artistic tins and packaging, which she labeled Cowgirl Chocolates. Her small business, begun in 1997, had won a number of awards in fiery food competitions. While Cowgirl Chocolates had grown steadily over its four years in business, it still had only generated $30,000 in sales revenue in 2000, which was not enough to cover expenses. Marilyn had drained much of her personal savings to keep Cowgirl Chocolates in business. Her cash accounting methods and record keeping were not very sophisticated although she seemed to have a good sense of her costs in production and raw materials and the packaging. However, Marilyn had taken a shotgun approach to most of her marketing efforts and had tried a number of activities to increase product demand. She allowed herself to make one risky financial move each year in her pursuit of profitability and increased sales. She had just made her one risky move for year 2001: She had taken out a full-page ad in Chile Pepper magazine for $3,000.
Questions
1. The suggested retail price and wholesale prices of Cowgirl Chocolates products are displayed in Exhibit 2 (p. 491) along with the product and packaging costs. Based on this information, discuss the relative merits of using a cost-based, demand-based, and competition-based pricing method. (50 points)
2. What are four (4) options that Cowgirl Chocolates may consider as far as pricing? What would you recommend? (50 points)
.
At least 2 citations. APA 7TH EditionResponse 1. TITop.docxcockekeshia
At least 2 citations. APA 7TH Edition
Response 1. TI
Top of Form
Dr. Joubert and colleagues, the study of leadership has developed, giving forth new theories and structures that explore the description of what it means to be a leader, and how to carry out the same effect. It would be pragmatic to note that one is not made a leader by a job title but through practical impact in. The situational theory is one such theory that can be effective in the medical field. This theory, often referred to as the Hersey-Blanchard situational leadership theory, suggests that no single leadership theory style is the best. However, Researchers and developers of leadership theories have not agreed on the leadership theories (Duggan et al., 2015)
.
Nursing leadership is a multidimensional concept. The nursing profession involves role model leaders that can transform their environment and leading their teams to succeed by overcoming obstacles. Situational leadership requires the leader to transform their leadership style to meet the followers' leadership needs (Marshall & Broome, 2017). Developing a single satisfying leadership theory has become problematic due to these phenomena. Leadership style has a direct impact on the quality of care administered by the nurse team. The leadership style defines the quality of the relationship between the leader and the followers and sets the tone and mood of the work environment (Laureate Education, 2018).
Our director of nursing practice a contingency leadership style. Aware of the different dispositions on our team, she treats each nurse based on their abilities and needs. At times, she exercises Laissez-fair leadership, dictatorial, transformational, democratic, and other transformational styles. I was amazed by the approach. It helped to manage the team. For instance, the recalcitrant nurse received warnings, punishment for mistakes, and reward for an excellent performance. These restrained her actions and caused her to develop positive behaviors and care towards patients.
In Addition to the application of situational leadership style, she had leadership characteristics such as charisma, honesty, communication skills, creativity, innovativeness, decision-making, and integrity. Combination of the style and the qualities facilitated leading our team initiatives. to create a leader that we were all revered. According to Calderon-Mafud and Pando-Moreno (2018), organizations experience cultures of flexibility, social support, innovation, an also increased personal confidence, and openness to change. Furthermore, the implementation of an authentic leadership style mostly behaved as a middleman in the organization as it increased work productivity, helped implement staff engagement, and improving job satisfaction.
References
Calderon-Mafud, J. L., & Pando-Moreno, M. (2018). Role of authentic leadership in
organizational socialization and work engagement among workers.
Psychology
, 9, 46-62. doi:10.4236/psych.2018.91.
At each decision point, you should evaluate all options before selec.docxcockekeshia
At each decision point, you should evaluate all options before selecting your decision and moving throughout the exercise. Before you make your decision, make sure that you have researched each option and that you evaluate the decision that you will select. Be sure to research each option using the primary literature.
.
At an elevation of nearly four thousand metres above sea.docxcockekeshia
A
t an elevation of nearly four thousand metres above sea
level, Comitancillo, a province in northwestern Guate
mala, was a formidable place to farm. The air was thin
and cold. I followed Rosa towards her home along a
well-trodden path on the side of the mountain. My lungs were
crying for oxygen, overworking like moth wings. Maya-Mam
communities had lived on these barren slopes in northwestern
Guatemala for nearly five hundred years. Before the arrival
of the Spanish in the 1500s, the Mam splintered off from the
Mayan Empire, which had chased them off the lush green flats
and up into the Sierra Madre. Looking down the mountainside,
I witnessed how the Mam adapted to live on their mountain
fortress: they'd carved steps into the mountainside, thousands
of terraces that cascaded down to the bottom of the valley. I
was awestruck by such architecture. "We've been cultivating la
milpa for hundreds of years," said Rosa. Milpa was a Spanish
word that summed up the three crops that had sustained the
Mam for centuries: maize, beans, and squash. Planting all three
crops together formed a sacrosanct principle of Mam farming.
The Mam were one of twenty-four indigenous cultures in
Guatemala, a country where nearly 50 per cent of the popu
lation were indigenous people, most of whom dwelled in rural
areas and depended on subsistence and small-scale agricul
ture for survival. Despite having a near majority of indigenous
people comprising its population, the country had never elected
an indigenous president. The mestizo elite owned politics and
power in Guatemala, while the Mam formed only a minus
cule fraction of the country's population. Marginalized to the
mountains in the northwest, they survived on growing food and
grazing livestock. Traditionally, men played a larger role in farm
management while women were responsible for grazing sheep,
grinding maize, cooking, cleaning, and nurturing the family.
The dusty husks of the harvest and the season past dried in
the slanted fields on the mountainsides. The bright sun caught
and illuminated their yellow leftovers into gold. Nothing
would be wasted on the mountains. Rosa would harvest the
dried crops for pig and sheep feed.
GUATEMALA 31
"Our seeds are hardy and meant for these mountains. The
seeds people try to sell us don't do well in Comitancillo. They
grow and the wind breaks them."
Years of living on the mountains had also ground Rosa into a
hardy woman. The fifty-year-old woman barely reached five feet.
She wore a striking turquoise blue huipil, a traditional blouse,
embroidered with magenta flowers. She parted her long black
hair in the middle and braided it down her back in a single
rope. Rosa was a widow. Her husband had died twelve years
earlier after falling from the rickety scaffolding on a construc
tion site and quickly dying of his injuries. He'd been working
as a migrant labourer in Xela, a city situated in one of the valley
flats, nearly th.
At a minimum, your outline should include the followingIntroducti.docxcockekeshia
At a minimum, your outline should include the following:
Introduction
Identify the topic
What makes this a global ethical dilemma
Why we should care about this
Thesis statement
Rationale for one side of dilemma
Evidence based support #1 (reason and resource)
Evidence based support #2 (reason and resource)
Evidence based support #3 (reason and resource)
Rationale for the OTHER side of the dilemma (at least three points)
Evidence based support #1 (reason and resource)
Evidence based support #2 (reason and resource)
Evidence based support #3 (reason and resource)
Compare this issue in different countries
Identify country #1 and how they view/experience this issue
Identify country #2 and how they view/experience this issue
Identify country #3 and how they view/experience this issue
Conclusion
References
Compose your work in a .doc or .docx file
.
At least 500 wordsPay attention to the required length of these.docxcockekeshia
At least 500 words
Pay attention to the required length of these assignments. These assignments consist of reading a newspaper article about a designated region of the world--specific for each assignment--and writing an essay about it.
Primary sources are documents or other materials such as photographs, art work, coins, tapestries, etc. produced at the time period under consideration. https://library.uncw.edu/guides/finding_primary_sources is a website that gives information on what a primary source is and how historians [or anyone writing about history] use them. Look at the attached file for questions to ask of any source that you would consider a primary source.
For these newspaper article and extra credit assignments you are to find a substantive newspaper article [most newspapers are available online--it must be from a newspaper, not a website only or cablenews organization--NOT yahoonews, not cnn.com, not foxnews, not msnbc--only a published newspaper.] about the region designated for that assignment. If the article you choose is too short you will have trouble doing the assignment. Also, note that if an article is about birds, or insects or any non-human source that is not connected to humanity, it is not appropriate for this assignment. Any good newspaper article is based on sources, which historians would designate as primary sources. So an important part of these assignments is to identify the primary sources used by the author of the article you choose. Primary sources are the building blocks of history. You can think of them like eyewitness accounts or physical evidence produced at the time of an incident or crime being considered in a courtroom proceeding or trial. Without evidence a jury couldn’t make a fair decision in a case. In the same way, without primary sources, history cannot be written--and good newspaper articles cannot be written. So part of this assignment is asking you to decide if the reporter writing the article you select has actually used good primary sources. Does he or she have real evidence and enough of it to write the article? Does the reporter have a particular viewpoint or bias? Could you imagine the article being used as a primary source by a historian in the future for writing history about this time period? How useful would the document be and does it have any weaknesses or drawbacks as a piece of evidence? What else might a historian need, besides the article you are analyzing, to give a more complete or balanced discussion of the topic?
Your assignments will be graded on:
Formatting: 1 inch margins; your name, course number & assignment number [first, second or third] on top of first page. No other information is needed for a heading, and no repeat headers allowed. Following this formatting, cite the author(s) of the article, the title of the article, the name of the newspaper in which it appears [the title of the newspaper should be underlined] and the date of its publi.
At a generic level, innovation is a core business process concerned .docxcockekeshia
At a generic level, innovation is a core business process concerned with renewing what the
organization offers the world and the ways in which it creates and delivers that offering. And
to do this they all need to carry out these activities:
• Searching – scanning the environment (internal and external) for, and processing relevant signals about, threats and opportunities for change.
• Selecting – deciding (on the basis of a strategic view of how the enterprise can best
• develop) which of these signals to respond to
• Implementing – translating the potential in the trigger idea into something new and launching it in an internal or external market. Making this happen is not a single event but requires attention to:
Acquiring the knowledge resources to enable the innovation (for example, by creating something new through R&D, market research, etc., acquiring knowledge from elsewhere via technology transfer, strategic alliance, etc.).
Executing the project under conditions of uncertainty which require extensive problem-solving.
Launching the innovation and managing the process of initial adoption
Sustaining adoption and use in the long-term – or revisiting the original idea and modifying it – reinnovation.
Learning – enterprises have (but may not always take) the opportunity to learn from progressing through this cycle so that they can build their knowledge base and can improve the ways in which the process is managed.
But they differ widely in the ways in which this is done and the importance of different elements.
In this exercise pick a sector – e.g. food retailing, airlines, chemicals, public administration – and draw a map of their particular version of this process. How does it work out in practice? Where are they likely to need or to place most emphasis?
.
Asymmetric Cryptography•Description of each algorithm•Types•Encrypt.docxcockekeshia
Asymmetric Cryptography•Description of each algorithm•Types:•Encryption•Digital Signature•Hashing Function•Key Distribution•Strengths/weaknesses of each algorithm•Relevant examples of modern applications/industry that utilize each algorithm•Public Key Infrastructure•Define•Discuss the components•How is it used with asymmetric cryptography
.
Astronomy HWIn 250-300 words,What was Aristarchus idea of the.docxcockekeshia
Astronomy HW/
In 250-300 words,
What was Aristarchus idea of the phases of Venus, and at that time when he presented his information was it rejected/ was it a big issue/ or did the issue never come up?
This has to be 100% original. I will check for plagirium. Furthermore, when after answering you can put your own input on why was it a big issue, or why do you think the issue never came up when Aristarchus present the idea of the phases of Venus.
If you cite something/someone, you have to make a reference page. And do the cited in MLA format.
.
Astronomy ASTA01The Sun and PlanetsDepartment of Physic.docxcockekeshia
Astronomy ASTA01:
The Sun and Planets
Department of Physical & Environmental Sciences,
UTSC
Fall 2018
Problem Set 3
DUE: Tuesday November 13, 2018
Where: Hand in your solutions in the mailbox marked for your tutorial,
on the 5th floor corridor of the Science Wing, near office SW506C in the
Physics & Astrophysics section.
Reminder: Write your name on your solutions. Also make sure you
carefully read the entire problem set policy that was distributed on
Quercus. It will help you avoid standard mistakes and score higher. We will
assume that you have read this policy document by the time you return your
solution.
How to write your solutions: Be precise and clear. Explain what you
are calculating. The method of calculation you adopt and your reasoning are
the most important. In case of a computational mistake, you will still get
credits if your method is right, so explain it clearly.
1
1. If the Solar System had formed right after the Big Bang, it would
have lacked oxygen (O), and therefore water (H2O). Using the solar
nebula theory, describe what would have been most different about
the planet formation process and the planets formed in this alternative
Solar System. [NO MORE than 15 sentences].
2. Halley’s comet is the only-naked eye comet that might appear twice in
a human lifetime (since it comes back every 76 years).
(a) Based on this comet’s orbital period, would you say that it is more
likely to have originated from the Kuiper belt or from the Oort
cloud? [A quantitative answer is expected to justify your choice]
(b) What other orbital feature, besides the comet’s orbital period,
could be used to distinguish its origin [NO MORE than 5 sen-
tences]
3. (a) Collect data on the mass and radius of Earth (made of rock) &
Jupiter (made of gas) and calculate the overall average density of
each planet, expressed in g/cm3.
(b) The density of water that we drink is about 1 g/cm3. Use your
everyday experience to describe the difference in density between
rock, air, and water. [State your answers in terms of “much
more/much less” or “a little more/a little less”].
(c) Is the mean density of Earth consistent with our everyday experi-
ence of similar composition material? What about Jupiter (same
question)?
(d) Propose a physical mechanism that might explain the discrepancy
between the mean density of a planet and the density of similar
composition material as we experience it in our everyday life.
4. Mean-motion resonances with Jupiter shape the Kirkwood gaps in the
main asteroid belt. A resonance written as “5:2” refers to the inner
body completing exactly 5 orbital revolutions when the outer body
completes exactly 2.
(a) Using Kepler law, find the orbital radius in AU of the following
important resonances for the Kirkwood gaps: 2:1, 3:1 and 5:2.
Compare your values to those shown in the diagram on Kirkwood
gaps in the class lectures (see lecture 12 slides).
(b) High-value mean-motion resonances, such as 2001:1000, are usu-
ally co.
Astronomers have been reflecting laser beams off the Moon since refl.docxcockekeshia
Astronomers have been reflecting laser beams off the Moon since reflectors were left there by Apollo astronauts. This has resulted in the conclusion that the Moon is moving away from the Earth at a rate of 3.8 cm per year. Discuss the specific cause of what is making the Moon recede, the likely end result for the Earth-Moon system, and what you think this might mean for life on Earth.
.
A strategic plan to inform emerging fashion retailers
about social media research and best practices.
2
Proposal Overview
Social media can take the form of various outlets, including, but not limited to: Instagram,
Facebook, Twitter, Tumblr, YouTube, etc. Each social media platform has its specific use and
benefits, with a wide range of active users. It is important to note that successful retailers are
using these online strategies to penetrate new markets, to champion for social media
movements, and to effectively develop connections with consumers.
In this social media blueprint, we suggest using Instagram as our company’s main social media
platform. Our primary research examines H&M, Topshop, and Uniqlo’s Instagram accounts and
revealed the importance of using models, creating effective hashtags, and providing customer
service. The secondary research presents the best practices of social media and how the public
and specific individuals view social media. To conclude the proposal, we will provide a
comprehensive strategy that includes a detailed plan with suggestions for a stellar social media
presence.
Primary Research Summary & Key Takeaways
We have compiled the following key takeaways using Instagram. Our primary research includes
a variety of retailers who specialize in different products and promote to diverse markets.
These three key findings will provide an all-encompassing approach which will ultimately tie
into our strategic recommendations going forward.
#1: Using models to showcase the retailer's products increases follower satisfactions. Each one
of our retailers uses this form of posting. The following three pictures are example images used
by retailers to promote their products through outfit modeling. Our retailers provide
consumers with the option to directly purchase clothing, accessories, and shoes via online
portals. These types of posts provide followers with a visualization of how the products will look
once worn, which is part of the purchasing decision many consumers take into account. In
addition, these types of images also provide outfit inspirations when consumers are in need of
assistance with outfit coordination.
(Uniqlo) (H&M) (Topshop)
3
#2: The use of hashtags connects posts to a broader conversation and trend. Our retailers use
various hashtags that either connected their post to an on-going product line, style, event, or
motto and “catchphrase”. For example, Uniqlo wants to be known for their fashionable, yet
simple clothing. Their hashtag, #simplemadebetter, allows Uniqlo to actively promote the
company’s business strategy of revamping basic clothing to make it ‘better’ quality and more
fashion forward. London Fashion Week is one of the most prominent events in the fashion
industry, known to set the latest fashion trends. The #LFW (London Fashion Week) establishes
Topshop as a brand that is compatible against the haute couture f.
Asthma, Sleep, and Sun-SafetyPercentage of High School S.docxcockekeshia
Asthma, Sleep, and Sun-Safety
Percentage of High School Students Who Had Ever Been Told by a Doctor or Nurse That They Had Asthma, by Sex, Grade, and Race/Ethnicity,* 2017
*B > H, B > W (Based on t-test analysis, p < 0.05.)
All Hispanic students are included in the Hispanic category. All other races are non-Hispanic.
Note: This graph contains weighted results.
National Youth Risk Behavior Survey, 2017
Data for this slide are from the National Youth Risk Behavior Survey. This slide shows percentages of high school students who had ever been told by a doctor or nurse that they had asthma.
The percentage for all students is 22.5. The percentage for Male students is 22.4. The percentage for Female students is 22.5. The percentage for 9th grade students is 22.9. The percentage for 10th grade students is 22.9. The percentage for 11th grade students is 21.2. The percentage for 12th grade students is 23.0. The percentage for Black students is 29.8. The percentage for Hispanic students is 21.1. The percentage for White students is 20.9. All Hispanic students are included in the Hispanic category. All other races are non-Hispanic. Note: This graph contains weighted results.
For this behavior, the prevalence for Black students is higher than for Hispanic students. The prevalence for Black students is higher than for White students. (Based on t-test analysis, p < 0.05.)
2
Series 1
Total Male Female 9th 10th 11th 12th Black Hispanic White 22.5 22.4 22.5 22.9 22.9 21.2 23 29.8 21.1 20.9
Percent
Range and Median Percentage of High School Students Who Had Ever Been Told by a Doctor or Nurse That They Had Asthma, Across 29 States and 20 Cities, 2017
State and Local Youth Risk Behavior Surveys, 2017
These are results from the state and local Youth Risk Behavior Surveys, 2017. This slide shows the range and median percentages of 29 states and 20 cities for high school students who had ever been told by a doctor or nurse that they had asthma.
The range across states was 19.3% to 33.4%. The median across states was 24.3%. The range across cites was 17.4% to 33.4%. The median across cities was 23.9%.
3
Min
States Cities 19.3 17.399999999999999 Max
States Cities 33.4 33.4 Med
States Cities 24.3 23.9
Percent
No Data
19.3% - 21.6%
21.7% - 24.2%
24.3% - 25.9%
26.0% - 33.4%
Percentage of High School Students Who Had Ever Been Told by a Doctor or Nurse That They Had Asthma
State Youth Risk Behavior Surveys, 2017
This slide shows the percentage of students who had ever been told by a doctor or nurse that they had asthma, 2017. The values range from 19.3% to 33.4%. Idaho, Iowa, Kansas, Montana, Nebraska, Virginia, Wisconsin, range from 19.3% to 21.6%. California, Florida, Illinois, New Mexico, Texas, Utah, West Virginia, range from 21.7% to 24.2%. Delaware, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, range from 24.3%.
Assumption-Busting1. What assumption do you have that is in s.docxcockekeshia
Assumption-Busting
1. What assumption do you have that is in some way limiting? Please be specific.
2. What is the exact opposite of that assumption?
3. How can you start acting differently, based on the fact that the opposite of your assumption is true? Be specific.
Idea Presentation Form
1. Describe the idea in two-three sentences or bullets.
2. What need or desire does your idea address?
3. For whom is the idea intended (men age 45-50, punk rock fans in Philadelphia…)?
4. How is your idea better than other solutions that exist to address this need or desire?
.
Assuming you have the results of the Business Impact Analysis and ri.docxcockekeshia
Assuming you have the results of the Business Impact Analysis and risk assessment in hand, discuss in detail steps in selecting a strategy. Reference one additional article, in addition to the textbook itself.
Format: Times 12, 1 inch margin, minimum of 2.5 pages double spaced (not counting references and other information such as your name, etc.)
The attached content supports to navigate towards the core objectives of completing this paper
Text book :
Title:
The Disaster Recovery Handbook
Subtitle: **PLEASE SEE BOOKSTORE LINK BELOW TO PURCHASE REQUIRED MATERIALS
Authors: Michael WALLACE, Lawrence WEBBER
Publisher: AMACOM
Publication Date: 2017-12-28
.
Assuming you are hired by a corporation to assess the market potenti.docxcockekeshia
Assuming you are hired by a corporation to assess the market potential of a foreign country for their products.
Demographic Environment
1)
Population
2)
Gender Breakdown
3)
Life Expectancy
4)
Language
5)
Education
Cultural Environment
1)
Religion
2)
Lifestyle (segments by age)
3)
Values
4)
Customs
5)
Holidays
6)
Colors and Music (National Flag and Anthem)
.
Assuming that you are in your chosen criminal justice professi.docxcockekeshia
Assuming that you are in your chosen criminal justice profession, e.g. law enforcement officer, probation officer, or criminal investigator, examine the Fourth and Fifth Amendments and discuss the steps you would take to ensure that actions do not violate the citizen’s Fourth and Fifth Amendment rights.
.
assuming that Nietzsche is correct that conventional morality is aga.docxcockekeshia
assuming that Nietzsche is correct that conventional morality is against our natural expression of passions, argue a case that suggests that while he is correct, the truth is that people must be restricted in their natural expression,
which moral statements clearly recognize dangerous natural inclinations and restrict them?
what benefits do these restrictions provide to the individual as well as to society as a whole?
how might Nietzsche react to your argument?
.
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Dr. Vinod Kumar Kanvaria
Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
at Integral University, Lucknow, 06.06.2024
By Dr. Vinod Kumar Kanvaria
Biological screening of herbal drugs: Introduction and Need for
Phyto-Pharmacological Screening, New Strategies for evaluating
Natural Products, In vitro evaluation techniques for Antioxidants, Antimicrobial and Anticancer drugs. In vivo evaluation techniques
for Anti-inflammatory, Antiulcer, Anticancer, Wound healing, Antidiabetic, Hepatoprotective, Cardio protective, Diuretics and
Antifertility, Toxicity studies as per OECD guidelines
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
2. company put coupons good for a free piece of chicken in many
Sunday newspapers.
So how do sellers make any money if they always offer goods
and services on sale or for a special deal? Many sellers give
customers something for free, hoping they'll buy other products,
but a careful balance is needed to ensure profit.
Price is the only marketing mix variable or part of the offering
that generates revenue. Buyers relate the price to value. They
must feel they are getting value for the price paid. Pricing
decisions
are extremely important. So how do organizations decide how to
price their goods and services? This week, we explore both
distribution and price as a means to add value for customers.
6.1 Marketing Channels and Channel Partners
LEARNING OBJECTIVES
1. Explain why marketing channel decisions can result in the
success or failure of products.
2. Describe the types of organizations that work together as
channel partners and what each does.
Today, marketing channel decisions are as important as the
decisions companies make about the features and prices of
products (Littleson, 2007). Consumers have become more
demanding. They are used to getting what they want. If you
can't get your product to them when, where, and how they want
it, they will simply buy a competing product. In other words,
how companies sell has become as important as what they sell
(CBSNews.com, 2007).
The firms a company partners with to actively promote and sell
a product as it travels through its marketing channel to users are
referred to by the firm as its channel members (or partners).
Companies strive to choose not only the best marketing
channels but also the best channel partners. A strong channel
partner like Walmart can successfully promote and sell a
product that might not otherwise turn a profit for its producer.
In turn, Walmart wants to work with strong channel partners it
can depend on to continuously provide it with great products.
3. By contrast, a weak channel partner, like a bad spouse, can be a
liability.
The simplest marketing channel consists of just two parties—a
producer and a consumer. Your haircut is a good example.
When you get a haircut, it travels straight from your hairdresser
to you. No one else owns, handles, or remarkets the haircut
before you get it. However, many other products and services
pass through multiple organizations before they get to you.
These organizations are called intermediaries (or middlemen or
resellers).
Companies partner with intermediaries not because they
necessarily want to (ideally they could sell their products
straight to users) but because the intermediaries can help them
sell the products better than they could working alone. In other
words, they have some sort of capabilities the producer needs:
contact with many customers or the right customers, marketing
expertise, shipping and handling capabilities, and the ability to
lend the producer credit are among the types of help a firm can
get by using a channel partner.
Intermediaries also create efficiencies by streamlining the
number of transactions an organization must make, each of
which takes time and costs money to conduct. As Figure 6.1,
"Using Intermediaries to Streamline the Number of
Transactions" shows, by selling the tractors it makes through
local farm machinery dealers, manufacturer John Deere can
streamline the number of transactions it makes from eight to
just two.
Figure 6.1 Using Intermediaries to Streamline the Number of
Transactions
The marketing environment is always changing, so what was a
great channel or channel partner yesterday might not be a great
channel partner today. Changes in technology, production
techniques, and your customer's needs mean you have to
continually reevaluate your marketing channels and channel
partners. Moreover, when you create a new product, you can't
assume the channels that were used in the past are the best ones
4. (Lancaster & Withey, 2007). A different channel or channel
partner might be better.
Consider Microsoft's digital encyclopedia, Encarta, which was
first sold on CD and via online subscription in the early 1990s.
Encarta nearly destroyed Encyclopedia Britannica, a firm that
had dominated the print encyclopedia business for literally
centuries. Ironically, Microsoft had actually tried to partner
with Encyclopedia Britannica to use its encyclopedia
information to make Encarta but was turned down.
But today, Encarta no longer exists. It's been put out of business
by the free online encyclopedia Wikipedia. The point is that
products and their marketing channels are constantly evolving.
Consequently, you and your company have to be ready to
evolve, too.
Types of Channel Partners
Let's now look at the basic types of channel partners. To help
you understand the types of channel partners, we will go over
the most common types of intermediaries. The two types you
hear about most frequently are wholesalers and retailers. Keep
in mind, however, that the categories we discuss in this section
are just that—categories. The lines between wholesalers,
retailers, and producers have begun to blur. Microsoft is a
producer of goods, but it has opened its own retail stores to sell
products to consumers, much as Apple has done (Lyons, 2009).
Walmart and other large retailers now produce their own brands
and sell them to other retailers. Similarly, many producers have
outsourced their manufacturing, and although they still call
themselves manufacturers, they act more like wholesalers.
Wherever organizations see an opportunity, they are beginning
to take it, regardless of their positions in marketing channels.
Wholesalers
Wholesalers obtain large quantities of products from producers,
store them, and break them down into cases and other smaller
units more convenient for retailers to buy, a process called
"breaking bulk." Wholesalers get their name from the fact that
they resell goods "whole" to other companies without
5. transforming the goods. If you are trying to stock a small
electronics store, you probably don't want to purchase a
truckload of iPads. Instead, you probably want to buy a smaller
assortment of iPads as well as other merchandise. Via
wholesalers, you can get the assortment of products you want in
the quantities you want. Some wholesalers carry a wide range of
different products; others carry narrow ranges of products.
Most wholesalers "take title" to goods—or own them until
purchased by other sellers. Wholesalers such as these assume a
great deal of risk on the part of companies farther down the
marketing channel. For example, if the iPad you plan to
purchase is stolen during shipment, damaged, or becomes
outdated because a new model has been released, the wholesaler
suffers the loss—not you. Electronic products, in particular,
become obsolete very quickly. Think about the cell phone you
owned just a couple of years ago. Would you want it today?
Retailers
Retailers buy products from wholesalers, agents, or distributors
and then sell them to consumers. Retailers vary by the types of
products they sell, their sizes, the prices they charge, the
level of service they provide consumers, and the convenience or
speed they offer. You are familiar with many of these types of
retailers because you have purchased products from them.
Supermarkets, or grocery stores, are self-service retailers that
provide a full range of food products to consumers, as well as
some household products. Supermarkets can be high, medium,
or low range in terms of the prices they charge and the service
and variety of products they offer. Whole Foods and Central
Market are grocers that offer a wide variety of products,
generally at higher prices. Midrange supermarkets include
stores such as Albertsons and Kroger. Aldi and Sack 'n Save are
examples of supermarkets with a limited selection of products
and service but low prices. Drugstores specialize in selling
over-the-counter medications, prescriptions, and health and
beauty products, and offer services such as photo developing.
Convenience stores are miniature supermarkets. Many of them
6. sell gasoline and are open 24 hours. Often they are located on
corners, making it easy and fast for consumers to get in and out.
Some of these stores contain fast-food franchises such as
Subway. Consumers pay for the convenience in the form of
higher markups on products.
Specialty stores sell a certain type of product, but they usually
carry a deep line of it. Zales, which sells jewelry, and Williams-
Sonoma, which sells an array of kitchen and cooking-related
products, are examples of specialty stores. The personnel who
work in specialty stores are usually knowledgeable and often
provide customers with a high level of service. Specialty stores
vary by size. Many are small. However, giant specialty stores
called category killers have emerged.
A category killer sells a high volume of a particular type of
product and, in doing so, dominates the competition, or
"category." Petco and PetSmart are category killers in the retail
pet-products market. Best Buy is a category killer in the
electronics-product market.
Department stores, by contrast, carry a variety of household and
personal types of merchandise such as clothing and jewelry.
Many are chain stores. The prices department stores charge
range widely, as does the level of service shoppers receive.
Neiman Marcus, Saks Fifth Avenue, and Nordstrom sell
expensive products and offer extensive personal service.
Department stores such as JCPenney, Sears, and Macy's charge
midrange prices, and offer a midrange level of service.
Walmart, Kmart, and Target are discount department stores with
cheaper goods and a limited amount of service.
Superstores are oversized department stores that carry a broad
array of general merchandise as well as groceries. Banks, hair
and nail salons, and restaurants such as Starbucks are often
located within these stores for the convenience of shoppers.
You have probably shopped at a SuperTarget or a huge Walmart
with offerings such as these.
Warehouse clubs are supercenters that sell products at a
discount. They require people to become members by paying an
7. annual fee. Costco and Sam's Club are examples. Off-
price retailers are stores that sell a variety of discount
merchandise that consists of seconds, overruns, and the
previous season's stock other stores have liquidated. Big Lots,
Ross Dress for Less, and dollar stores are off-price retailers.
A new type of retail store that turned up in the last few years is
the pop-up store. Pop-up stores are small, temporary stores.
They can be kiosks that temporarily occupy unused retail space.
The goal is to create excitement and "buzz" for a retailer that
then drives customers to their regular stores. In 2006, JCPenney
created a pop-up store in Times Square for a month. Kate
Coultas, a spokesperson for JCPenney, said the store got the
attention of Manhattan's residents. Many hadn't been to a
JCPenney in a long time. "It was a real dramatic statement,"
Coultas said. "It kind of had a halo effect" on the company's
stores in the surrounding boroughs of New York City (Austin,
2009).
Not all retailing goes on in stores, however. Nonstore
retailing—retailing not conducted in stores—is a growing trend.
Door-to-door sales; party selling; selling to consumers via
television, catalogs, the Internet, and vending machines; and
telemarketing are examples of nonstore retailing. So is direct
marketing. Companies that engage in direct marketing develop
and send promotional materials such as catalogs, letters,
leaflets, e-mails, and online ads straight to consumers urging
them to contact their firms directly to buy products.
6.1 KEY TAKEAWAY
The specific way in which you are able to buy a product is
referred to as its marketing channel. Marketing channel
decisions are as important as the decisions companies make
about the features and prices of products. Channel partners are
firms that actively promote and sell a product as it travels
through its channel to its user. Companies try to choose the best
channels and channel partners to help them sell products
because doing so can give them a competitive advantage.
6.2 Typical Marketing Channels
8. LEARNING OBJECTIVES
1. Describe the basic types of channels in business-to-consumer
(B2C) and business-to-business (B2B) markets.
2. Explain the advantages and challenges companies face when
using multiple channels and alternate channels.
3. Explain the pros and cons of disintermediation.
4. List the channels firms can use to enter foreign markets.
Figure 6.2, "Typical Channels in Business-to-Consumer (B2C)
Markets," shows the typical channels in business-to-consumer
(B2C) markets. As we explained, the shortest marketing channel
consists of just two parties—a producer and a consumer. A
channel such as this is
a direct channel. By contrast, a channel that includes one or
more intermediaries—say, a wholesaler, distributor, or broker
or agent—is an indirect channel. In an indirect channel, the
product passes through one or more intermediaries. That doesn't
mean the producer will do no marketing directly to consumers.
Levi's runs ads on TV designed to appeal directly to consumers.
The makers of food products run coupon ads. However, the
seller also has to focus its selling efforts on these intermediaries
because the intermediary can help with the selling effort. Not
everyone wants to buy Levi's online.
Figure 6.2 Typical Channels in Business-to-Consumer (B2C)
Markets
Disintermediation
You might be tempted to think middlemen, or intermediaries,
are bad. If you can cut them out of the deal—a process
marketing professionals call disintermediation—products can be
sold more cheaply, can't they? Large retailers, including Target
and Walmart, sometimes bypass middlemen. Instead, they buy
their products directly from manufacturers and then store and
distribute them to their own retail outlets. Walmart is
increasingly doing so and even purchasing produce directly
from farmers around the world (Birchall, 2010).
However, cutting out the middleman is not always desirable. A
wholesaler with buying power and excellent warehousing
9. capabilities might be able to purchase, store, and deliver a
product to a seller more cheaply than its producer could alone.
Likewise, hiring a distributor will cost a producer money. But if
the distributor can help the producer sell greater quantities of a
product, it can increase the producer's profits.
Moreover, when you cut out the middlemen, you have to
perform the functions they once did. Those functions could
include storing the product or dealing with hundreds of
retailers. More than one producer has ditched its intermediaries
only to rehire them later.
The trend today is toward disintermediation. The Internet has
facilitated a certain amount of disintermediation by making it
easier for consumers to contact one another without going
through any middlemen. The Internet has also made it easier for
buyers to shop for the lowest prices. Today, most people book
trips online without going through travel agents. People also
shop for homes online rather than using real estate agents. To
remain in business, resellers need to find new ways to add value
to products.
However, for some products, disintermediation via the Internet
doesn't work so well. Insurance is an example. You can buy it
online directly from companies, but many people want to buy
through an agent they can talk to for advice. Most large
insurance companies offer consumers both options, and each
method of selling insurance products has a different pricing
structure based on the level of service.
Sometimes it's simply impossible to cut out middlemen. Would
the Coca-Cola Company want to take the time and trouble to
personally sell you an individual can of Coke? No. Coke is no
more capable of selling individual Cokes to people than Santa is
capable of delivering toys to children around the globe.
Even Dell, which initially made its mark by selling computers
straight to users, now sells its products through retailers such as
Best Buy as well. Dell found that to compete effectively, its
products needed to be placed in stores alongside Hewlett-
Packard, Acer, and other computer brands (Kraemer & Dedrick,
10. 2002).
Multiple Channels and Alternate Channels
Marketing channels can get a lot more complex than the
channels shown in Figure 6.2, "Typical Channels in Business-
to-Consumer (B2C) Markets," though. Look at the channels in
Figure 6.3, "Alternate Channel Arrangements." Notice how in
some situations, a wholesaler will sell to brokers, who then sell
to retailers and consumers. In other situations, a wholesaler will
sell straight to retailers or straight to consumers. Manufacturers
also sell straight to consumers, and, as we explained, sell
straight to large retailers like Target.
Figure 6.3 Alternate Channel Arrangements
The point is that firms can and do use multiple channels. Take
Levi's, for example. You can buy a pair of Levi's jeans from a
retailer such as Kohl's, or you can buy a pair directly from
Levi's at one of the outlet stores it owns around the country.
You can also buy a pair from the Levi's website.
The key is understanding the different target markets for the
product and designing the best channel to meet the needs of
customers in each. Is there a group of buyers who would
purchase your product if they could shop online from their
homes? Perhaps there is a group of customers interested in your
product, but they do not want to pay full price. The ideal way to
reach these people might be with an outlet store and low prices.
Each group then needs to be marketed to accordingly. Many
people regularly interact with companies via numerous channels
before making buying decisions.
Using multiple channels can be effective. At least one study has
shown that the more marketing channels your customers use, the
more loyal they are likely to be to your products (Fitzpatrick,
2005). Companies work hard to integrate their selling channels
so users get a consistent experience. For example, QVC's TV
channel, website, and mobile service—which sends alerts to
customers and allows them to buy products via their cell
phones—all have the same look and feel.
Would you like to purchase gold from a vending machine? You
11. can in Germany. Germans like to purchase gold because it's
considered a safe alternative to paper money, which can become
devalued during a period of hyperinflation. So, in addition to
selling gold the usual way, TG-Gold- Super-Market company
has installed "gold to go" machines in German-speaking
countries. The gold is dispensed in metal boxes, and cameras on
the machine monitor the transactions to prevent money
laundering (Wilson & Blas, 2009).
6.2 KEY TAKEAWAY
A direct marketing channel consists of just two parties—a
producer and a consumer. By contrast, a channel that includes
one or more intermediaries (wholesaler, distributor, or broker or
agent) is an indirect channel. Firms often use multiple channels
to reach more customers and increase their effectiveness. Some
companies find ways to increase their sales by forming strategic
channel alliances with one another. Other companies look for
ways to cut the middlemen from the channel, a process known
as disintermediation.
6.3 Functions Performed by Channel Partners
LEARNING OBJECTIVES
1. Describe the activities performed in channels.
2. Explain which organizations perform which functions.
Different organizations in a marketing channel are responsible
for different value-adding activities. The following are some of
the most common functions channel members perform.
However, keep in mind that "who does what" can vary,
depending on what the channel members actually agree to in
their contracts with one another.
Disseminate Marketing Communications and Promote Brands
Somehow, wholesalers, distributors, retailers, and consumers
need to be informed—via marketing communications—that an
offering exists and that there's a good reason to buy it.
Sometimes, a push strategy is used to help marketing channels
accomplish this. A push strategy (discussed in greater detail in
Week 7, "Public Relations and Sales Promotions") is one in
which a manufacturer
12. convinces wholesalers, distributors, or retailers to sell its
products. Consumers are informed via advertising and other
promotions that the product is available for sale, but the main
focus is to sell to intermediaries.
By contrast, a pull strategy focuses on creating demand for a
product among consumers so that businesses agree to sell the
product. A good example of an industry that uses both pull and
push strategies is the pharmaceutical industry. Pharmaceutical
companies promote their drugs to pharmacies and doctors, but
they now also run ads designed to persuade individual
consumers to ask their physicians about drugs that might benefit
them.
In many cases, two or more organizations in a channel jointly
promote a product to retailers, purchasing agents, and
consumers and work out which organization is responsible for
what type of communication to whom. The actual forms and
styles of communication will be discussed more in the
promotions and sales section of the book.
Sorting and Regrouping Products
As we explained, many businesses don't want to receive huge
quantities of a product. One of the functions of wholesalers and
distributors is to break down large quantities of products into
smaller units and provide an assortment of different products.
Storing and Managing Inventory
If a channel member has run out of a product when a customer
wants to buy it, the result is often a lost sale. That's why most
channel members stock, or "carry," reserve inventory. However,
storing products is not free. Warehouses cost money to build or
rent and heat and cool; employees have to be paid to stock
shelves, pick products, and ship them. Some companies,
including Walmart, put their suppliers in charge of their
inventory. The suppliers have access to Walmart's inventory
levels and ship products when and where the retailer's stores
need them.
Distributing Products
Physical goods that travel within a channel need to be moved
13. from one member to another and sometimes back again. Some
large wholesalers, distributors, and retailers own their own
fleets of trucks for this purpose. In other cases, they hire third-
party transportation providers—trucking companies, railroads—
to move their products.
Being able to track merchandise like you can track a FedEx
package is important to channel partners. They want to know
where their products are and what shape they are in. Losing
inventory or having it damaged or spoiled can wreak havoc on
profits. Other problems include not getting products on time or
being able to get them at all when your competitors can.
Assume Ownership Risk and Extend Credit
If products are damaged during transit, one of the first
questions asked is who owned the product at the time. In other
words, who suffers the loss? Generally, no one channel member
assumes all of the ownership risk in a channel. Instead, it is
distributed among channel members depending on the contracts
they have with one another and their free on board provisions.
A provision designates who is responsible for what shipping
costs and who owns the
free on board (FOB) title to the goods and when. Share
Marketing and Other Information
Each of the channel members has information about the demand
for products, trends, inventory levels, and what the competition
is doing. The information is valuable and can be doubly
valuable if channel partners trust one another and share it. More
information can help each firm in the marketing channel
perform its functions better and overcome competitive obstacles
(Frazier, Maltz, Antia, & Rindfleisch, 2009).
6.3 KEY TAKEAWAY
Different organizations in a marketing channel are responsible
for different value-adding activities. These activities include
disseminating marketing communications and promoting brands,
sorting and regrouping products, storing and managing
inventory, distributing products, assuming the risk of products,
and sharing information.
14. 6.4 Marketing Channel Strategies
LEARNING OBJECTIVES
1. Describe the factors that affect a firm's channel decisions.
2. Explain how intensive, exclusive, and selective distribution
differ from one another.
3. Explain why some products are better suited to some
distribution strategies than others.
Channel Selection Factors
Selecting the best marketing channel is critical because it can
mean the success or failure of your product. One of the reasons
the Internet has been so successful as a marketing channel is
because customers get to make some of the channel decisions
themselves. They can shop virtually for any product in the
world when and where they want to, as long as they can connect
to the web. They can also choose how the product is shipped.
Type of Customer
The Internet isn't necessarily the best channel for every product,
though. For example, do you want to closely examine the fruits
and vegetables you buy to make sure they are ripe enough or not
overripe? Then online grocery shopping might not be for you.
Clearly, how your customers want to buy products will have an
impact on the channel you select. In fact, it should be your
prime consideration.
First of all, are you selling to a consumer or a business
customer? Generally, these two groups want to be sold to
differently. Most consumers are willing to go to a grocery or
convenience store to purchase toilet paper. The manager of a
hospital trying to replenish its supplies would not. The hospital
manager would also be buying a lot more toilet paper than an
individual consumer and would expect to be called upon by a
distributor, but perhaps only semiregularly. Thereafter, the
manager might want the toilet paper delivered on a regular basis
and billed to the hospital via automatic systems. Likewise, when
businesses buy expensive products such as machinery and
computers or products that have to be customized, they
15. generally expect to be sold to personally via salespeople. And
often they expect special payment terms.
Type of Product
The type of product you're selling will also affect your
marketing channel choices. Perishable products often have to be
sold through shorter marketing channels than products with
longer shelf lives. For example, a yellowfin tuna bound for the
sushi market will likely be flown overnight to its destination
and handled by few intermediaries. By contrast, canned tuna can
be shipped by "slow boat" and handled by more intermediaries.
Valuable and fragile products also tend to have shorter
marketing channels. Automakers generally sell their cars
straight to car dealers (retailers) rather than through
wholesalers. The makers of corporate jets often sell them
straight to corporations, which demand they be customized to
certain specifications.
Channel Partner Capabilities
Your ability vs. the ability of other types of organizations that
operate in marketing channels can affect your channel choices.
If you are a massage therapist, you are quite capable of
delivering your product straight to your client. If you produce
downloadable products like digital books or recordings, you can
sell your products straight to customers on the Internet.
Hypnotic World, a United Kingdom producer of self-hypnosis
recordings, is a company such as this.
But suppose you've created a great personal gadget—something
that's tangible, or physical. You've managed to sell it via two
channels—say, on TV (via the Home Shopping Network,
perhaps) and on the web. Now you want to get the product into
retail stores like Target, Walgreens, and Bed Bath & Beyond. If
you can get the product into these stores, you can increase your
sales exponentially. In this case, you might want to contract
with an intermediary—perhaps an agent or a distributor who
will convince the corporate buyers of those stores to carry your
product.
The Business Environment and Technology
16. The general business environment, such as the economy, can
also affect the marketing channels chosen for products. For
example, think about what happens when the value of the dollar
declines relative to the currencies of other countries. When the
dollar falls, products imported from other countries cost more to
buy relative to products produced and sold in the United States.
Products "made in China" become less attractive because they
have gotten more expensive. As a result, some companies then
look closer to home for their products and channel partners.
Technological changes affect marketing channels, too. We
explained how the Internet has changed how products are
bought and sold. Many companies like selling products on the
Internet as much as consumers like buying them. An Internet
sales channel gives companies more control over how their
products are sold and at what prices than if they leave the job to
another channel partner such as a retailer. Plus, a company
selling on the Internet has a digital footprint, or record, of what
shoppers look at, or click on. As a result, it can recommend
products they appear to be interested in and target them with
special offers and prices (Food Channel, 2008).
Some sites let customers tailor products to their liking. On the
Domino's website, you can pick your pizza ingredients and then
watch them as they fall onto your virtual pizza. The site then
lets you know who is baking your pizza, how long it's taking to
cook, and who's delivering it. Even though interaction is digital,
it somehow feels a lot more personal than a basic phone order.
Developing customer relationships is what today's marketing is
about. The Internet is helping companies do this.
Competing Products' Marketing Channels
How your competitors sell their products can also affect your
marketing channels. As we explained, Dell now sells computers
to firms such as Best Buy so the computers can compete with
other brands on store shelves.
You don't always have to choose the channels your competitors
rely on, though. Netflix is an example. Netflix turned the video
rental business on its head by coming up with a new marketing
17. channel that better meets the needs of many consumers.
Maybelline and L'Oréal products are sold primarily in retail
stores. However, Mary Kay and Avon use salespeople to
personally sell their products to consumers.
Factors That Affect a Product's Intensity of Distribution
Firms that choose an intensive distribution strategy try to sell
their products in as many outlets as possible. Intensive
distribution strategies are often used for convenience
offerings— products customers purchase on the spot without
much shopping around. Soft drinks and newspapers are an
example. You see them sold in many different places. Redbox,
which rents DVDs out of vending machines, has made headway
using an intensive distribution strategy: the machines are
located in fast-food restaurants, grocery stores, and other places
people frequent.
Figure 6.4
Because installing a vending machine is less expensive than
opening a retail outlet, Redbox has been able to locate its DVD
vending machines in places where people go frequently.
Source: Photo by Greg Goebel. (2012). Wikimedia Commons.
Used under the terms of the Creative Commons Attribution-
ShareAlike 2.0 Generic license.
By contrast, selective distribution involves selling products at
select outlets in specific locations. For instance, Sony TVs can
be purchased at a number of outlets such as Circuit City, Best
Buy, or Walmart, but the same models are generally not sold at
all the outlets. By selling different models with different
features and price points at different outlets, a manufacturer can
appeal to different target markets.
Exclusive distribution involves selling products through one or
very few outlets. For instance, supermodel Cindy Crawford's
line of furniture is sold exclusively at the furniture company
Rooms To Go. Designer Michael Graves has a line of products
sold exclusively at Target. To purchase those items you need to
go to one of those retailers. TV series are distributed
exclusively. A company that produces a TV series will sign an
18. exclusive deal with a network like ABC, CBS, or Showtime, and
the series will initially appear only on that network. Later,
reruns of the shows are often distributed selectively to other
networks.
To control the image of their products and the prices at which
they are sold, the makers of upscale products often prefer to
distribute their products more exclusively. Expensive perfumes
and designer purses are an example. During the economic
downturn, the makers of some of these products were
disappointed to see retailers had slashed the products' prices,
"cheapening" their prestigious brands.
Distributing a product exclusively to a limited number of
organizations under strict terms can help prevent a company's
brand from deteriorating, or losing value. It can also prevent
products from being sold cheaply in gray markets. A gray
market is a market in which a producer hasn't authorized its
products to be sold (Burrows, 2008).
6.4 KEY TAKEAWAY
Selecting the best marketing channel is critical because it can
mean the success or failure of your product. The type of
customer you're selling to will have an impact on the channel
you select. In fact, this should be your prime consideration. The
type of product, your organization's capabilities vs. those of
other channel members, the way competing products are
marketed, and changes in the business environment and
technology can also affect your marketing channel decisions.
Various factors affect a company's decisions about the intensity
of a product's distribution. An intensive distribution strategy
involves selling a product in as many outlets as possible.
Selective distribution involves selling a product at select outlets
in specific locations. Exclusive distribution involves selling a
product through one or very few outlets.
6.5 Channel Dynamics
LEARNING OBJECTIVES
19. 1. Explain what channel power is and the types of firms that
wield it.
2. Describe the types of conflicts that can occur in marketing
channels.
3. Describe the ways in which channel members achieve
cooperation with one another.
4. Understand how supply chains differ from marketing
channels.
Channel Power
Strong channel partners often wield what's called channel power
and are referred to
as channel leaders, or channel captains. In the past, big
manufacturers like Procter & Gamble and Dell were often
channel captains. But that is changing. More often today, big
retailers like Walmart and Target are commanding more channel
power. They have millions of customers and are bombarded
with products wholesalers and manufacturers want them to sell.
As a result, these retailers get what they want.
Category killers are in a similar position. Consumers like you
are gaining marketing channel power, too. Regardless of what
one manufacturer produces or what a local retailer has
available, you can use the Internet to find whatever product you
want at the best price available and have it delivered when,
where, and how you want.
Channel Conflict
A dispute among channel members is called a channel conflict.
Channel conflicts are common. Part of the reason for this is that
each channel member has its own goals, which are unlike those
of any other channel member. The relationship among them is
not unlike the relationship between you and your boss. Both of
you want to serve your organization's customers well. However,
your goals are different. Your boss might want you to work on
the weekend, but you might not want to because you need to
study for a Monday test.
All channel members want to have low inventory levels but
immediate access to more products. Who should bear the cost of
20. holding the inventory? What if consumers don't purchase the
products? Can they be returned to other channel members, or is
the organization in possession of the products responsible for
disposing of them? Channel members try to spell out such
details in their contracts.
No matter how "airtight" their contracts are, there will still be
points of contention among channel members. Channel members
are constantly asking their partners, "What have you done (or
not done) for me lately?" Wholesalers and retailers frequently
lament that the manufacturers they work with aren't doing more
to promote their products—for example, distributing coupons
for them or running TV ads—so they will move off store
shelves more quickly.
Meanwhile, manufacturers want to know why wholesalers aren't
selling their products faster and why retailers are placing them
at the bottom of shelves where they are hard to see. Apple
opened its own retail stores around the country, in part because
it didn't like how its products were being displayed and sold in
other companies' stores.
Vertical vs. Horizontal Conflict
The conflicts we've described so far are examples of vertical
conflict. A vertical conflict is conflict that occurs between two
different types of members in a channel—say, a manufacturer,
an agent, a wholesaler, or a retailer. By contrast, a horizontal
conflict is conflict that occurs between organizations of the
same type—say, two manufacturers that each want a powerful
wholesaler to carry only its products.
Horizontal conflict can be healthy because it's competition-
driven. But it can create problems, too. In 2005, Walmart
experienced a horizontal conflict among its landline telephone
suppliers. The suppliers were in the middle of a price war and
cutting the prices to all the retail stores to which they sold.
Walmart wasn't selling any additional phones due to the price
cuts. It was just selling them for less and making less of a profit
(Hitt, Black, & Porter, 2005).
Channel leaders such as Walmart usually have a great deal of
21. say when it comes to how channel conflicts are handled, which
is to say that they usually get what they want. But even the most
powerful channel leaders strive for cooperation. A manufacturer
with channel power still needs good retailers to sell its
products; a retailer with channel power still needs good
suppliers from which to buy products. One member of a channel
can't squeeze all the profits out of the other channel members
and still hope to function well.
Moreover, because each of the channel partners is responsible
for promoting a product through its channel, to some extent they
are all in it together. Each one of them has a vested interest in
promoting the product, and the success or failure of any one of
them can affect that of the others.
Figure 6.5
Boar's Head's in-store displays help its channel partners sell its
products. Source: Photo by Scorpions and Centaurs. (2010).
Flickr. Used under the terms
of the Creative Commons Attribution-NonCommercial-
ShareAlike 2.0 Generic license.
Producing marketing and promotional materials their channel
partners can use for sales purposes can also facilitate
cooperation among companies. In-store displays, brochures,
banners, photos for websites, and advertisements the partners
can customize with their own logos and company information
are examples.
Educating your channel members' sales representatives is an
important part of facilitating cooperation, especially when
you're launching a new product. The reps need to be provided
with training and marketing materials in advance of the launch
so their activities are coordinated with yours. Microsoft does a
good job of training its partners. Before launching operating
systems such as Windows XP and Vista, Microsoft provides
thousands of its partners with sales and technical training
(IrieAuctions.com, 2009).
In addition, companies run sales contests to encourage their
channel partners' sales forces to sell what they have to offer.
22. Offering your channel partners certain monetary incentives,
such as discounts for selling your product, can help, too. We'll
talk more about incentive programs
in Week 7, "Public Relations and Sales Promotions."
Finally, you don't want to risk breaking the law or engage in
unfair business practices when dealing with your channel
partners (IrieAuctions.com, 2009). Another issue channel
partners sometimes encounter relates to resale price
maintenance agreements. A resale price maintenance agreement
is an agreement whereby a producer of a product restricts the
price a retailer can charge for it.
The producers of upscale products often want retailers to sign
resale price maintenance agreements because they don't want
the retailers to deeply discount their products. Doing so would
"cheapen" their brands, producers believe. Producers also
contend that resale price maintenance agreements prevent price
wars from breaking out among their retailers, which can lead to
the deterioration of prices for all of a channel's members.
Channel Integration: Vertical and Horizontal Marketing Systems
Another way to foster cooperation in a channel is to establish a
vertical marketing system. In
a vertical marketing system, channel members formally agree to
closely cooperate with one another. (You have probably heard
the saying, "If you can't beat 'em, join 'em.") A vertical
marketing system can also be created by one channel member
taking over the functions of another member.
Procter & Gamble (P&G) has traditionally been a manufacturer
of household products, not a retailer of them. But the company's
long-term strategy is to compete in every personal-care channel,
including salons, where the men's business is underdeveloped.
In 2009, P&G purchased The Art of Shaving, a seller of pricey
men's shaving products in upscale shopping malls. P&G also
runs retail boutiques around the globe that sell its prestigious
SK-II skin-care line (Neff, 2009).
Franchises are another type of vertical marketing system. They
are used not only to lessen channel conflicts but also to
23. penetrate markets. Recall that a franchise gives a person or
group the right to market a company's goods or services within
a certain territory or location (Daszkowski, n.d.). McDonald's
sells meat, bread, ice cream, and other products to its
franchises, along with the right to own and operate the stores.
And each of the owners of the stores signs a contract with
McDonald's agreeing to do business in a certain way.
By contrast, in a conventional marketing system, the channel
members have no affiliation with one another. All the members
operate independently. If the sale or the purchase of a product
seems like a good deal at the time, an organization pursues it.
But there is no expectation among the channel members that
they have to work with one another in the future.
A horizontal marketing system is one in which two companies at
the same channel level— say, two manufacturers, two
wholesalers, or two retailers—agree to cooperate with another
to sell their products or to make the most of their marketing
opportunities. The Internet phone service Skype and the mobile-
phone maker Nokia created a horizontal marketing system by
teaming to put Skype's service on Nokia's phones. Skype hoped
it will reach a new market (mobile phone users) this way. And
Nokia hoped to sell its phones to people who like to use Skype
on their personal computers (PCs) (Gelles, 2009).
Channels vs. Supply Chains
In the past few decades, organizations have begun taking a more
holistic look at their marketing channels. Instead of looking at
only the firms that sell and promote their products, they have
begun looking at all the organizations that figure into any part
of the process of producing, promoting, and delivering an
offering to its user. All these organizations are considered part
of the offering's supply chain.
For instance, the supply chain includes producers of the raw
materials that go into a product. If it's a food product, the
supply chain extends back through the distributors all the way
to the farmers who grew the ingredients and the companies from
which the farmers purchased the seeds, fertilizer, or animals. A
24. product's supply chain also includes transportation companies
such as railroads that help physically move the product and
companies that build websites for other companies. If a
software maker hires a company in India to help it write a
computer program, the Indian company is part of the partner's
supply chain. These types of firms aren't considered channel
partners because it's not their job to actively sell the products
being produced. Nonetheless, they all contribute to a product's
success or failure.
Firms are constantly monitoring their supply chains and
tinkering with them so they are as efficient as possible. This
process is called supply chain management. Supply chain
management is challenging. Done well, it's practically an art.
We'll talk more about supply chains and what companies can do
to improve them to satisfy customers and gain a competitive
edge.
As we explained earlier, your product's supply chain includes
not only the downstream companies that actively sell the
product but also all the other organizations that have an impact
on it before, during, and after it's produced. Those companies
include the providers of the raw materials your firm uses to
produce it, the transportation company that physically moves it,
and the firm that helped build the web pages to promote it. If
you hired a programmer in India to help write code for a
computer game, the programmer is also part of the product's
supply chain. If you hired a company to process copies of the
game returned by customers, that company is part of the supply
chain as well. Large organizations with many products can have
thousands of supply chain partners. Service organizations also
need supplies to operate, so they have supply chains, too.
Today, the term value chain is sometimes used interchangeably
with the term supply chain. The idea behind the value chain is
that your supply chain partners should do more for you than
perform just basic functions; each partner should help you
create more value for customers as the product travels along the
chain—preferably more value than your competitors' supply
25. chain partners can add to their products.
Zara, a trendy but inexpensive clothing chain in Europe, is a
good example of a company that has managed to create value
for its customers with smart supply chain design and execution.
Originally, it took six months for Zara to design a garment and
get it delivered to stores. To get the hottest fashions in the
hands of customers sooner, Zara began working more closely
with its supply chain partners and internal design teams. It also
automated its inventory systems so it could quickly figure out
what was selling and what was not. As a result, it's now able to
deliver its customers the most cutting-edge fashion in just two
weeks (Smith, 2008).
Sourcing is the process of evaluating and hiring individual
businesses to supply goods and services to your business.
Procurement is the process of actually purchasing those goods
and services. Sourcing and procurement have become a bigger
part of a supply manager's job, in part because businesses keep
becoming more specialized. Just like Ford's workers became
more efficient by performing specialized tasks, so, too have
companies.
Firms look at their supply chains and outside them to see which
companies can add the most value to their products at the least
cost. If a firm can find a company that can add more value than
it can to a function, it will often outsource the task to that
company. After all, why do something yourself if someone else
can do it better or more cost effectively?
Other companies go a step further and outsource their entire
order processing and shipping departments to third-party
logistics (3PLs) firms. FedEx Supply Chain Services and UPS
Supply Chain
Solution
26. s (which are divisions of FedEx and UPS, respectively) are
examples of 3PLs. A 3PL is a one-stop shipping solution for a
company that wants to focus on other aspects of its business.
Firms that receive and ship products internationally often hire
3PLs so they don't have to deal with the headaches of
transporting products abroad and completing import and export
paperwork for them.
6.5 KEY TAKEAWAY
Channel partners that wield channel power are referred to as
channel leaders. A dispute among channel members is called a
channel conflict. A vertical conflict is one that occurs between
two different types of members in a channel. By contrast, a
horizontal conflict is one that occurs between organizations of
the same type. Channel leaders are often in the best position to
resolve channel conflicts. Vertical and horizontal marketing
systems can help foster channel cooperation, as can creating
marketing programs to help a channel's members all generate
greater revenues and profits. All of the organizations that figure
into any part of the process of producing, promoting, and
delivering an offering to its user are part of the offering's
supply chain. Firms have begun looking at these organizations
in addition to the organizations that sell and promote their
products. The process of managing and improving supply chains
is called supply chain management.
27. 6.6 Demand Planning and Inventory Control
LEARNING OBJECTIVES
1. Explain why demand planning adds value to products.
2. Describe the role inventory control plays when it comes to
marketing products.
3. List the reasons why firms collaborate with another for the
purposes of inventory control and
demand planning.
Demand Planning
Imagine you are a marketing manager who has done everything
in your power to help develop and promote a product—and it's
selling well. But now your company is running short of the
product because the demand forecasts for it were too low.
Recall that this is the scenario Nintendo faced when the Wii
came out. The same thing happened to IBM when it launched
the popular ThinkPad laptop in 1992.
Not only is the product shortage going to adversely affect the
profitability of your company, but it's going to adversely affect
you, too. Why? Because you, as a marketing manager, probably
earn either a bonus or commission from the products you work
to promote, depending on how well they sell. And, of course,
you can't sell what you don't have.
As you can probably tell, the best marketing decisions and
supplier selections aren't enough if your company's demand
forecasts are wrong. Demand planning is the process of
28. estimating how much of a good or service customers will buy. If
you're a producer of a product, this will affect not only the
amount of goods and services you have to produce but also the
materials you must purchase to make them. It will also affect
production scheduling, or the management of
the resources, events, and processes need to create an offering.
For example, if demand is heavy, you might need staff members
to work overtime. Closely related to demand forecasting are
lead times. A product's lead time is the amount of time it takes
for a customer to receive a good or service once it's been
ordered. Lead times also have to be considered when a company
is forecasting demand.
The promotions you run will also affect demand for your
products. Consider what happened to KFC when it came out
with its grilled chicken. As part of the promotion, KFC gave
away coupons for free grilled chicken via Oprah.com. Just 24
hours after the coupons were uploaded to the website, KFC
risked running out of chicken. Customers were turned away.
Others were given "rain checks" (certificates) they could use to
get free grilled chicken later (Weisenthal, 2009).
In addition to looking at the sales histories of their firms,
supply chain managers also consult with marketing managers
and sales executives when they are generating demand
forecasts. Sales and marketing personnel know what promotions
are being planned because they work more closely with
29. customers and know what customers' needs are and if those
needs are changing. Firms also look to their supply chain
partners to help with their demand planning.
Demand-planning software can also be used to create more
accurate demand
forecasts. Demand-planning software can synthesize a variety of
factors to better predict a firm's demand—for example, the
firm's sales history, point-of-sale data, warehouse, suppliers,
and promotion information, and economic and competitive
trends. So a company's demand forecasts are as up-to-date as
possible, some of the systems allow sales and marketing
personnel to input purchasing information into their mobile
devices after consulting with customers.
Inventory Control
Demand forecasting is part of a company's overall inventory
control activities.
Inventory control is the process of ensuring your firm has an
adequate supply of products and a wide enough assortment to
meet your customers' needs. One of the goals of inventory
management is to avoid stockouts. A stockout occurs when you
run out of a product a customer wants. Customers will simply
look elsewhere—a process the Internet has made easier than
ever.
When the attack on the World Trade Center occurred, many
Americans rushed to buy batteries, flashlights, American flags,
30. canned goods, and other products in the event that the
emergency signaled a much bigger attack. Target sold out of
many items and could not replenish them for several days,
partly because its inventory tracking system only counted what
was needed at the
end of the day. Walmart, on the other hand, took count of what
was needed every five minutes. Before the end of the day,
Walmart had purchased enough American flags, for example, to
meet demand and in so doing, completely locked up all their
vendors' flags.
Just-in-Time Inventory Systems
To lower the amount of inventory and still maintain they stock
they need to satisfy their customers, some organizations use
just-in-time inventory systems in both good times and bad.
Firms with just-in-time inventory systems keep very little
inventory on hand. Instead, they contract with their suppliers to
ship them inventory as they need it—and even sometimes
manage their inventory for them—a practice called vendor-
managed inventory (VMI). Dell is an example of a company that
uses a just-in-time inventory system that is vendor-managed.
Dell carries very few component parts. Instead, its suppliers
carry them. They are located in small warehouses near Dell's
assembly plants worldwide and provide Dell with parts "just-in-
time" for them to be assembled (Kumar & Craig, 2007).
Dell's inventory and production system allows customers to get
31. their computers built exactly to their specifications, a
production process that's called mass customization. This helps
keep Dell's inventory levels low. Instead of a huge inventory of
expensive, already-assembled computers consumers may or may
not buy, Dell simply has the parts on hand, which can be
configured or reconfigured should consumers' preferences
change. Dell can more easily return the parts to its suppliers if
at some point it redesigns its computers to better match what its
customers want. And by keeping track of its customers and what
they are ordering, Dell has a better idea of what they might
order in the future and the types of inventory it should hold.
Because mass customization lets buyers "have it their way," it
also adds value to products, for which many customers are
willing to pay.
Product Tracking
Some companies, including Walmart, are beginning to
experiment with new technologies such as electronic product
codes in an effort to better manage their inventories.
An electronic product code (EPC) is similar to a barcode, only
better, because the number on it is truly unique. You have
probably watched a checkout person scan a barcode off a
product identical to the one you wanted—perhaps a pack of
gum—because the barcode on your product was missing or
wouldn't scan. Electronic product codes make it possible to
distinguish between two identical packs of gum. The codes
32. contain information about when the packs of gum were
manufactured, from where they were shipped, and where they
were going. Being able to tell the
difference between "seemingly" identical products can help
companies monitor their expiration dates if the products are
recalled for quality or safety reasons. EPC technology can also
be used to combat "fake" products, or knockoffs, in the
marketplace.
Electronic product codes are stored on radio-frequency
identification (RFID) tags. A radio- frequency identification
(RFID) tag emits radio signals that can record and track a
shipment as it comes in and out of a facility. If you have
unlocked your car door remotely, microchipped your dog, or
waved a tollway tag at a checkpoint, you have used RFID
technology (EPCglobal, n.d.). Because each RFID tag can cost
anywhere from 50 cents to $50 each, they are generally used to
track larger shipments, such as cases and pallets of goods rather
than individual items. See Figure 6.6, "How RFID Tagging
Works," to get an idea.
Figure 6.6 How RFID Tagging Works
Some consumer groups worry that RFID tags and electronic
product codes could be used to track their consumption patterns
or for the wrong purposes. But keep in mind that like your car-
door remote, the codes and tags are designed to work only
within short ranges. (You know that if you try to unlock your
33. car from a mile away using such a device, it won't work.)
6.6 KEY TAKEAWAY
The best marketing decisions and supplier selections aren't
enough if your company's demand forecasts are wrong. Demand
forecasting is the process of estimating how much of a good or
service a customer will buy. If you're a producer of a product,
this will affect not only the amount of goods and services you
have to produce but also the materials you must purchase to
make them. Demand forecasting is part of a company's overall
inventory control activities. Inventory control is the process of
ensuring your firm has an adequate amount of products and a
wide enough assortment of them to meet your customers' needs.
One of the goals of inventory control is to avoid stockouts
without keeping too much of a product on hand. Some
companies are beginning to experiment with new technologies
such as electronic product codes and RFID tags to better
manage their inventories and meet their customers' needs.
6.7 Warehousing and Transportation
LEARNING OBJECTIVES
1. Understand the role warehouses and distribution centers play
in the supply chain.
2. Outline the transportation modes firms have to choose from
and the advantages and disadvantages
of each.
Warehousing
34. At times, the demand and supply for products can be unusually
high. At other times, it can be unusually low. That's why
companies generally maintain a certain amount of safety stock,
often in warehouses. As a business owner, it would be great if
you didn't have excess inventory to store in a warehouse. In an
ideal world, materials or products would arrive at your facility
just in time for you to assemble or sell them. Unfortunately, we
don't live in an ideal world.
Toys are a good example. Most toymakers work year-round to
be sure they have enough toys for sale during the holidays.
However, retailers don't want to buy a huge number of toys in
July. They want to wait until November and December to buy
large amounts of them. Consequently, toymakers warehouse
them until that time. Likewise, during the holiday season,
retailers don't want to run out of toys, so they maintain a certain
amount of safety stock in their warehouses.
Some firms store products until their prices increase. Oil is an
example. Speculators, including investment banks and hedge
funds, have been known to buy, and hold, oil if they think its
price is going to rapidly rise. Sometimes they go so far as to
buy oil tankers and even entire oil fields (Winnett, 2004).
A distribution center is a warehouse or storage facility where
the emphasis is on processing and moving goods on to
wholesalers, retailers, or consumers (Wikipedia, n.d.). A few
years ago, companies were moving toward large, centralized
35. warehouses to keep costs down. In 2005, Walmart opened a 4-
million-square-foot distribution center in Texas. (Four million
square feet is about the size of 18 football fields.)
Today, however, the trend has shifted to smaller warehouses.
The use of smaller warehouses is being driven by customer
considerations rather than costs. The long lead times that result
when companies transport products from Asia, the Middle East,
and South America are forcing international manufacturers and
retailers to shorten delivery times to consumers (Specter, 2009).
Warehousing products regionally, closer to consumers, can also
help a company tailor its product selection to better match the
needs of customers in different regions.
How Warehouses and Distribution Centers Function
So how do you begin to find a product or pallet of products in a
warehouse or distribution center the size of 18 football fields?
To begin with, each type of product that is unique because of
some characteristic—say, because of its manufacturer, size,
color, or model—must be stored and accounted for separate
from other items. To help distinguish it, its manufacturer gives
it its own identification number, called a SKU (stock-keeping
unit) (BusinessDictionary.com).
Warehouses and distribution centers are also becoming
increasingly automated and wired. Some warehouses use robots
to picks products from shelves. At other warehouses, employees
use voice- enabled headsets to pick products. Via the headsets,
36. the workers communicate with a computer that tells them where
to go and what to grab off shelves. As a result, the employees
are able to pick products more accurately than they could by
looking at a sheet of paper.
It's pretty amazing when you think about how the thousands of
products that come in and out of Amazon's distribution centers
every day ultimately end up in the right customer's hands. After
all, how many times have you had to look really hard to find
something you put in your own closet or garage? Processing
orders—order fulfillment—is a key part of the job in supply
chains. Why? Because delivering what was promised, when it
was promised, and the way it was promised drives customer
satisfaction (Thirumalai & Sinha, 2005).
One of the ways companies are improving their order
fulfillment and other supply chain processes is by getting rid of
paper systems and snail mail. Instead of companies receiving
paper orders and sending paper invoices to one another, they
send and receive the documents via electronic data interchange
(EDI). Electronic data interchange (EDI) is a special electronic
format that
companies use to exchange business documents from computer
to computer. It also makes for greater visibility among supply
chain partners because they can all check the status of orders
electronically rather than having to fax or e-mail documents.
Another new trend is cross-docking. Products that are cross-
37. docked spend little or no time in warehouses. As Figure 6.7,
"How Cross-Docking Works" shows, a product being cross-
docked will be delivered via truck to a dock at a warehouse
where it is unloaded and put on other trucks bound for retail
outlets.
Figure 6.7 How Cross-Docking Works
Transportation
Not all goods and services need to be physically transported.
When you get a massage, oil change, or a manicure, the services
pass straight from the provider to you. Other products can be
transported electronically via electronic networks, computers,
phones, or fax machines. Downloads of songs, software, and
books are an example. So are cable and satellite television and
psychic hotline readings delivered over the phone.
Other products, of course, have to be physically shipped.
Logistics refers to the physical flow of materials in the supply
chain. You might be surprised by some of the physical
distribution methods that companies use. To get through
crowded, narrow streets in Tokyo, Seven-Eleven Japan delivers
products to its retail stores via motorcycles. In some countries,
Coca-Cola delivers syrup to its bottlers via camelback. More
commonly, though, products that need to be transported
physically to get to customers are moved via air, rail, truck,
water, or pipeline.
Companies face different tradeoffs when choosing
38. transportation methods. Which is most important? Speed? Cost?
Frequency of delivery? The flexibility to respond to different
market conditions? Again, it depends on your customers.
Goya Foods has many challenges due to the variety of
customers it serves. The company sells more than 1,600 canned
food products. Because the types of beans people prefer often
depends on their cultures, Goya sells about 40 varieties of beans
alone. Almost daily, Goya's truck drivers deliver products to
tens of thousands of US food stores, from supermarket chains in
Texas to independent mom-and-pop bodegas in New York City.
Delivering daily is more costly than dropping off jumbo
shipments once a week and letting stores warehouse goods, says
the company's CEO, Peter Unanue. However, it's more of a just-
in-time method that lets Goya offer stores a greater variety and
ensure that products match each store's demographics. "Pink
beans might sell in New York City but not sell as well in Texas
or California," says Unanue (De Lollis, 2008).
6.7 KEY TAKEAWAY
Some firms store products until their prices increase. A
distribution center is a warehouse or storage facility where the
emphasis is on processing and moving goods on to other parts
of the supply chain. Warehousing products regionally can help a
company tailor its product selection to better match the needs of
customers in different regions. Logistics refers to the physical
flow of materials in the supply chain. Not all goods and services
39. need to be physically transported. Some are directly given to
customers or sent to them electronically. Products that need to
be transported physically to get to customers are moved via air,
rail, truck, water, and pipelines. The transportation modes a
firm uses should be based on what its customers want and are
willing to pay for.
6.8 The Pricing Framework and a Firm's Pricing Objectives
LEARNING OBJECTIVES
1. Understand the factors in the pricing framework.
2. Explain the different pricing objectives organizations have to
choose from.
Prices can be changed and matched by your competitors.
Consequently, your product's price alone might not provide your
company with a sustainable competitive advantage.
Nonetheless, prices can attract consumers to different retailers
and businesses to different suppliers.
Organizations must remember that the prices they charge should
be consistent with the needs of their customers, their offerings,
promotions, and distribution strategies. In other words, it
wouldn't make sense to promote a high-end, prestige product,
make it available in only a limited number of stores, and then
sell it for an extremely low price. The price, product, promotion
(communication), and placement (distribution) of a good or
service should convey a consistent image.
The Pricing Framework
40. Before pricing a product, an organization must determine its
pricing objectives. In other words, what does the company want
to accomplish with its pricing? Companies must also estimate
demand for the product or service, determine the costs, and
analyze all factors (e.g., competition, regulations, and economy)
affecting price decisions. Then, to convey a consistent image,
the organization should choose the most appropriate pricing
strategy and determine policies and conditions regarding price
adjustments. The basic steps in the pricing framework are
shown in Figure 6.8, "The Pricing Framework."
Figure 6.8 The Pricing Framework
The Firm's Pricing Objectives
Different firms want to accomplish different things with their
pricing strategies. For example, one firm may want to capture
market share, another may be solely focused on maximizing its
profits, and another may want to be perceived as having
products with prestige. Some examples of different pricing
objectives companies may set include profit-oriented objectives,
sales-oriented objectives, and status quo objectives.
Earning a Targeted Return on Investment (ROI)
ROI, or return on investment, is the amount of profit an
organization hopes to make given the amount of assets, or
money, it has tied up in a product. ROI is a common pricing
objective for many firms. Companies typically set a certain
percentage, such as 10 percent, for ROI in a product's first year
41. following its launch. So, for example, if a company has
$100,000 invested in a product and is expecting a 10 percent
ROI, it would want the product's profit to be $10,000.
Maximizing Profits
Many companies set their prices to increase their revenues as
much as possible relative to their costs. However, large
revenues do not necessarily translate into higher profits. To
maximize its profits, a company must also focus on cutting
costs or implementing programs to encourage customer loyalty.
In weak economic markets, many companies manage to cut
costs and increase their profits, even though their sales are
lower. How do they do this? The Gap cut costs by doing a better
job of controlling inventory. The retailer also reduced its real
estate holdings to increase its profits when its sales were down
during an economic recession. Other firms such as Dell cut jobs
to increase profits. Meanwhile, Walmart tried to lower its prices
so as to undercut its competitors' prices to attract more
customers. After it discovered that wealthier consumers who
didn't usually shop at Walmart before the 2009 recession were
frequenting its stores, Walmart decided to upgrade some of its
offerings, improve the checkout process, and improve the
appearance of some of its stores to keep these high-end
customers happy and enlarge its customer base. Other firms
increased their prices or cut back on their marketing and
advertising expenses.
42. A firm has to remember, however, that prices signal value. If
consumers do not perceive that a product has a high degree of
value, they probably will not pay a high price. Furthermore,
cutting costs cannot be a long-term strategy if a company wants
to maintain its image and position in the marketplace.
Maximizing Sales
Maximizing sales involves pricing products to generate as much
revenue as possible, regardless of what it does to a firm's
profits. When companies are struggling financially, they
sometimes try to generate cash quickly to pay their debts. They
do so by selling off inventory or cutting prices temporarily.
Such cash may be necessary to pay short-term bills, such as
payroll. Maximizing sales is typically a short-term objective
since profitability is not considered.
Maximizing Market Share
Some organizations try to set their prices in a way that allows
them to capture a larger share of the sales in their industries.
Capturing more market share doesn't necessarily mean a firm
will earn higher profits, though. Nonetheless, many companies
believe capturing a maximum amount of market share is
downright necessary for their survival. In other words, they
believe if they remain a small competitor, they will fail. Firms
in the cellular phone industry are an example. The race to be the
biggest cell phone provider has hurt companies such as
Motorola. In the last decade,
43. Motorola held only 10 percent of the cell phone market, and its
profits on product lines were negative.
Maintaining the Status Quo
Sometimes a firm's objective may be to maintain the status quo
or simply meet, or equal, its competitors' prices or keep its
current prices. Airline companies are a good example. Have you
ever noticed that when one airline raises or lowers its prices,
the others all do the same? If consumers don't accept an airline's
increased prices and fees such as the charge for checking in
with a representative at the airport rather than checking in
online, other airlines may decide not to implement the extra
charge, and the airline charging the fee may drop it. Companies,
of course, monitor their competitors' prices closely when they
adopt a status quo pricing objective.
6.8 KEY TAKEAWAY
Price is the only marketing variable that generates money for a
company. All the other variables (product, communication,
distribution) cost organizations money. A product's price is the
easiest marketing variable to change and also the easiest to
copy. Before pricing a product, an organization must determine
its pricing objective(s). A company can choose from pricing
objectives such as maximizing profits, maximizing sales,
capturing market share, achieving a target return on investment
(ROI) from a product, and maintaining the status quo in terms
of the price of a product relative to competing products.
44. 6.9 Factors That Affect Pricing Decisions
LEARNING OBJECTIVES
1. Understand the factors that affect a firm's pricing decisions.
2. Understand why companies must conduct research before
setting prices in international markets.
3. Learn how to calculate the breakeven point.
Having a pricing objective isn't enough. A firm also has to look
at a myriad of other factors before setting its prices. Those
factors include the offering's costs, the demand, the customers
whose needs it is designed to meet, the external environment—
such as the competition, the economy, and government
regulations—and other aspects of the marketing mix, such as the
nature of the offering, the current stage of its product life cycle,
and its promotion and distribution.
If a company plans to sell its products or services in
international markets, research on the factors for each market
must be analyzed before setting prices. Organizations must
understand buyers,
competitors, the economic conditions, and political regulations
in other markets before they can compete successfully.
Next, we look at each of the factors and what they entail.
Customers
How will buyers respond? Three important factors are whether
the buyers perceive the product offers value, how many buyers
there are, and how sensitive they are to changes in price. In
45. addition to gathering data on the size of markets, companies
must try to determine how price- sensitive customers are. Will
customers buy the product, given its price? Or will they believe
the value is not equal to the cost and choose an alternative, or
decide they can do without the product or service? Equally
important is how much buyers are willing to pay for the
offering. Figuring out how consumers will respond to prices
involves judgment as well as research.
Price elasticity, or people's sensitivity to price changes, affects
the demand for products. Think about a pair of sweatpants with
an elastic waist. You can stretch an elastic waistband, but it's
much more difficult to stretch the waistband of a pair of dress
slacks. Elasticity refers to the amount of stretch or change. The
waistband of sweatpants may stretch if you pull on it.
Similarly, the demand for a product may change if the price
changes. Imagine the price of a 12- pack of sodas changing to
$1.50 a pack. People are likely to buy a lot more soda at $1.50
per 12- pack than they are at $4.50 per 12-pack.
Conversely, the waistband on a pair of dress slacks remains the
same (doesn't change) whether you pull on it or not. Likewise,
demand for some products won't change even if the price
changes. The formula for calculating the price elasticity of
demand is as follows.
Price elasticity = percentage change in quantity demanded ÷
percentage change in price
46. Figure 6.9 The Relationship Between Price and Demand Elastic
demand
Price goes down as demand goes up
Price goes up when demand goes up
When consumers are very sensitive to the price change of a
product—that is, they buy more of it at low prices and less of it
at high prices—the demand for it is price elastic. Durable goods
such as TVs, stereos, and freezers are more price elastic than
necessities. People are more likely to buy them when their
prices drop and less likely to buy them when their prices rise.
By contrast, when the demand for a product stays relatively the
same and buyers are not sensitive to changes in its price, the
demand is price inelastic. Demand for essential products such as
many basic food and first-aid products is not as affected by
price changes as demand for many nonessential goods.
The number of competing products and substitutes available
affects the elasticity of demand. Price elasticity is also affected
by whether a person considers a product a necessity or a luxury
as well as the percentage of a person's budget allocated to
different products and services. Some products, such as
cigarettes, tend to be relatively price inelastic since most
smokers keep purchasing them regardless of price increases and
the fact that other people see cigarettes as unnecessary. Service
providers, such as utility companies in markets in which they
have a monopoly (only one provider), face more inelastic
47. demand since no substitutes are available.
Competitors
How competitors price and sell their products will affect a
firm's pricing decisions. If you wanted to buy a certain pair of
shoes, but the price was 30 percent less at one store than
another, what would you do? Because companies want to
establish and maintain loyal customers, they will often match
their competitors' prices. Some retailers, such as Home Depot,
will give you an extra discount if you find the same product for
less somewhere else. Similarly, if one company offers you free
shipping, you might discover other companies will, too. With so
many products sold online, consumers can compare the prices of
many merchants before making a purchase decision.
Inelastic demand
The availability of substitute products affects a company's
pricing decisions as well. If you can find a similar pair of shoes
selling for 50 percent less at a third store, would you buy them?
There's a good chance you might.
The Economy and Government Laws and Regulations
The economy also has a tremendous effect on pricing decisions.
In Week 1, we noted that factors in the economic environment
include interest rates and unemployment levels. When the
economy is weak and many people are unemployed, companies
often lower their prices. In international markets, currency
exchange rates also affect pricing decisions.
48. Pricing decisions are affected by federal and state regulations.
Regulations are designed to protect consumers, promote
competition, and encourage ethical and fair behavior by
businesses. For example, the Robinson-Patman Act limits a
seller's ability to charge different customers different prices for
the same products. The intent is to protect small businesses
from larger businesses that try to extract special discounts and
deals for themselves to eliminate their competitors. However,
cost differences, market conditions, and competitive pricing by
other suppliers can justify price differences in some situations.
In other words, the practice isn't illegal under all circumstances.
You have probably noticed that restaurants offer senior citizens
and children discounted menus. Movie theaters also charge
different people different prices based on their ages and charge
different amounts based on the time of day, with matinees
usually less expensive than evening shows. These price
differences are legal.
Price fixing, which occurs when firms get together and agree to
charge the same prices, is illegal. Usually, price fixing involves
setting high prices so consumers must pay a high price
regardless of where they purchase a good or service. Video
systems, LCD (liquid crystal display) manufacturers, auction
houses, and airlines are examples of offerings in which price
fixing existed. When a company is charged with price fixing, it
is usually ordered to take some type of action to reach a
49. settlement with buyers.
Price fixing has occurred over the years. Nintendo and its
distributors in the European Union were charged with price
fixing and increasing the prices of hardware and software.
Sharp, LG, and Chungwa collaborated and fixed the prices of
the LCDs used in computers, cell phones, and other electronics.
Virgin Atlantic Airways and British Airways were also involved
in price fixing for their flights. Sotheby's and Christie's, two
large auction houses, used price fixing to set their commissions.
By requiring sellers to keep a minimum price level for similar
products,
unfair trade laws protect smaller businesses. Unfair trade laws
are state laws preventing large businesses from selling products
below cost (as loss leaders) to attract customers to the store.
When companies act in a predatory manner by setting low prices
to drive competitors out of business, it is a predatory pricing
strategy.
Similarly, bait-and-switch pricing is illegal in many states. Bait
and switch, or bait advertising, occurs when a business tries to
"bait," or lure customers with an incredibly low-priced product.
Once customers take the bait, sales personnel attempt to sell
them more expensive products. Sometimes the customers are
told the cheaper product is no longer available.
Product Costs
The costs of the product—its inputs—including the amount
50. spent on product development, testing, and packaging required
have to be considered when a pricing decision is made. So do
the costs related to promotion and distribution. For example,
when a new offering is launched, its promotion costs can be
very high because people need to be made aware that it exists.
Thus, the offering's stage in the product life cycle can affect its
price.
The point at which total costs equal total revenue is known as
the breakeven point (BEP). For a company to be profitable, a
company's revenue must be greater than its total costs. If total
costs exceed total revenue, the company suffers a loss.
Total costs include both fixed costs and variable costs. Fixed
costs, or overhead expenses, are costs that a company must pay
regardless of its level of production or level of sales. A
company's fixed costs include items such as rent, leasing fees
for equipment, contracted advertising costs, and insurance. As a
student, you may also incur fixed costs such as the rent you pay
for an apartment. You must pay your rent whether you stay
there for the weekend or
not. Variable costs are costs that change with a company's level
of production and sales. Raw materials, labor, and commissions
on units sold are examples of variable costs. You, too, have
variable costs, such as the cost of gasoline for your car or your
utility bills, which vary depending on how much you use.
Consider a small company that manufactures specialty DVDs
51. and sells them through different retail stores. The
manufacturer's selling price (MSP) is $15, which is what the
retailers pay for the DVDs. The retailers then sell the DVDs to
consumers for an additional charge. The manufacturer has the
following charges:
Copyright and distribution charges for the titles
$150,000
Package and label designs for the DVDs
$10,000
Advertising and promotion costs
$40,000
Reproduction of DVDs
$5 per unit
Labels and packaging
$1 per unit
Royalties
$1 per unit
In order to determine the breakeven point, you must first
calculate the fixed and variable costs. To make sure all costs are
included, you may want to highlight the fixed costs in one color
and the variable costs in another color. Then, using the formulas
below, calculate how many units the manufacturer must sell to
break even.
The formula for BEP is as follows:
BEP = total fixed costs (FC) ÷ contribution per unit (CU)
52. contribution per unit = MSP – variable costs (VC)
BEP = $200,000 ÷ ($15 – $7) = $200,000 ÷ $8 = 25,000 units to
break even
To determine the breakeven point in dollars, you simply
multiply the number of units to break even by the MSP. In this
case, the BEP in dollars would be 25,000 units times $15, or
$375,000.
6.9 KEY TAKEAWAY
In addition to setting a pricing objective, a firm has to look at a
number of factors before setting its prices. These factors
include the offering's costs, the customers whose needs it is
designed to meet, the external environment—such as the
competition, the economy, and government regulations—and
other aspects of the marketing mix, such as the nature of the
offering, the stage of its product life cycle, and its promotion
and distribution. In international markets, firms must look at
environmental factors and customers' buying behavior in each
market. For a company to be profitable, revenues must exceed
total costs.
6.10 Pricing Strategies
LEARNING OBJECTIVES
1. Understand introductory pricing strategies.
2. Understand the different pricing approaches that businesses
use.
Once a firm has established its pricing objectives and analyzed
53. the factors that affect how it should price a product, the
company must determine the pricing strategy (or strategies) that
will help it achieve those objectives. As we have indicated,
firms use different pricing strategies for their offerings. And
often, the strategy depends on the customer or the stage of life
cycle the offerings are in. Next, we'll examine three strategies
businesses often consider when a product is introduced and then
look at several different pricing approaches that companies use
during the product life cycle.
Customer-Focused Pricing Strategies
In many instances, it is the customer who is the ultimate
determiner of the correct price. The customer may want a price
that is based on his or her perception of the value of the
benefits received from the offering, and therefore the company
needs to find the price that represents that value. This is called
value-based pricing. So long as that price exceeds the
company’s costs and allows the company to make the
appropriate return or profit, value-based pricing represents a
good match between the customer’s needs and the company’s
pricing objectives. It is important to note that a value-based
price is not necessarily a low price. It may be that the value
price greatly exceeds the company’s costs and allows it to make
a high rate of return.
A company might consider good-value pricing, especially in
times of economic uncertainty. Good-value pricing strategy
54. offers a right combination of benefits at a fair price. When the
economy is not strong, customers might be more willing to
accept a lesser degree of quality in goods and services so long
as the price is right. The fast food industry was quick to pick up
on the needs of consumers after 2008 by offering dollar menus.
Retailer outlet malls are also an outgrowth of the concept of
good-value pricing. Good-value pricing is so popular with many
consumers that some retailers have adopted everyday low price
policies where their consumers can always expect their stores to
have the lowest prices available on brand merchandise. Walmart
is a prominent example of a retailer known for its everyday low
price policy.
Another consumer-focused pricing strategy is value-added
pricing, where a consumer pays a regular price for a product but
receives something "extra" with the purchase. This is a
commonly used strategy when dropping a price may have long-
term consequences for the brand and its image, so the company
delivers more value that the customer is not expecting. For
example, it is common for high-end cosmetics companies to
include samples of the company's other products with purchase,
or high-end automobile dealerships to include free service with
each car purchase. Value-added pricing can also create a
competitive advantage.
Introductory Pricing Strategies
Think of products that have been introduced in the last decade
55. and how products were priced when they entered the market.
Remember when the iPhone was introduced, its price was
almost $700. Since then, the price has dropped considerably
even for new models. The same is true for DVD players, LCD
televisions, digital cameras, and many high-tech products. As
we mentioned in Week 5 as part of our discussion on offerings,
a skimming price strategy is when a company sets a high initial
price for a product. The idea is to go after consumers who are
willing to pay a high price (top of the market) and buy products
early. This way, a company recoups its investment in the
product faster.
The easy way to remember a skimming approach is to think of
the turkey gravy at Thanksgiving. When the gravy is chilled, the
fat rises to the top and is often "skimmed" off before serving.
Price skimming is a pricing approach designed to skim that top
part of the gravy, or the top of the market. Over time, the price
of the product goes down as competitors enter the market and
more consumers are willing to purchase the offering.
In contrast to a skimming approach, a penetration pricing
strategy is one in which a low initial price is set. Often, many
competitive products are already in the market. The goal is to
get as much of the market as possible to try the product.
Penetration pricing is used on many new food products, health
and beauty supplies, and paper products sold in grocery stores
and mass merchandise stores such as Walmart, Target, and
56. Kmart.
Other Pricing Approaches
Companies can choose many ways to set their prices. Many
stores use cost-plus pricing, in which they take the cost of the
product and then add a profit to determine a price. The strategy
helps ensure that a company's products' costs are covered and
the firm earns a certain amount of profit. When companies add a
markup, or an amount added to the cost of a product, they are
using a form of cost-plus pricing. When products go on sale,
companies mark down the prices, but they usually still make a
profit. Potential markdowns or price reductions should be
considered when deciding on a starting price.
Many pricing approaches have a psychological appeal. Odd-
even pricing occurs when a company prices a product a few
cents or a few dollars below the next dollar amount. For
example, instead of being priced $10.00, a product will be
priced at $9.99. Likewise, a $20,000 automobile might be priced
at $19,998, although the product will cost more once taxes and
other fees are added. See Figure 6.10 for an example of odd-
even pricing.
Figure 6.10
Walmart uses a combination of odd-even pricing and everyday
low pricing in this store in Gladstone, Missouri.
Source: Photo by Walmart. (2011). Flickr. Used under the terms
of the Creative Commons Attribution 2.0 Generic license.
57. Prestige pricing occurs when a higher price is used to give an
offering a high-quality image. Some stores have a quality
image, and people perceive that perhaps the products from those
stores are of higher quality. Many times, two different stores
carry the same product, but one store prices it higher because of
the store's perceived higher image. Neckties are often priced
using a strategy known as price lining, or price levels. In other
words, there may be only a few price levels ($25, $50, and $75)
for the ties, but a large assortment of them at each level. Movies
and music often use price lining. You may see a lot of movies
and CDs for $15.99, $9.99, and perhaps $4.99, but you won't
see a lot of different price levels.
Remember when you were in elementary school and many
students bought teachers little gifts before the holidays or on
the last day of school. Typically, parents set an amount such as
$5 or $10 for a teacher's gift. Knowing that people have certain
maximum levels that they are willing to pay for gifts, some
companies use demand backward pricing. They start with the
price demanded by consumers (what they want to pay) and
create offerings at that price. If you shop before the holidays,
you might see a table of different products being sold for $5
(mugs, picture frames, ornaments) and another table of products
being sold for $10 (mugs with chocolate, decorative trays).
Similarly, people have certain prices they are willing to pay for
wedding gifts—say, $25, $50, $75, or $100—so stores set up
58. displays of gifts sold at these different price levels. IKEA also
sets a price for a product—which is what the company believes
consumers want to pay for it—and then, working backward from
the price, designs the product.
Leader pricing involves pricing one or more items low to get
people into a store. The products with low prices are often on
the front page of store ads and "lead" the promotion. For
example, prior to Thanksgiving, grocery stores advertise turkeys
and cranberry sauce at very low prices. The goal is to get
shoppers to buy many more items in addition to the low- priced
items. Leader or low prices are legal; however, as you learned
earlier, loss leaders, or items priced below cost in an effort to
get people into stores, are illegal in many states.
Sealed bid pricing is the process of offering to buy or sell
products at prices designated in sealed bids. Companies must
submit their bids by a certain time. The bids are reviewed all at
once, and the most desirable one is chosen. Sealed bids can
occur on either the supplier or the buyer side. Via sealed bids,
oil companies bid on land for potential drilling purposes, and
the highest bidder is awarded the right to drill. Similarly,
consumers sometimes bid on lots to build houses. The highest
bidder gets the lot. On the supplier side, contractors often bid
on different jobs and the lowest bidder is awarded the job. The
government often makes purchases based on sealed bids.
Projects funded by stimulus money were awarded based on
59. sealed bids.
Bids are also being used online. Online auction sites such as
eBay give customers the chance to bid and negotiate prices with
sellers until an acceptable price is agreed upon. When a buyer
lists what he or she wants to buy, sellers may submit bids. This
process is known as
a forward auction. If the buyer not only lists what he or she
wants to buy but also states how much he or she is willing to
pay, a reverse auction occurs. The reverse auction is finished
when at least one firm is willing to accept the buyer's price.
Going-rate pricing occurs when buyers pay the same price
regardless of where they buy the product or from whom. Going-
rate pricing is often used on commodity products such as wheat,
gold, or silver. People perceive the individual products in
markets such as these to be largely the same. Consequently,
there's a "going" price for the product that all sellers receive.
Price bundling occurs when different offerings are sold together
at a price that's typically lower than the total price a customer
would pay by buying each offering separately. Combo meals
and value meals sold at restaurants are an example. Companies
such as McDonald's have promoted value meals for a long time
in many different markets. Other products such as shampoo and
conditioner are sometimes bundled together. Automobile
companies bundle product options. For example, power locks
and windows are often sold together, regardless of whether
60. customers want only one or the other. The idea behind bundling
is to increase an organization's revenues.
Captive pricing is a strategy firms use when consumers must
buy a given product because they are at a certain event or
location or they need a particular product because no substitutes
will work. Concessions at a sporting event or a movie provide
examples of how captive pricing is used. Maybe you didn't pay
much to attend the game, but the snacks and drinks were
extremely expensive. Similarly, if you buy a razor and must
purchase specific blades for it, you have experienced captive
pricing. The blades are often more expensive than the razor
because customers do not have the option of choosing blades
from another manufacturer.
Pricing products consumers use together (such as blades and
razors) with different profit margins is also part of product mix
pricing. Recall from Week 5 that a product mix includes all the
products a company offers. If you want to buy an automobile,
the base price might seem reasonable, but the options such as
floor mats might earn the seller a much higher profit. While
consumers can buy floor mats at stores like Walmart for $30,
many people pay almost $200 to get the floor mats that go with
the car from the dealer.
Nearly everyone has a cell phone. Are you aware of how many
minutes you spend talking or texting and what it costs if you go
over the limits of your phone plan? Maybe not if your plan
61. involves two-part pricing. Two-part pricing means there are two
different charges customers pay. In the case of a cell phone, a
customer might pay a charge for one service such as 1,000
minutes, and then pay a separate charge for each minute over
1,000. Get out your cell phone and look at how many minutes
you have used. Many people are shocked at how many minutes
they have used or the number of messages they have sent in the
last month.
Have you ever seen an ad for a special item only to find out it is
much more expensive than what you recalled seeing in the ad?
A company might advertise a price such as $25*, but when you
read the fine print, the price is really five payments of $25 for a
total cost of $125. Payment pricing, or allowing customers to
pay in installments, is a strategy that helps customers break
their payments into smaller amounts, which can persuade
customers to buy higher-priced products.
Promotional pricing is a short-term tactic designed to get people
into a store or to purchase more of a product. Examples of
promotional pricing include back-to-school sales, rebates,
extended warranties, and going-out-of-business sales. Rebates
are a great strategy for companies because consumers think
they're getting a great deal. Many consumers forget to request
the rebate. Extended warranties have become popular for all
types of products, including automobiles, appliances,
electronics, and even athletic shoes. If you buy a vacuum for