They connect brands with consumers in what marketing agency OgilvyAction calls the "last mile" - the last stop on the consumer's journey to purchase. In fact, many marketers are now embracing the concept of shopper marketing, using in-store promotions and advertising to extend brand equity to the “last mile” and drive favorable in-store purchase decisions. In fact, that's the tagline of discount retailer Dollar General—and it's a winning proposition.
It is the country's largest breeder of poultry (77,000 rotisserie chickens a day at $4.99), but also the country's largest seller of fine wines (including a Chateau Cheval Blanc Premier Grand Cru Classe at $1,750 a bottle) .
Segmentation, Targeting, Differentiation, and Positioning Decisions
You can find most consumer brands not only in department stores, but also in discount mass merchandisers, discount discount stores, and all over the web. For example, Whole Foods Market has fewer than 300 stores and slightly more than $8 billion in sales compared to Walmart's more than 8,400 stores worldwide and $408 billion in sales.15 How does this small grocery chain compete with Walmart. Whole Foods Market succeeds by carefully positioning itself away from Walmart (remember the Whole Foods Market story in Chapter 10?).
It targets a select group of affluent customers and offers them "organic, natural and gourmet foods, all wrapped in Earth Day politics." In fact, a devoted Whole Foods Market customer is more likely to boycott their local Walmart than to shop there. Whole Foods Market can't match Walmart's massive economies of scale, incredible volume buying power, ultra-efficient logistics, wide selection and hard-to-beat prices. Positioning itself firmly away from Walmart and other price-goers, Whole Foods Market has grown rapidly over the past two decades and is now more than sustaining itself, even in tougher economic times.
Product Assortment and Services Decision
Over the past decade, Cabela's has evolved from a mail-order catalog business into a popular multi-channel retailer valued at $2.6 billion. Despite Cabela's often remote locations, customers flock to its 31 superstores to buy hunting, fishing and outdoor gear. Half of Cabela's customers drive 100 miles or more to get there, and many travel up to 550 miles.
What is it that draws these hordes of reluctant shoppers to distant Cabela's stores? In each of its stores, Cabela's has created what amounts to a natural history theme park for nature enthusiasts. Elsewhere in the store, Cabela's has created an African diorama, complete with African animals depicted in their natural habitats—a.
Shopping atmosphere: The real magic of Cabela lies in the experiences it creates for those who visit. Cabela has even created a new leadership position: taxidermy purchasing specialist, someone who sources taxidermied animals and displays them in authentic scenes. Jolene says she's been to six other Cabela's stores; it's a family tradition to visit them on a road trip.
Price Decision
These places include coffee shops and cafes, shopping malls, bookstores, children's play spaces, supermarkets and urban green markets. For example, today's bookstores have become part bookstore, part library, part living room, and part coffee house. On an early night at your local Barnes & Noble, for example, you're likely to find backpacking high school students doing homework with friends in the coffee bar.
Promotion Decision
Place Decision
They usually contain a supermarket, perhaps a discount store, and several service stores – dry cleaners, drug store, video rental store, hardware store, local restaurant, or other stores.18. With more than 100,000 malls in the United States, many experts suggest that the country is now "overpainted." During the 1990s, mall space grew at about twice the rate of population growth. Second, malls face increased competition—everything from the rapid growth of online shopping to ever-expanding sales from mega-retailers like Walmart and Costco.
Although some traditional malls are dying, other types of centers are still being built. The current trend is towards the so-called power centres. Power centers are huge, unenclosed shopping centers that consist of a long strip of retail stores, including large, freestanding anchors such as Walmart, Home Depot, Costco, Best Buy, Michaels, PetSmart, and OfficeMax. The idea is to combine the hominess and community of an old village square with the fashionable city shops; the smell and feel of a neighborhood park with the brutal convenience of a strip mall." On the whole, today's malls are more about "creating places to be rather than just places to buy."19.
A group of retail businesses built in one location that is planned, developed, owned and managed as a unit. Malls: The current trend is towards “big power centers” on the one hand and smaller ones. In general, today's malls are more about "creating places to be rather than just places to shop."
A Slowed Economy and Tighter Consumer Spending
They need to consider the following retail developments when planning and implementing their competitive strategies.
New Retail Forms, Shortening Retail Life Cycles, and Retail Convergence
The Rise of Megaretailers
Growth of Nonstore Retailing
In a recent ranking of the top 500 online retail websites, 58 percent were multichannel retailers.28 For example, Macy's enhanced website complements its more than 800 Macy's stores across the country. Although many Macy's customers shop online, the website offers a series of features designed to build loyalty to Macy's and draw customers to stores. Like many retailers, Macy's has discovered that its best customers shop online as well as offline.
When our customers shop [both] online and in stores, they spend 20 percent more in stores than the average in-store shopper, and 60 percent more online than the average online shopper at Macys.com," says the Macys chairman .com.
Growing Importance of Retail Technology
Green Retailing
For example, new Safeway stores employ extensive recycling and composting programs, wind energy and solar panels for power, and regionally sourced sustainable building materials. Its new eco-friendly restaurants are designed from the bottom up with a whole new eco-attitude.31. A new "green" McDonald's in Cary, North Carolina, is built and furnished mostly with reclaimed building materials.
Then, what little water they need comes from rainwater channeled from the roof and condensation from the super-high-efficiency HVAC system. More than ever, our consumers are aware of the choices and behaviors that affect the world around us,” says a Safeway marketing executive. For example, Amazon.com works closely with the manufacturers of many of the products it sells to reduce and simplify their packaging.
Its new eco-friendly restaurants are designed from the ground up with a whole new ecological attitude. For example, Amazon.com's efforts to reduce packaging increase customer convenience and eliminate "no-wrap" while saving on packaging costs. And an earth-friendly McDonald's restaurant not only attracts customers and helps save the planet, but also costs less to operate.
Global Expansion of Major Retailers
Grainger's 600 branches, 22 strategically located distribution centers, more than 18,000 employees and innovative website handle more than 115,000 transactions per day and 98 percent of orders are shipped within 24 hours. Grainger's customers include organizations ranging from factories, garages and grocery stores to schools and military bases. Selling and Promotion: Wholesalers' sales forces help manufacturers reach many small customers at a low cost.
Warehousing: Wholesalers hold inventory, thereby reducing the inventory costs and risks of suppliers and customers. Market information: Wholesalers provide information to suppliers and customers about competitors, new products and price developments. Wholesale: Many of the country's largest and most important wholesalers—such as Grainger—are largely unknown to end consumers.
The different types of limited-service wholesalers perform a variety of specialized functions in the distribution channel. The third major form of wholesale is wholesale through manufacturers' sales branches and offices, by sellers or buyers themselves, rather than through independent wholesalers. Like retailers, wholesalers must segment and define their target markets and differentiate and position themselves effectively; they can't serve everyone.
Marketing Mix Decisions
Retailing (p 374)
Describe the elements of the atmosphere of the physical store, such as colors, lighting, music, scents and furnishings. Use of IT; Reflective Thinking) 2. Purchase a product of your choice on Amazon.com. consumer reviews influence your perception of a product or brand offered. Check your understanding of the concepts and key terms using the mypearsonmarketinglab study plan for this chapter.
A shopper stands in front of the magic mirror, scans the barcode of the cosmetics they are interested in, and practically tries it on without opening the package. This is just one of the interactive digital technologies that retailers are experimenting with. keep an eye out for many more. Between 2004 and 2009, Asian card transactions grew by 158 percent, approaching a quarter of global transaction volume.
It's no surprise that Zappos.com has an almost cult-like following of repeat customers. How Zappos.com has differentiated itself from other retailers through each element of the retail marketing mix. What is the relationship between how Zappos.com treats its employees and how it treats its customers.
INTRODUCING TESCO
Furthermore, insufficient inventory can result in lost sales, while excessive inventory increases costs and lowers profit margins. One measure of a retailer's inventory management effectiveness is its inventory turnover rate (also called inventory turnover rate for manufacturers). Calculate the gross margin percentage for a retailer with annual sales and cost of goods sold.
Determine the inventory turnover rate if this retailer has an average inventory costing $750,000 with cost of goods sold. If this company's stock turnover rate last year was 3.5, the stock turnover rate you just calculated is better or worse. Zappos customers enjoy benefits like free shipping both ways, surprise upgrades to overnight service, a 365-day return policy, and a call center that's always open.
Customers are also delighted by employees who are empowered to spontaneously dispense rewards based on unique needs. Why did Amazon.com buy Zappos.com, since it already sells what Zappos.com sells. For years residents have called for more choices in southern Ontario, a growing suburb previously populated by more cows than people.
SIZING UP THE U.S. MARKET
INTRODUCING FRESH & EASY
NOT QUITE A HIT
