chapter 16 managing retailing, wholesaling and logistics mendoza

TOP 10 Learning Questions for

Chapter 16: Managing Retailing, Wholesaling and Logistics

Mary Rose R. MendozaSeptember 23, 2010

Marketing Management Class Prof. Remigio Joseph De Ungria

rosemendoza.blogspot.com

1. The following are major types of retailer except _____________.

a) Discount storeb) Department storec) Catalog showroomd) Supermarkete) Brokers and agents

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Specialty Store

Department Store

Supermarket

Convenience Store

Discount Store

Off-price Retailer

Superstore Catalog Showroom

Major Retail Types


A retail store is any business enterprise whose sales volume primarily comes from selling goods or services directly to final consumers for personal, nonbusiness use.

Brokers and agents fall under major wholesaler types whose activities involve selling goods or services to those buying for resale or business use. They facilitate buying and selling on a commission of 2% to 6%of the selling price.

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A “retailer” sells to final consumers.


1. The following are major types of retailer except _____________.

a) Discount storeb) Department storec) Catalog showroomd) Supermarkete) Brokers and agents

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2. ____________is a level of retailer service in which customers are willing to carry out their own locate-compare-select process to save money.

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a) Self-serviceb) Self-selectionc) Limited Serviced) Full Servicee) Assisted Service

rosemendoza.blogspot.com 7

Self-service

Self-selection

Limited Service

Full service

LEVELS OF SERVICE

Customer Carry out his own locate-compare-select process;

Customer could Self-Locate or may Ask assistance if needed;

Customer Need more information and assistance;

Customer Prefer to be waited during locate-compare-select process;


“LESS” Means “MORE” in Retailing Trends

Self-service is the cornerstone of all discount operations. This is a level of service which is adopted by discount stores which prefer to offer lower prices as a bargain for less service.

This approach is in contrast with conventional retail stores which typically increases their prices to cover costs incurred for increased services.


2. ____________is a level of retailer service in which customers are willing to carry out their own locate-compare-select process to save money.

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a) Self-serviceb) Self-selectionc) Limited Serviced) Full Servicee) Assisted Service


3. Avon and Mary Kay Cosmetics are businesses which could be categorized to what type of non-store retailing?

a) Direct marketingb) Direct sellingc) Network marketingd) Automatic vendinge) Buying services

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Direct Selling

Direct Marketing

Automatic Vending

Buying Service

Nonstore Retailers


Direct Selling is a non-retailing category which includes selling door-to-door or at home sales parties.

It is also called multilevel marketing or network marketing, which works by recruiting independent business people who act as distributors. Distributors’ earnings come from percentage sales of their recruits and earnings made from direct sales.

Your Network Works!


3. Avon and Mary Kay Cosmetics are businesses which could be categorized to what type of nonstore retailing?

a) Direct marketingb) Direct sellingc) Online marketingd) Automatic vendinge) Buying services

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4. Amazon.com & Zappos.com as online retail stores fall into what category of non-store retailing?

a) Direct marketingb) Direct sellingc) Network marketingd) Automatic vendinge) Buying services

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Direct Selling

Direct Marketing

Automatic Vending

Buying Service

Nonstore Retailers


Direct Marketing is a nonstore retailing which makes use of telemarketing, television direct-response marketing and electronic shopping.

Online sales are up by about 25% in 2005 in the US as compared to the previous year. More people are becoming more accustomed to shopping on the internet, ordering a variety of goods and services from a wider range of websites.

Just CLICK your ORDERS


4. Amazon.com & Zappos.com as online retail stores fall into what category of non-store retailing?

a) Direct marketingb) Direct sellingc) Online marketingd) Automatic vendinge) Buying services

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5. Which service mix includes general information, parking, restaurants, &repairs in a retailer’s customer offerings?

a) Prepurchase servicesb) Postpurchase servicesc) Customer servicesd) Ancillary servicese) Customized services

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Prepurchase Services

Postpurchase Services

Ancillary Services

Service Mix

Advertising, window display, fitting rooms, fashion shows, trade-ins;

Shipping and delivery, gift wrapping, installations, engraving;

General information, check cashing, parking, restaurants, rest rooms;


What’s Your MIX? DIFFERENTIATE with your

SERVICEAncillary Services is a service mix tool used to differentiate one store from the others by providing additional or supplementary services aside from the main product offering.


5. Which service mix includes general information, parking, restaurants, &repairs in a retailer’s customer offerings?

a) Prepurchase servicesb) Postpurchase servicesc) Customer servicesd) Ancillary servicese) Customized services

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6. The following are true about retail marketing decisions except _________:

a. Retailers’ target market is moving towards niche markets;b. Retailers usually mark up cost of goods by a standard percentage;c. Retailers greatly consider store atmosphere that would match customer motivation; d. Retailers use wide range of communication tools such as ads, special sales, money-saving coupons, to generate traffic and sales;e. Retailers select locations that are accessible to target market.

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Target Market

Product Assortment

Procurement

Prices

Services

Store Atmosphere

Store Activities

Communications

Locations

Retailers’ Marketing Decisions


Keen with the Price Tactics

In terms of pricing, retailers usually pay attention to pricing tactics. They could do storewide sales and markdowns on slower-moving merchandise. They could put low prices on some items to serve as traffic builders or loss leaders or to signal their pricing policies. Some discount stores such as Wal Mart adopts everyday low pricing (EDLP) strategy.

On the other hand, it is the wholesalers who usually mark up cost of goods by a standard percentage.


6. The following are true about retail marketing decisions except _________:

a. Retailers’ target market is moving towards niche markets;b. Retailers usually mark up cost of goods by a standard percentage;c. Retailers greatly consider store atmosphere that would match customer motivation; d. Retailers use wide range of communication tools such as ads, special sales, money-saving coupons, to generate traffic and sales;e. Retailers select locations that are accessible to target market.

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7. Wal Mart as a discount store falls into what pricing group?

a. high-markup, lower-volumeb. low-markup, higher-volumec. high-markup, higher-volumed. low-markup, lower-volumee. none of the above

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Bloomingdale’s Wal Mart

Tiffany Sunglass Hut

Value AddedBre

ad

th o

f P

rod

uct

Lin

e

High Low

Bro

ad

Narr

ow

Retail Positioning Map


All retailers would want high volumes and high gross margins, but the two don’t usually go together. Most retailers fall into the following price group:

High Mark-up, Lower-Volume (Fine Specialty Stores)

Low Mark-up, Higher-Volume (Mass Merchandisers and Discount Stores)

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I want HIGH TURNS x EARNS


a. high-markup, lower-volumeb. low-markup, higher-volumec. high-markup, higher-volumed. low-markup, lower-volumee. none of the above

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7. Wal Mart as a discount store falls into what pricing group?


8. Which of the following is true about private labels?

a. These are unbranded, plainly packaged, less expensive versions of common products.b. Private labels are usually sold at a higher price due to higher costs on advertising, sales promotion and distribution.c. Private labels require much investment on R&D to bring out new brands, line extensions, and features.d. Are also called reseller, store, house or distributor brand developed by retailers and wholesalers.e. all of the above

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PRIVATE LABEL VS. NATIONAL BRANDS

PRIVATE LABEL Developed by

retailers/wholesalers

Shelf space advantage

Lower price

NATIONAL BRANDS Significant

investments on R&D

Investments on “pull” advertising programs


What’s on the LABEL?

Wal Mart, Tesco, and Marks and Spencer are into developing their own store brands. These brands are also known as private labels.

It is offered to customers at a lower price due to lower costs incurred in production, advertising, sales promotion and distribution.

Retailers and wholesalers have huge advantage in terms of shelf space and price.


8. Which of the following is true about private labels?

a. These are unbranded, plainly packaged, less expensive versions of common products.b. Private labels are usually sold at a higher price due to higher costs on advertising, sales promotion and distribution.c. Private labels require much investment on R&D to bring out new brands, line extensions, and features.d. These are also called reseller, store, house or distributor brand developed by retailers or wholesalers.e. all of the above

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9. Which is not a market logistics decision?

a. What optimum number of units to produce?b. How should orders be handled?c. Where should stock be located?d. How much stock should be held?e. How should goods be shipped?

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How should orders be handled?

How should goods be shipped?

Where should stock be located?

How much stock should

be held?

Market Logistics Decisions

ORDER PROCESSING INVENTORY

WAREHOUSING TRANSPORTATION


KEYS TO DIFFERENTIATED DISTRIBUTION

Order Processing - Companies are trying to shorten order-to-payment cycle or the lapsed time between order’s receipt, delivery and payment to satisfy customers.

Warehousing – Stocking locations of finished goods until they are sold to respond to discrepancies production and consumption cycles.

Inventory – decision-making as to when and how much to order. Costs involved are carrying costs and ordering costs.

Transportation – choices would affect product pricing, on-time delivery performance, condition of goods, and customer satisfaction.


9. Which is not a market logistics decision?

a. What optimum number of units to produce?b. How should orders be handled?c. Where should stock be located?d. How much stock should be held?e. How should goods be shipped?

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10. Which statement is not true in determining Optimal Order Quantity?

a. Order-processing cost per unit decreases with number of units orderedb. Inventory-carrying charges per unit decreases with the number of units orderedc. Total cost curve is the sum of ordering costs and inventory costs d. The quantity where the lowest point of the total cost curve is projected is the optimal order quantitye. None of the above

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DETERMINING OPTIMAL ORDER QUANTITY

ORDER QUANTITY

PR

ICE

PER

UN

IT

Total Cost per Unit

Inventory-carrying Cost per unit

Order-processingCost per unit


REDUCING INVENTORY COSTS? KNOW THE OPTIMAL!

Order-processing cost per unit decreases with more number of units ordered because costs are spread over more units.

Inventory-carrying costs per unit increases with more units ordered because each unit remains longer in inventory.

These 2 costs are added to find the total cost curve.

The lowest point in the total curve is the optimal order quantity.


10. Which statement is not true in determining Optimal Order Quantity?

a. Order-processing cost per unit decreases with number of units orderedb. Inventory-carrying charges per unit decreases with the number of units orderedc. Total cost curve is the sum of ordering costs and inventory costs d. The quantity where the lowest point of the total cost curve is projected is the optimal order quantitye. None of the above

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TOP 10 Learning Questions for

Chapter 16: Managing Retailing, Wholesaling and Logistics

Mary Rose R. MendozaSeptember 23, 2010

Marketing Management Class Prof. Remigio Joseph De Ungria

chapter 16 managing retailing, wholesaling and logistics mendoza

Documents

major types of retailer

marketing management

logisticsmary rose

remigio joseph

learning questions forchapter

final consumers

seller of securities

business use