Unit-1

 Consumer is in charge.  Providing value to customers has become a challenge for retailers.  Consumers now have a wider choice of Merchandise available..  Access to a large amount of information.  Buying decision..  Customers wants ‘value ‘ in terms of not only price, appearance, quality, and information but also selection, convenience, service, and entertainment.

 Difficult to attract enough footfall.  Customer loyalty...  Value chain..  Technology makes the retailers interact…directly.  Technology is being considered as an important tool in building and maintaining relationships.  It is being used to learn about the needs, preferences, shopping habits of individual consumers..

1. In-store technologies 2. On-line technologies these technologies are used information display Identification, checkouts, point-of-sale(POS) Signage, RIFD(Radio Frequency identification)tags and hand-held shopping assistance and Body scanning, especially for physical stores.

 Communication is an integral part of the retailers marketing strategy.primarily, communication is used to inform the customers about the retailer, the merchandise and services. Today consumers can communicate or reach the Organisations. ex.. Toll free no.’s The most common tools are: 1.Advertising 2.Sales promotion 3.Public relations 4.Personal selling 5.Direct marketing

sales promo tion Retail comm unicati on mix Public relatio ns Advert ising Direct market ing Person al selling

A customer is first exposed to a good or service through a non-personal medium such is direct Mail, TV, radio, magazine, newspaper, or computer and then orders by mail. Phone, or fax and increasingly by computer. Popular products are gift items, apparel, magazines, books, and music, sports equipment, home accessories, food, and insurance.

Direct marketers can be divided into two broad categories: General and Specialty. General direct marketing firms offer a full line of products and sell … Specialty direct marketers focus on more narrow product lines…

Direct marketing has a number of strategic business advantages:  Many costs are reduced-low start up costs are possible.  Inventories are reduced  No displays are needed  A prime location is unnecessary  Regularly staffed store hours are not important  It is possible for direct marketers to have lower prices  A huge geographic area can be covered inexpensively and efficiently.

 Pinpointed trough targeted mailings..  Tax…  Avoiding of adding outlets…(N&G) Direct marketing also has its limits..  Products cannot be examined before purchase  The range of items purchased is more limited than in stores.  Catalogs can be expensive  A computer system is required to track shipments, monitor purchases and returns, and keep mailings current.  24 hour…  Delivery delays…

 Direct marketing is a form of retailing in which a consumer is exposed to a good or service through a non-personal medium and then orders by mail, phone, fax, or computer.  It may also be viewed as “an interactive system that uses one more advertising media to effect a measurable response and /or transaction at any location, with this activity stored on a database”.

We do include these as Forms of direct marketing… Any catalog, any mail, TV, radio, magazine, newspaper, phone directory, fax, or other ad; any computer-based transaction; or any other non personal contact that stimulates customers to place orders by mail, phone, fax, or Co We do not include these as Forms of direct marketing: Direct marketing, conventional vending machines where by consumers are exposed to non personal media but do not complete transactions via mail, fax, phone, or computer; they do not interact with the firm in a manner that allows a database to be generated and kept.

The role of marketing is to influence or direct activities from the manufacturer to the patient: The right products In the right quantity At the right place For the right price At the right time

 Retailing strategy that is not store- based  It exceeds $300 billion annually  78% comes from direct marketing  Web-based retailing is fastest growing area

 Nontraditional retailing also includes formats that do not fit into the store and non-store based categories:  Video kiosks  Airport retailing

 Customer is first exposed to a good or service through a nonpersonal medium and then orders by mail, phone, fax, or computer  Annual U.S. sales exceed $235 billion  Other leading countries include * Japan * Germany * Great Britain * France * Italy

 Married  Upper middle class  years old  Desires convenience, unique merchandise, good prices

GENERAL  offer full lines of products from clothing to housewares ◦ J.C. Penney ◦ QVC SPECIALTY  offer narrow product lines ◦ L.L. Bean ◦ Franklin Mint

 Collection, storage, and usage of relevant customer information * name * address * background * shopping interests * purchase behavior  Observation of rule

Several trends are relevant for direct marketing:  The evolving activities of direct marketers.  Changing consumer lifestyles  Increased competition  The greater use of dual distribution channels  The newer roles for catalogs and TV  Technological advances  The interest in global direct marketing.  Increasing usage of dual distribution channels  Changing media roles, technological advances, and global penetration

 Company reputation and image  Ability to shop whenever consumer wants  Types of goods and services  Availability of toll-free phone number or Web site for ordering  Credit card acceptance  Speed of promised delivery time  Competitive prices  Satisfaction with past purchases and good return policy

 Printed catalogs  Direct-mail ads and brochures  Inserts with monthly credit card and other bills (statement stuffers)  Freestanding displays  Ads or programs in mass media  Banner ads or hot links on the Web  Video kiosks

 Overall Response Rate  Average Purchase Amount  Sales Volume by Product Category  Value of list brokers

 Project a retail presence  Enhance image  Generate sales  Reach geographically-dispersed customers  Provide information to customers  Promote new products  Demonstrate new product benefits

 Provide customer service (e.g., )  Be more “personal” with consumers  Conduct a retail business efficiently  Obtain customer feedback  Promote special offers  Describe employment opportunities  Present information to potential investors, franchisees, and the media

1. Brochure Web Site 2. Commerce Web Site 3. Integrated Web Site 4. The ‘Webified’ Store 5. Site Integrated with Manufacturer Systems

 Using the Web ◦ information ◦ entertainment ◦ interactive communications  Shopping Online ◦ selection ◦ prices ◦ convenience ◦ fun

Trust Fear Lack of security Lack of personal communication

 Develop or exploit a well-known, trustworthy retailer name  Tailor the product assortment for Web shoppers  Enable the shopper to click as little as possible  Provide a solid search engine  Use customer information

 Large group of prospective shoppers  Captive audience  Strong sales per square foot of retail space  Strong sales of gift and travel items  Difficulty in replenishment  Longer operating hours  Duty-free shopping possible