1. BA 590 Module 3 Industry Competition

2. The Competitive Environment Information on Competitors Competitive Barriers Competitive Rivals Competitor Analysis Kinds of Markets Key Concepts in the Competitive Environment 4-6

3. Price Location Product Selection Special Services Helpful Salespeople Fairness in Dealing Key Economic Factors Affecting Consumers’ Retail Choice Retailing 12-3

4. Retailing Economic Needs Price - Value Offered, Credit, Discounts Location - Convenience, Parking, Safety Product Selection - Width and Depth of Assortment, Quality Special Services - Delivery, Wrapping, Special Orders

5. Retailing Economic Needs Helpful Salespeople - Courteous, Knowledgeable, Fast Checkout Fairness in Dealings - Honesty, Return Priviledges

6. Exhibit 12-1 Conven- tional offerings Single- and limited- line stores Expanded assortment and service Specialty shops and department stores Expanded assortment and/or reduced margins/service Supermarkets, discount houses, mass-merchandisers, supercenters Added convenience higher margins less assortment Telephone/mail order, vending machines, door-to-door, convenience stores, electronic shopping Expanded assortment reduced margins more information Internet 12-4 Types of Retailers

7. Retail Formats that Focus on Convenience Convenience (Food) Stores Door-to-Door Selling Telephone and Direct Mail Automatic Vending 12-5 Focusing on Convenience

8. Convenience Convenience Food Stores - Convenience Version of Limited line food stores Vending - Automated Dispensing of Goods Door-to-Door - Direct to Consumer’s Home Telephone and Direct Mail - Allows Customers to Shop at Home and Charge

9. 12-6 More Information Shopping Differences Still in Infancy Competition will bring Change Wide Assortment New Convenience Costs are Deceptive Retailing on the Internet

10. Retail Chains Major Types of Retail Chains Corporate Chains Voluntary Chains Franchise Chains Cooperative Chains 12-7

11. Retail Chains Corporate Chain - Owns and Manages More Than One Store Cooperative Chains - Retail-Soonesred Groups that Have Buying Organizations and Run Joint Promotions Voluntary Chains - Wholesaler Sponsered Groups That work With Independent Retailers Franchise Operation - Franchisor Develops Strategy, Franchises Implement

12. Retailing Change Wheel of Retailing - New Retailers Enter as Low-Cost, Low-Status, Low-Margin, Low Price, then Evolve into Conventional Retailers Scrambled Merchandising - Carrying All Product Lines that Can be Sold Profitably Retailer Life Cycle

13. The New Face of Wholesaling New Strategies Needed to Survive Progress or Fail Producing Profits 12-8

14. Types of Wholesalers Exhibit 12-5 12-9 Does wholesaler own the products? Limited-function merchant Wholesalers Service merchant wholesalers Agent middlemen How many functions does the wholesaler provide? All the functions Some functions Yes (merchant wholesaler)No (agent middleman)

15. Types of Wholesalers Exhibit 12-5 12-9 Does wholesaler own the products? Limited-function merchant Wholesalers Service merchant wholesalers Agent middlemen How many functions does the wholesaler provide? All the functions Some functions Yes (merchant wholesaler)No (agent middleman)

16. Manufacturer or producer Consumer Procter & Gamble Del Monte NissanCitibank Wholesaler Retailer Wholesaler Retailer 10-5 Exhibit 10-2 Four Examples of Basic Channels of Distribution for Consumer Products

17. Strategy Decision Areas in Place Exhibit 10-1 10-3 Type of channel Type of physical distribution facilities needed How to manage channels Middlemen/ facilitators needed Degree of market exposure desired IndirectDirect Place objectives Customer service level desired

18. Place Objectives Product Classes Convenience Impulse Emergency Shopping Specialty Unsought

19. Why a Firm May Want to Use Direct Channels Greater Control Lower Cost Value added subsequent to production process Value added subsequent to production process Direct contact with Customer Needs Direct contact with Customer Needs Quicker Response or Change in Marketing Mix Quicker Response or Change in Marketing Mix Suitable Middlemen Not Available Suitable Middlemen Not Available Some Reasons for Choosing Direct Channels Some Reasons for Choosing Direct Channels 10-4

20. Manufacturer or producer Consumer Procter & Gamble Del Monte NissanCitibank Wholesaler Retailer Wholesaler Retailer 10-5 Exhibit 10-2 Four Examples of Basic Channels of Distribution for Consumer Products

21. Discrepancy and Separation Discrepancy of Quantity Discrepancy of Assortment Regrouping Activities Accumulating Bulk Breaking Sorting Assorting

22. Accumulating Bulk- Breaking Bulk- Breaking Assorting Sorting Regrouping Activities 10-6

23. = number of outlets Intensive Selective Exclusive What Market Exposure Fits the Marketing Objectives 10-9 Market Exposure

24. Distribution Strategies Intensive: All Responsible and Suitable Retailers and Wholesalers Who Will Stock a Product Selective: Only Those Who Will Give a Product Special Attention Exclusive: Only One Middleman in a Given Geographic Area

25. Understanding Physical Distribution Costs ($) Customer Service Level 0 0 90% Transporting Cost Lost Sales Inventory Cost Total Cost of PD

26. Factors that Affect PD Service Levels Advance Product Availability Info Time to Enter and Process Orders Backorder Procedures Order Status Info Reliability in Meeting Delivery Dates Return handling Procedures

27. The Transporting Function Modes of Transportation Water Air Rail Truck Pipeline

28. Transporting Function (p. 256) Rail Good Blend of Cost and Number of Locations Served Water Low Cost, Can Handle almost Anything Truck Gets it Anywhere Quick Air Quickest of All

29. The Storing Function Price Stability Flexibility Costs Specialized Function

30. 3-Minute Distribution Drill Evaluate The Service Level for a Consumer Product or Service, and Offer Two Improvements Example: Starbucks Coffee # 1: Charge Accounts For Frequent Customers # 2: Reserved Seats