BA 590

1
BA 590

• Module 3
• Industry Competition

2
The Competitive Environment
Kinds of Markets
Competitor Analysis
Key Concepts in the Competitive Environment
Competitive Rivals
Competitive Barriers
Information on Competitors
4-6
3
Retailing
Key Economic Factors Affecting Consumers Retail
Choice
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
Types of Retailers
Exhibit 12-1
12-4
7
Focusing on Convenience
12-5
8
Convenience

• Convenience Food Stores - Convenience Version of
  Limited line food stores
• Vending - Automated Dispensing of Goods
• Door-to-Door - Direct to Consumers Home
• Telephone and Direct Mail - Allows Customers to
  Shop at Home and Charge

9
Retailing on the Internet
12-6
10
Retail 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
12-8
14
Types of Wholesalers
Exhibit 12-5
12-9
15
Types of Wholesalers
Exhibit 12-5
12-9
16
Four Examples of Basic Channels of Distribution
for Consumer Products
Exhibit 10-2
10-5
17
Strategy Decision Areas in Place
Exhibit 10-1
10-3
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
Some Reasons for Choosing Direct Channels
Value added subsequent to production process
Direct contact with Customer Needs
Quicker Response or Change in Marketing Mix
Suitable Middlemen Not Available
10-4
20
Four Examples of Basic Channels of Distribution
for Consumer Products
Exhibit 10-2
10-5
21
Discrepancy and Separation

• Discrepancy of Quantity
• Discrepancy of Assortment
• Regrouping Activities
• Accumulating
• Bulk Breaking
• Sorting
• Assorting

22
Regrouping Activities
10-6
23
Market Exposure
What Market Exposure Fits the Marketing Objectives
number of outlets
10-9
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
Total Cost of PD
Inventory Cost
Lost Sales
Costs ()
Transporting Cost
0
0
90
Customer Service Level
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
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
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