Industry Competition.ppt
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Transcript Industry Competition.ppt
BA 590
Module 3
Industry
Competition
The Competitive Environment
Kinds of Markets
Competitor Analysis
Key
Concepts
in the
Competitive
Environment
Competitive Rivals
Competitive Barriers
Information on Competitors
4-6
Retailing
Price
Location
Key
Economic
Factors
Affecting
Consumers’
Retail Choice
Product Selection
Special Services
Helpful Salespeople
Fairness in Dealing
12-3
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
Retailing Economic Needs
• Helpful Salespeople Courteous, Knowledgeable,
Fast Checkout
• Fairness in Dealings - Honesty,
Return Priviledges
Types of Retailers
Conventional
offerings
Exhibit 12-1
12-4
Singleand
limitedline
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
Focusing on Convenience
Convenience
(Food) Stores
Retail Formats
that Focus on
Convenience
Automatic
Vending
Door-to-Door
Selling
Telephone and
Direct Mail
12-5
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
Retailing on the Internet
Still in
Infancy
Competition
will bring
Change
Wide
Assortment
Costs are
Deceptive
New
Convenience
Shopping
Differences
12-6
More
Information
Retail Chains
Corporate
Chains
Major Types
of Retail
Chains
Cooperative
Chains
Voluntary
Chains
Franchise
Chains
12-7
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
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
The New Face of Wholesaling
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12-8
Producing Profits
Progress or Fail
New Strategies
Needed to Survive
Types of Wholesalers
Does wholesaler own
the products?
Yes (merchant wholesaler)
No (agent middleman)
How many functions
does the wholesaler
provide?
Some
functions
All the functions
Service
merchant
wholesalers
Exhibit 12-5
12-9
Limited-function
merchant
Wholesalers
Agent middlemen
Types of Wholesalers
Does wholesaler own
the products?
Yes (merchant wholesaler)
No (agent middleman)
How many functions
does the wholesaler
provide?
Some
functions
All the functions
Service
merchant
wholesalers
Exhibit 12-5
12-9
Limited-function
merchant
Wholesalers
Agent middlemen
Four Examples of Basic Channels of
Distribution for Consumer Products
Manufacturer or producer
Citibank
Del
Monte
Procter &
Gamble
Wholesaler
Wholesaler
Nissan
Wholesaler
Retailer
Consumer
Exhibit 10-2
10-5
Retailer
Retailer
Strategy Decision Areas in Place
Place objectives
Customer
service
level desired
Type of
channel
Direct
Degree of market
exposure desired
Exhibit 10-1
10-3
Indirect
Type of
physical distribution
facilities needed
Middlemen/
facilitators needed
How to manage
channels
Place Objectives
• Product Classes
• Convenience
• Impulse
• Emergency
• Shopping
• Specialty
• Unsought
Why a Firm May Want to Use Direct Channels
Greater Control
Lower Cost
Value added subsequent to
production process
Direct contact with
Customer Needs
Some
Reasons
for Choosing
Direct Channels
10-4
Quicker Response or
Change in Marketing Mix
Suitable Middlemen Not
Available
Four Examples of Basic Channels of
Distribution for Consumer Products
Manufacturer or producer
Citibank
Del
Monte
Procter &
Gamble
Wholesaler
Wholesaler
Nissan
Wholesaler
Retailer
Consumer
Exhibit 10-2
10-5
Retailer
Retailer
Discrepancy and Separation
• Discrepancy of Quantity
• Discrepancy of Assortment
• Regrouping Activities
•
•
•
•
Accumulating
Bulk Breaking
Sorting
Assorting
Regrouping Activities
Accumulating
Sorting
10-6
BulkBreaking
Assorting
Market Exposure
Intensive
What Market
Exposure
Fits the
Marketing
Objectives
Exclusive
10-9
Selective
= number of
outlets
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
Understanding Physical Distribution
Total Cost
of PD
Costs ($)
Inventory
Cost
Lost Sales
Transporting
Cost
0
0
90%
Customer Service Level
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
The Transporting Function
Truck
Rail
Modes
of
Transportation
Air
Pipeline
Water
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
The Storing Function
Price Stability
Flexibility
Costs
Specialized Function
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