Final HWRetail

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Final HWRetail
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   Retail stores can be broadly classified into two categories, store based retailers and non-store  based retailers. Inside the Non-store channel are Direct selling, Internet channel, Catalog channel, Television home shopping, Automated retailing. I.   Classification and Definition: 1.   Direct Selling:   Direct selling is a retail channel for the distribution of goods and services. There is no fixed retail location. In direct selling there is a direct contact of the retailer with his ultimate customers. It has three types:    One-to-one selling: A salesperson visits & tries to sell products to a single potential user. For example:Avon, Electrolux.    One-to-many: A salesperson goes to the house of a host who has some people in the house like Tupperware.    Multilevel: A variant of direct selling in which companies recruit independent business  people who act as distributors for their products. These distributors inturn recruit & sell  to sub-distributors, who eventually recruit others to sell their products, usually in customer homes like Amway 2.   Online Retailing: When a firm uses its website to offer products for sale and then individuals or organizations use their computers to make purchases from this company, the parties have engaged in electronic transactions (also called online selling or internet marketing). Internet retailing , also called online retailing, electronic retailing, and   e-tailing,   is a retail channel in which the offering of products and services for sale is communicated to customers over the Internet. Online retailing is being carried out only by a rapidly increasing number of new firms, such as Busy.com, Pets Mart and CD Now.com. 3.   Catalog Channel: Catalog channel is an old fashioned retail channel in which customers can order items via telephone or regular mail. This is a way for the retailer to reach a large group of customers. Catalog marketing is a sales technique used by businesses to group many items together in a  printed piece or an online store, hoping to sell at least one item to the recipient. Consumers buy directly from the catalog sender by phone, return envelope or online using the information in the catalog. Some catalog marketers act as intermediaries between consumers and manufacturers, while businesses with more than a few items create their own catalogs. a.   Print Catalogs: A print catalog usually consists of a cover that announces what type of items the piece contains, followed by the items. Some catalogs feature a single product category, such as clothing, while others include a diverse collection of goods. The catalogs contain photos and descriptions of the items, as well as prices and ordering information. Some come with order forms and return envelopes with prepaid postage. Others require shoppers to order by phone. Some print catalogs are included with items shipped to online buyers to generate additional sales. Catalogs are convenient to use and do not require access to Internet and hence allow for a more flexible shopping.  b.   Online Catalogs :   To save on the cost of printing and mailing and to allow retailers to update prices, products and  promotions more quickly, some business put their products in an online catalog. The products are  grouped and displayed in a similar fashion to a print catalog, but consumers can sort items by  price, category, manufacturer or other criteria. These catalogs allow shoppers to purchase immediately, using a virtual shopping cart and an electronic payment method. 4.   Television home shopping: Television home shopping   is a retail channel in which customers watch a television program that demonstrates merchandise and then place orders for that merchandise, usually by telephone, via the Internet, or via the TV remote.   The three forms of TV home shopping retailing are (1) cable channels dedicated to television shopping, (2) infomercials, and (3) direct-response advertising.    Infomercials   are programs, typically 30 to 60 minutes long, that mix entertainment with product demonstrations and then solicit orders placed by telephone. Because their length,   infomercials do not get lost as easily as 30s commercials can, and they permit marketers to present their products in more details.      Direct-response advertising   consists of one- to two-minute advertisements on television and radio that describe products and provide an opportunity for consumers to order them. Home shopping channels such as Quality Value Convenience (QCV), Home Shopping Network (HSN),and ShopNBC, represent another type of television direct marketing. Broadcasting around the clock, these channels offer consumers a variety of products, including jewelry,clothing,skin-care products, home furnishings, computers,so on.In essence, home shopping channels function as on  –  air catalogs.The channels also have websites that consumers can browse through to make  purchases.In both cases,customers can place orders via toll-free telephone numbers. 5.   Automated Retail: The sale of products through a machine with no personal contact between buyer and seller is called automatic vending. The appeal of automatic vending is convenient purchase. This is a form of non store retailing in which the products are stored in a machine and dispensed to the customers when they deposit cash. Vending machines are placed at convenient and busy locations like air ports, shopping malls, working place.  Automatic vending is a unique area in non-store merchandising because the variety of merchandise offered through automatic vending machines continues to grow. Initially, impulse goods with high convenience value such as cigarettes, soft drinks, candy, newspapers, and hot  beverages were offered. However, a wide array of products such as hosiery, cosmetics, food snacks, postage stamps, paperback books, record albums, camera film, and even fishing worms are becoming available through machines. II.   Benefits and limitations of customers and retailers : 1.   From the customer’s perspective:  A.   Non-store based retailers:   Benefits Limitations Direct Selling Consumers have the opportunity to buy at home or at another convenient: •  Opportunity to try and test the  products. •  Tailored made demonstration and consultation in a friendly environment. •  Personalized delivery at home. •  Right to withdraw the purchase within a given period (additional protection). •  Direct contact with the seller. •  Guaranteed and after sales service. •  Flexible sale hours. •  The cost to hire sale representatives is very high. Sales representatives  must also be trained in classrooms and on the job before they can even call on customers. These training programs often last several weeks, which can get expensive. • Customers are not available at the time of the sales call.  •  A time consuming process to introduce the features and benefits of  products to customers. Online Retailing •  Digital channel decreases the searching costs by providing customers with extensive information about products, recommendations and review as well as •  Network limitations: Graphic and multimedia attributes   price comparisons. •  Digital channel give consumers the chance to save time during the purchase  process. •  Online shopping also allows customers to think and reflect about their purchases in the comfort of their own homes. assume that the customer end has access to a high specification PC. Customers are frustrated when they experience slow data transfer. • Bad publicity: If a customer is unhappy with their service or  products, then they may express   their frustrations and reference their website in their review. This could be  potentially damaging, hurting both their reputation and their search engine ranking. •Reliability: The information on their website might be unreliable if not updated on a regular basis. You need to ensure that changes are made when necessary and have a disclaimer with regards to the reliability of the information contained within. Catalog Channel • This method can display photos of  prints and patterns in different ways and give the customers a different experience than a website. •  Catalog channel strengthen the security for customers to review the merchandise and place orders from a safe environment  —  their home compared to malls and shopping areas •  Catalogs are easier to browse through than websites. Consumers can refer the information in catalog anytime by simply  picking it up from the coffee table. • The information in a catalog is easily •  Some items might be more expensive on a catalog than on high street. •  Possible downsides include that customers may be required to give their contact information when an order is placed, take the time to fill out order forms, and wait a period of time for their order to be available for  purchase.
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