Marketing 3000 Final

EDI
electronic data interchange

The computer-to-computer exchange of business documents from a retailer to a vendor and back.

EDI enables channel members to communicate more quickly and with fewer errors than in the past. This enables merchandise to move from vendors to retailers more quickly.

Vendor-managed inventory
a supply chain system
VMI
vendor-managed inventory

An approach for improving supply chain efficiency in which the manufacturer is responsible for maintaining the retailer’s inventory levels in each of its stores.

Push marketing strategy
merchandise is allocated to stores based on previous sales forecasts. Once a forecast is developed, specified quantities of merchandise are shipped (pushed) to distribution centers and stores at predetermined time intervals.

Push strategies are efficient for merchandise that has steady, predictable demand, such as milk and eggs, basic men’s underwear, and bath towels.

These campaigns attempt to motivate the seller to highlight the product, rather than those of competitors, and thereby push the product to consumers.

Pull marketing strategy
the amount of merchandise sent to the store is determined based on sales data captured by POS terminals.

In essence, customers pull the product into the marketing channel by demanding it. Marketers create customer pull-based demand by designing integrative marketing campaigns to create awareness and ultimately demand for the product.

less likelihood of being overstocked or out of stock because the store orders merchandise as needed on the basis of consumer demand.

result, a pull strategy increases inventory turnover and is more responsive to changes in customer demand.

More costly than push marketing

For some merchandise, retailers do not have the flexibility to adjust inventory levels on the basis of demand
ex: fashion and private-label apparel.

Most channel partners use a combination of these approaches

Distribution center advantages
More accurate sales forecasts are possible when retailers combine forecasts for many stores serviced by one distribution center rather than doing a forecast for each store.

Distribution centers enable the retailer to carry less merchandise in the individual stores, which results in lower inventory investments system wide

Easier to avoid running out of stock or having too much stock in any particular store because merchandise is ordered from the distribution center as needed.

Retail store space is typically much more expensive than
space at a distribution center, and distribution centers are
better equipped than stores to prepare merchandise for sale.

Distribution center disadvantages
If many outlets are concentrated in metropolitan areas, merchandise can be consolidated and delivered by the vendor directly to all the stores in one area economically.

Direct store delivery gets merchandise to the stores faster and thus is used for perishable goods (meat and produce), items that help create the retailer’s image of being the first to sell the latest product (e.g., video games), or fads.

Some manufacturers provide direct store delivery for retailers to ensure that their products are on the store’s shelves, properly displayed, and fresh.

Distribution Center
Coordinating inbound transportation; receiving, checking, storing, and cross-docking; getting merchandise floor ready; and coordinating outbound transportation.
Planners
Employees responsible for the financial planning and analysis of merchandise and its allocation to stores.
(RFID) tag
Radio frequency identification (RFID) tags are tiny computer chips that automatically transmit to a special scanner all the information about a container’s contents or individual products.
Cross-docked merchandise
Pick ticket
A document or display on a screen in a forklift truck indicating how much of each item to get from specific storage areas
Just-in-time inventory systems
Also known as quick response (QR) systems
in retailing

Inventory management systems that deliver less merchandise on a more frequent basis than traditional inventory systems.

Service
Any intangible offering that involves a deed, performance, or effort that cannot be physically possessed; intangible customer benefits that are produced by people or machines and cannot be separated from the producer.

Services account for 76 percent of the U.S. gross
domestic product (GDP)

Customer service
Human or mechanical activities firms undertake to help satisfy their customers’ needs and wants.
Dependence and the growth of service-oriented economies in developed countries have emerged for several reasons.
It is generally less expensive for firms to manufacture their products in less developed countries.

People place a high value on convenience and leisure.
ex: house cleaning service

As the world has become more complicated, people
are demanding more specialized services

Four fundamental differences involved in services
Services are intangible, inseparable, heterogeneous, and perishable.
Inseparable
Unlike a pair of jeans that may have been made six months prior to their purchase, halfway around the world, services are produced and consumed at the same time; that is, service and consumption are inseparable.

Because the service is inseparable from its consumption, customers rarely have the opportunity to try the service before they purchase it.

Heterogeneity
Variability in a service’s quality
Perishable
Services are perishable in that they cannot be stored for use in the future.
ex: cant stockpile golds gym membership
Service gap
Results when a service fails to meet the expectations that customers have about how it should be delivered.

Knowledge gap
Standards gap
Delivery gap
Communication gap

Knowledge gap
Reflects the difference between customers’ expectations and the firm’s perception of those customer expectations.

Firms can close this gap by determining what customers really want by doing research using marketing metrics

Standards gap
Pertains to the difference between the
firm’s perceptions of customers’ expectations and the service standards it sets.

By setting appropriate service standards, training employees to meet and exceed those
standards, and measuring service performance, firms can attempt to close this gap.

Communication gap
Refers to the difference between the actual service provided to customers and the service that the firm’s promotion program promises.

If firms are more realistic about the services they can provide and at the same time manage customer expectations effectively, they generally can close this gap.

Service quality
Customers’ perceptions of how well a service meets or exceeds their expectations.
Building blocks of service quality
Reliability: The ability to perform the service dependably and accurately.

Responsiveness: The willingness to help customers and provide prompt service.

Assurance: The knowledge of and courtesy by employees and their ability to convey trust and confidence.

Empathy: The caring, individualized attention provided
to customers.

Tangibles: The appearance of physical facilities, equipment, personnel, and communication materials.

(VOC) program
voice-of-customer

An ongoing marketing research system that collects customer inputs and integrates them into managerial decisions.

managers and coworkers should provide emotional
support to service providers by demonstrating a concern for
their well-being and standing behind their decisions.