Deck 16: Publicity: Promotion Using Earned Media, Owned Media, and Social Media

Question 1

and Nevada and built a 1.4 million-square-foot distribution center capable of supporting an extensive store network. Even though Tesco operated everything from convenience stores to superstores in other countries, it was creating an entirely new retail brand from scratch and investing 2 billion to make it work. As part of its marketing research, the company built a prototype store inside a California warehouse to test potential shopper reaction. Only then did it finalize the retail design and begin opening stores.
However, Fresh and Easy's early results didn't live up to its parent's expectations. With rising unemployment and a deepening recession, consumers were cutting back on spending, even for food and other basics. Competition was another factor. Between supermarkets such as Ralph's and Vons, natural-food grocers like Trader Joe's and Whole Foods, and convenience stores such as 7-Eleven, the competitive environment was extremely challenging. Still, Tesco's management believed in Fresh and Easy's retail positioning and saw long-term profit potential in making its mark in the U.S. market.
One year into its U.S. expansion, Tesco slowed the rate of new-store openings as it fine-tuned Fresh and Easy's positioning. "After customers found the stores a little sterile, we warmed up the look, adding more graphics," says an official. "Family budgets being under pressure, we introduced more promotions and value packs." In addition, the chain installed higher shelving to increase the number of items available on the selling floor.
With these changes in place, Fresh and Easy launched its first-ever ad campaign to reinforce the message of fresh foods at low prices and used public relations to spotlight its support of its local communities and environmentally friendly operations. It connected with consumers through videos on YouTube, photos on Flit, blog posts, and Twitter tweets. The retailer also made a special effort to reach out to Hispanic consumers with a Spanish-language website and Spanish-language advertising. Store by store, it adapted the merchandise mix to include more of the foods and brands favored by Hispanic shoppers in each neighborhood.
Three years after Tesco started Fresh and Easy, its 150 U.S. stores were enjoying higher traffic and higher revenue. The economy was improving, the chain had shifted its new-store schedule into high gear, and customer feedback was positive. Profits, however, remained elusive. Looking ahead, can Fresh and Easy capture the hearts and wallets of enough U.S. shoppers to assure its long-term financial success?"
1. What type of store is Fresh and Easy? Knowing that Fresh and Easy Ells into this Classification of retailers, what does that tell us about Fresh and Easy's marketing efforts?
2. Based on Fresh and Easy's retail positioning and marketing situation, what types of locations should it seek our as it expands its store network?
3. A few grocery retailers offer online shopping for customers' convenience. Should Fresh and Easy offer online shopping? Explain.

Answer 1

(1)
'F and E' are neighbourhood grocery stores. These stores offer products like high-quality fresh fruits and vegetables, fresh meats, prepared meals (store brand), and staples for households at affordable rates.
F and E's should have used fully integrated marketing efforts that may include mobile and online promotions, on road banners, radio, and Television. Moreover, branding initiatives and in-store point-of-sale can also be included.
(2)
'F and E' should seek for locations where it need not battle for customers. It should avoid the locations which are dense with shoppers and similar supermarkets.
F and E is a handy neighborhood market that attracts customers who would arrive several times a week.
(3)
With almost every big store offering online ordering services, F and E should also start the same to provide ease of shopping to its customers. The service should be such in which shoppers are allowed to order their products online and pick up the same from the stores.
Since this service saves the shopping time and helps avoiding crowd, offering online service would be a favourable decision.

Question 2

If you were opening a retail business, would you prefer to open an independent store or own a store under a franchise arrangement? Explain your preference.

Answer 2

Franchising is an arrangement in which people use the name and model of a successful business in exchange for some consideration.
Retail businesses that open under a franchise arrangement are always more successful than independent stores. The owner needs only limited capital and can benefit from the experiences gained by other franchisees.
Most franchises are nationally advertised and ensure customer traffic as soon as the store opens. Moreover, in the case of business-related problems, stores under franchise can obtain advice and guidance at hardly any cost.
Despite certain strict terms of contract, like long working hours, employee uniforms, etc., it is better to own a store under franchise than an individual store, as far as profit motive is concerned.

Question 3

Distribution decisions in the marketing plan entail the movement of your product from the producer until it reaches the final consumer. An understanding of how and where your customer prefers to purchase products is critical to the development of the marketing plan. As you apply the information in this chapter to your plan, focus on the following issues:
If your product will be sold to the ultimate customer, what type of retailing establishment is most suitable to your product? Consider the product's characteristics and your target market's buying behavior. Refer to Table 16.1 for retailer types.

The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Answer 3

If the product is to be sold to the ultimate customer then the most suitable retailing establishment would be supermarket. According to the buying behaviour and products attributes, the retailer category that would suit the product most is departmental store.
These stores are the retail organizations that offer wide variety of products mix. This retail organization would put marketing efforts for the promotion of the product. The internal management under this store also supports the marketing of the product. These departments are very much oriented towards providing services to the customers.
Departmental stores provide variety of services like delivery, credit, merchandise return and personal assistance though pleasant atmosphere.

Question 4

What services do wholesalers provide to producers and retailers?

Question 5

What are the major differences between discount stores and department stores?

Question 6

What is the difference between a full-service merchant wholesaler and a limited-service merchant wholesaler?

Question 7

Walmart
Walmart provides a website where customers can shop for products, search for a nearby store, and even preorder new products. The website lets browsers see what is on sale and view company information. Access Walmart's company website at www.walmart.com.
Compare the atmospherics of Walmart's website to the atmospherics of a traditional Walmart store. Are they consistent? If not, should they be?

Question 8

Drop shippers take title to products but do not accept physical possession of them, whereas commission merchants take physical possession of products but do not accept title. Defend the logic of classifying drop shippers as merchant wholesalers and commission merchants as agents.

Question 9

Visit a retail store you shop in regularly or one in which you would like to shop. Identify the store, and describe its atmospherics. Be specific about both exterior and interior elements, and indicate how the store is being positioned through its use of atmospherics.

Question 10

Why are manufacturers' sales offices and branches classified as wholesalers? Which independent wholesalers are replaced by manufacturers' sales branches? By sales offices?

Question 11

Distribution decisions in the marketing plan entail the movement of your product from the producer until it reaches the final consumer. An understanding of how and where your customer prefers to purchase products is critical to the development of the marketing plan. As you apply the information in this chapter to your plan, focus on the following issues:
Discuss how the characteristics of the retail establishment, such as location and store image, have an impact on the consumer's perception of your product.
The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Question 12

In what ways are traditional specialty stores and off-price retailers similar? How do they differ?

Question 13

Walmart.com
Walmart provides a website where customers can shop for products, search for a nearby store, and even preorder new products. The website lets browsers see what is on sale and view company information. Access Walmart's website at www.walmart.com.
Read the "Walmart Story" on the website. Explain how Walmart has changed its retail positioning over the years.

Question 14

Contact a local retailer you patronize, and ask the store manager to describe the store's relationship with one of its wholesalers. Using your text as a guide, identify the distribution activities performed by the wholesaler. Are any of these activities shared by both the retailer and the wholesaler? How do these activities benefit the retailer? How do they benefit you as a consumer?

Question 15

Distribution decisions in the marketing plan entail the movement of your product from the producer until it reaches the final consumer. An understanding of how and where your customer prefers to purchase products is critical to the development of the marketing plan. As you apply the information in this chapter to your plan, focus on the following issues:
Are direct-marketing or direct-selling methods appropriate for your product and target market?
The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Question 16

Juanita wants to open a small retail store that specializes in high-quality, high-priced children's clothing. What types of competitors should she be concerned about in this competitive retail environment? Why?

Question 17

What major issues should be considered when determining a retail site location?

Question 18

have extended product lines, including a revised design meant to appeal to young consumers and features like custom bike shops with around-the-clock technicians. Highlighting bike offerings is a strategy that is paying off in times when people are searching for cheap means of transportation.
These days, the company is still opening new stores, but it's also moving out of shopping centers as older leases come up for renewal. It now prefers 15,000-square-foot free-standing stores located in lifestyle shopping centers or urban centers, ideally in or near areas where people enjoy outdoor activities. The recession hurt the entire retail industry, and EMS was no exception, so it has been keeping a close eye on expenses as the economy improves. The retailer is also boosting profit margins by stocking more private-branded products. Given EMS's renewed focus on core customers, and its most recent decisions about choosing retail locations, the company is poised to climb even higher in the coming years.
1. What changes occurred at EMS that caused the company to lose its unique retail position?
2. Evaluate the CEO's decision to take the company back to its roots.
3. Why would EMS prefer to open in a lifestyle shopping center rather than a regional shopping center? Do you agree with this retail location decision? Explain your answer.

Question 19

Distribution decisions in the marketing plan entail the movement of your product from the producer until it reaches the final consumer. An understanding of how and where your customer prefers to purchase products is critical to the development of the marketing plan. As you apply the information in this chapter to your plan, focus on the following issues:
If your product will be sold to another member in the marketing channel, discuss whether a merchant wholesaler, agent, or broker is most suitable as your channel customer.
The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Question 20

Distribution decisions in the marketing plan entail the movement of your product from the producer until it reaches the final consumer. An understanding of how and where your customer prefers to purchase products is critical to the development of the marketing plan. As you apply the information in this chapter to your plan, focus on the following issues:
Considering your product's attributes and your target market's (or markets') buying behavior, will your product likely be sold to the ultimate customer or to another member of the marketing channel?
The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.

Question 21

Describe the three major types of traditional shopping centers. Give an example of each type in your area.

Question 22

What value is added to a product by retailers? What value is added by retailers for producers and ultimate consumers?

Question 23

Discuss the major factors that help to determine a retail store's image. How does atmosphere add value to products sold in a store?

Question 24

Walmart
Walmart provides a website where customers can shop for products, search for a nearby store, and even preorder new products. The website lets browsers see what is on sale and view company information. Access Walmart's company website at www.walmart.com.
How does Walmart attempt to position itself on its website?

Question 25

Over the years, GameStop has developed a sophisticated information system for analyzing historic trends in store sales so it can project future demand for current and new products. This is especially important for satisfying the needs of enthusiasts, who may buy elsewhere if GameStop doesn't have the latest game or console in stock immediately after its release. To help predict demand, GameStop invites customers to preorder new items for pickup at their local stores on or after the release date. It also tracks customer requests and monitors media coverage in advance of new product introductions. During a busy period of new-game introductions, GameStop may have more than 1,000 new games in stock and ready for purchase. Because new games and equipment can make older products obsolete, GameStop has negotiated deals with its primary suppliers to allow returns in such instances.
Thanks to its marketing information system, GameStop knows exactly which products sell in each of its stores and what inventory is available in its distribution centers. The system automatically reorders merchandise as it sells and schedules twice-weekly shipments to replenish stock, so store shelves are never empty. On the other hand, daily analysis of inventory positions and frequent restocking allows GameStop to tailor the merchandise mix for each store while avoiding the expense of carrying too much safety stock in each store.
For high efficiency, GameStop supplies replenishment stock to U.S. stores from its 400,000-square-foot distribution center in Grapevine, Texas. Its 260,000-square-foot center in Louisville, Kentucky, is dedicated to receiving, sorting, and shipping hot new games and consoles to its stores nationwide. The company uses centrally located distribution centers to restock stores in other countries.
The Digital Dilemma
Despite GameStop's considerable investment in brick-and-mortar retailing, it sees great value in maintain-ng a strong online retailing presence. Game enthusiasts tend to be heavy Internet users, and GameStop wants to be where they like to be. Its website has a feature of interest to all of the targeted segments: a "wish list" where enthusiasts and casual garners can itemize the products they would most like to receive (from gift-givers). GameStop also offers a weekly e-newsletter with exclusive discounts and advance notice of sales, tournaments, midnight openings for new releases, and other events.
Game consoles are increasingly Internet-ready and many players already play games on their personal computers, so digital game downloads are a must for GameStop. Its commerce site sells downloadable versions of popular episodes of Grand Theft Auto and other games. The site also offers hundreds of free games, some downloadable and some that play in the user's web browser, including GameStop's own free online game, Legends of Zork.
Digital downloads pose a dilemma. GameStop's executives have been monitoring the situation in the music industry, where downloads have cut into retailer? sales of actual CDs. However, digital music files are relatively small, compared with digital game files. This means buyers would have to have a very speedy broad-band Internet connection to get a game downloaded in a reasonable length of time. For now, GameStop is concentrating on retailing disc-based games through store and online retailing. "We simply don't believe there's enough capacity and speed to create a full download game business in the short term," says the chief operating officer."
1. What role does physical distribution play in GameStop's retailing strategy?
2. Why would video game marketers such as Sony prefer dual distribution? What does this mean for GameStop's marketing efforts?
3. How does GameStop create time, place, possession, and form utility for customers who want to buy used video games?
4. Do you think GameStop should market used video games via vending machines placed on college campuses? Why or why not?

Question 26

Location of retail outlets is an issue in strategic planning. What initial steps would you recommend to Juanita (see Application Question 1) when she considers a location for her store?

Question 27

How is door-to-door selling a form of retailing? Some consumers believe that direct-response orders bypass the retailer. Is this true?