CLEP Principles of Marketing Study Notes

Nonstore retailing selling of goods or services

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Nonstore retailing - selling of goods or services outside the confines of traditional store settings, and include telemarketing, automatic vending , mail-order retailing, in-home retailing, etc. Accounts for approximately 20 percent of retail sales. Telemarketing - direct selling of goods by telephone, in-home retailing is where a salesman sells products to consumers in their homes (examples are Amway and Mary Kay cosmetics) . When choosing a retail store location , a firm takes into account location of competitors, the location of the target market, site costs, etc. Store location is important because location dictates the geographic trading area from which a store will draw its customers . The location needs to be profitable, which means factors such as site cost, accessibility to potential customers, location of competitors, etc. must be taken into account. Scrambled merchandising - When retailers add unrelated products and product lines to an existing product mix. Normally involves adding items which sell quickly, increase profitability, and increase store traffic . An example is a convenience store adding lawn fertilizer to its product mix. Wheel of Retailing - theory describing the evolution and development of new types of retail stores. New retailers often enter the marketplace with low prices, margins, and status. The successful ones tend to become more elaborate and expensive as time passes. Eventually, they emerge at the high end of the price/cost/service scales, and new retailers enter in at the low end, in an endless cycle. Wheel of Retailing explains how retail stores
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evolve and new types of retail businesses come into being. Explains origin and evolution of new types of retail stores. According to this Wheel, in an endless cycle, new, cheap retailers enter the market, grow into big and expensive operations, making room for the next generation of new, cheap retailers. PART VI Promotion Plan requires identifying a Promotion Mix, Promotion Objectives, and a Promotion Budget. 3 Elements make up the total Promotion Plan: 1. Promotion Mix is made up of those specific ingredients a company combines to promote a product. The ingredients a company combines to inform and persuade people to purchase its products. Combination of one or more of four ingredients: advertising , personal selling, publicity, and sales promotion. 2. Promotion Objectives can fall into one of three main categories. For new products, the objective is to inform , or let intermediaries and end-users known about new products. For products which are already established , promotion can either be used to persuade, or remind buyers. 3 types of objectives : 1. to inform - Companies use promotion to inform customers about new products 2. to persuade - for existing products they try to persuade them to use the product 3.
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