Product Availability.pptx availability of product in the market plays a vital role in services marketing

marketing

1. Product Availability The number of units of backup stock , also called buffer or safety stock , in the model stock plan determines product availability. Product availability is defined as the percentage of the demand for a particular SKU that is satisfied.

2. Example Retailers often classify merchandise categories or individual SKUs as A, B, or C items, reflecting the product availability the retailer wants to offer. The A items are best-sellers bought by many customers.

3. For example White paint is an A item for Sherwin Williams, and copy paper is an A item for Office Depot. A retailer rarely wants to risk A-item stockouts because running out of these very popular SKUs would diminish the retailer’s brand image and customer loyalty. On the other hand, lower product availability is acceptable for C items, which are purchased by a small number of customers and are not readily available from other retailers.

4. Automated Continuous Replenishment Once the buyer sets the desired product availability and de termines the variation in demand and the vendor’s lead time and fill rate, the continuous replenishment systems for staple SKUs can op erate automatically.

5. Inventory Management Report The inventory management report pro vides information about the inventory management for a staple category. The re port indicates the decision variables set by the buyer, such as product availability, the backup stock needed to provide the product availability, the order points and quantities plus performance measures such as planned and actual inventory turn over, the current sales rate or velocity, sales forecasts, inventory availability, and the amount on order.

6. ALLOCATING MERCHANDISE TO STORES Allocating merchandise to stores involves three decisions: (1) how much merchandise to allocate to each store, (2) what type of merchandise to allocate, and (3) when to allocate the merchandise to different stores.

7. ANALYZING MERCHANDISE MANAGEMENT PERFORMANCE A sell-through analysis compares actual and planned sales to determine whether more merchandise is needed to satisfy demand or whether price reductions (mark downs) are required.

8. SETTING RETAIL PRICES Setting Prices Based on Costs Retail price = Cost of merchandise + Markup

9. Coupons Coupons offer a discount on the price of specific items when they’re purchased. Coupons are issued by manufacturers and retailers in news papers, on products, on the shelf, at the cash register, over the Internet and mobile devices, and through the mail.

10. Retailers use coupons because they are thought to induce customers to try products for the first time, convert first-time users to regular users, encourage large purchases, increase usage, instill loyalty, and protect market share against the competition.

11. Price Bundling Price bundling is the practice of offering two or more different products or services for sale at one price.

12. Example McDonald’s offers a bundle of a sandwich, French fries, and a soft drink in a Value Meal at a discount compared with buying the items individually.

13. Retail communication MIX

14. Integrated marketing communication program Integrate a variety of communication elements to deliver a comprehensive, consistent message to all customers over time, across all elements of their retail mix and across all delivery channels.

15. For example Chili’s Grill and Bar Restaurants uses traditional media—television, radio, and billboards.

16. Example But its customers can also go to Chilis.com to find restaurant locations and place an order. It also communicates with its customers on Facebook and Twitter, but believes its most effective Internet-based communication tool is through the Chili’s opt-in e-mail list.

17. For any communications campaign to succeed, the retailer must deliver the right message to the right audience through the right media at the right time, with the ultimate goal of profiting from long-term customer relationships, as well as short term sales.

18. Elements of Integrated Marketing Communication

19. Mass Media Advertising Newspapers Magazines Direct Mail Television Radio

20. Sales Promotions Sales promotions are special incentives or excitement-building programs that encourage consumers to purchase a particular product or service.

21. Coupons Rebates Premiums - A premium offers an item for free or at a bargain price to reward some type of behavior, such as buying

22. In-Store Marketing/Design Elements Point-of-Purchase Displays Samples Special Events

23. Personal Selling Personal selling is a communication process in which sales associates help customers satisfy their needs through face-to-face exchanges of information.

24. Public Relations Public relations (PR) involves managing communications and relationships to achieve various objectives, such as building and maintaining a positive image of the retailer, handling or heading off unfavorable stories or events, and maintaining positive relationships with the media.

25. Online Media Websites E-mail Mobile Communications Social Media YouTube Facebook Blogs