Marketing bán hàng - Chapter 14: Buying merchandise

Chapter 14Buying MerchandiseMerchandise Management BuyingSystems PlanningMerchandiseAssortments BuyingMerchandisePricing RetailCommunicationMix2Merchandise Branding StrategiesManufacturer (National) BrandsDesigned, produced, and marketed by a vendor and sold by many retailersPrivate-Label (Store) BrandsDeveloped by retailer and only sold in retailer’s outletsLicensed BrandDeveloped by licensee and right sold to either manufacturer or retailerThe McGraw-Hill Companies, Inc./Jill Braaten, photographer3Spectrum of National vs. Private LabelThe GapLimitedMarks & SpencerIKEAWal-MartHome Depot% StoreBrands National BrandsMacy’sTarget4Value of Retail Brands5Relative Advantages of Manufacturer versus Private Brands Type of VendorImpact on Store Manufacturer Private-Label Brands BrandsStore loyalty ? +Store image + +Traffic flow + +Selling and promotional + -expensesRestrictions - +Differential advantages - +Margins ? ? 6Private LabelsAdvantagesUnique merchandise not available at competitive outletsDifficult for customers to compare price with competitorsHigher marginsDisadvantagesNeed to develop expertise in developing and promoting brandUnable to sell excess merchandiseTypically less desirable for customers7Manufacturer (National) LabelsAdvantagesMore desired by customersResell excessive merchandiseDon’t need skills and people to develop and promote merchandiseDisadvantagesLower marginsVulnerable to competitive pressuresLimit retailer’s flexibility8Buying from Vendors of National BrandsHelps retailers build their imageHelps build traffic flowReduces selling and promotional expensesThe McGraw-Hill Companies, Inc./Lars Niki, photographer9Most Recognized Apparel and Accessory Manufacturer Brands10Most Recognized Apparel and Accessory Private Label Brands11Examples of Private-Label Brands12Examples of Private-Label Brands13Examples of Private-Label Brands14Examples of Private-Label Brands15Going to Market for National BrandsWholesale Market CentersNational Markets (new York), Regional Markets (Atlanta, Miami)Trade ShowsFrankfurt Book Fair, Las Vegas Consumer Electronics, Atlanta Sporting GoodsInternet ExchangesWorldwide Retail ExchangeMeeting Vendors at Your CompanyDiverters, Closeout Specialists, Liquidators, Other Retailers (Gray Markets, Diversion) 16What do Buyers do at Market?Meet with vendorsDiscuss performance of vendor’s merchandise during the previous seasonReview the vendor’s offering for the coming seasonMay place orders for the coming seasonSometimes they do not buy at market, but review merchandise, return to their offices to discuss with the buying team before negotiating with vendors17Negotiating with Vendors Two-way communication designed to reach an agreement when two parties have both shared and conflicting interests.Royalty-Free/CORBIS18Planning NegotiationsConsider prior historyAssess current situation General market conditionsVendor’s positionPower of vendor Set goalsBe aware of vendor’s goal’sNumber of people involvedSelect an advantageous placeBe aware of deadlines 19Issues to NegotiationPrice and gross marginAdditional markup opportunitiesPurchase termsDelivery times and exclusivityAdvertising allowancesTransportationSteve Cole/Getty Images20Types of NegotiationsBuyerVendorWin LoseWinLoseTypes of Negotiations21Win - Lose NegotiationCan be good in the short run and bad in the long-runShort-term solution-- person you are negotiating with can’t lose all the timeMight degenerate into LOSE - LOSE22Lose - Lose NegotiationWastes time and energyNo relationships establishedObjectives not met23Win - Win NegotiationCollaborationEnhances vendor trustLong-term relationshipDoesn’t mean “giving-in”CooperationRoyalty-Free/CORBIS24Guidelines for NegotiationsSeparate people from problemInsist on objective criteria to evaluate performanceInvent options for mutual gainLet the other party do the talkingKnow how far to go25Negotiating TipsBe aware of timeLocation -- comfortableKeep negotiating participants evenBe patientLet him/her mention a figureDon’t be afraid to say “no”26Negotiating TipsDon’t over negotiate Don’t assumeVisualize the negotiationTiming is everythingAlways leave the door openMaintain self-esteem27Negotiation SUMMARYPlanning is criticalKnowledge is powerA person will only do what is right for him/her(c) Brand X Pictures/PunchStock28Functions Provided by Internet ExchangesProduct DirectoriesUse of Reverse AuctionsCollaboration in Planning – CPRF SoftwareGeneral Information about Trends29Online Reverse AuctionsWhy reverse?Vendors bid for buyer’s businessPrice fallsOne buyer, multiple vendors30BSSSReverse AuctionSBBBTraditional AuctionReverse Auctions31Reverse Auction ProcessDevelop specificationSelect potential sources and invite them to auctionBidding for several hoursSelect supplier32Price Path on Open-Bid Auction33Strategic (Partnering) Relationships Retailer and vendor committed to maintaining relationships over the long-term and investing in mutually beneficial opportunitiesPhotoLink/Getty Images34Strategic Relationships Win – Win --Concerned about expanding the pie, not how to divide the pievs.RetailerVendor35Building Partnering RelationshipDiscreteOne Purchase at a TimeShort-TermFocuses on PriceWin-Lose NegotiationsGoverned by ContractsPartneringAnticipate FutureLong-TermConsiders all ElementsWin-Win CollaborationGoverned by Trust36Building Blocks for  Strategic PartnershipsMutual TrustOpen CommunicationsCommon GoalsCredible Commitments Stockbyte/Punchstock Images37Developing Trust:Capability or CompetenceCompetenceSalespeople demonstrate competence when they can show that they know what they are talking about.Requires knowledge of:The customerThe productThe industryThe competition(c) Digital Vision/PunchStock38Stages in Building Strategic RelationshipsAwarenessExplorationExpansionCommitment39Vendor Managed InventoryManufacturer access to POS informationReplenishment automatically triggeredEnables demand-based view of replenishment & production planning – reduce bull whip effect40VMI—What it Lacked Focused on replenishment activity onlyStatic-model based (assumed fixed reorder points to trigger replenishment)Often only moved inventory ownership rather than removing it Incomplete information for decision makingVendor and retailers use different systems and data bases41Collaborative Partnering Relationship - CPFRCommon goalsA single demand forecast developed collaborativelyCollaborative Promotional planning & executionA single, shared data sourceImproved inventory management across entire Supply ChainOptimized replenishment strategies with joint ownershipProcess simplicity creates optimal framework for success42Legal and Ethical IssuesContractual DisputesResale Price MaintenanceChargebacksCommercial BriberySlotting AllowancesBuybacksCounterfeit MerchandiseGray Markets and Diverted MerchandiseExclusive TerritoriesExclusive Dealing43Commercial BriberyA vendor or its agent offers to give or pay a retail buyer “something of value” to influence purchasing decisions.A fine line between the social courtesy of a free lunch and an elaborate free vacation. Rule of thumb - accept only limited entertainment or token gifts.44ChargebacksA practice used by retailers in which they deduct money from the amount they owe a vendor.Two Reasons:merchandise isn’t sellingvendor mistakesCan be a profit centerone senior executive at a large department store chain was told to collect $50 million on chargebacks45Slotting AllowancesFees paid by a vendor for space in a retail store.Currently aren’t legal.Retailers argue that they are a reasonable method for ensuring that their valuable space is used efficiently.Manufacturers view them as extortion.$9 billion or 16% of all new product introduction costs in grocery industry.46Slotting AllowancesHarvard School of EconomicsGive big suppliers competitive advantage over small suppliersDrive small suppliers out of business, then raise pricesAnti-competitive – adverse effect of social welfare Chicago School of Economics – Free MarketImproves market efficiencyResolve information asymmetry47BuybacksUsed to get products into retail stores.Two scenarios:Retailer allows a vendor to create space for its goods by “buying back” a competitors inventory and removing it from a retailer’s system.Retailer forces a vendor to buyback slow-moving merchandise.48Counterfeit MerchandiseGoods made and sold without the permission of the owner of a trademark, a copyright, or a patented invention that is legally protected in the country where it is marketed. Major problem is counterfeiting intellectual property.49What to do About CounterfeitersTrademark,copyright, and/or patent products in the countries in which they’re sold.US government is engaged in bilateral and multicultural negotiations and education to limit counterfeiting. (WTO)Take steps to protect yourself. 50Gray-Market and Diverted MerchandiseGray- Market Merchandise possesses a valid U.S. registered trademark and is made by a foreign manufacturer but is imported into the United States without permission of the U.S. trademark owner.Not Counterfeit.Is legal.Diverted Merchandise is similar to gray-market merchandise except there need not be distribution across international boundaries.51Gray-market and Diverted Merchandise: Taking SidesDiscount stores argue customers benefit because it lowers prices.Traditional retailers claim important service after sale will be unavailable May hurt the trademark’s image. 52Avoiding the Gray-Market ProblemRequire customers to sign a contract stipulating that they will not engage in gray marketing.Produce different versions of products for different markets.Steve Cole/Getty Images53Exclusive TerritoriesGranted to retailers so no other retailer in the territory can sell a particular brand.Benefits vendors by assuring them that “quality” retailers represent their products.Assure retailers adequate supply.Grants retailers a monopoly.Illegal when they restrict competition.54Exclusive Dealing AgreementsOccur when a manufacturer or wholesaler restricts a retailer into carrying only its products and nothing from competing vendors.Illegal when they restrict competition.55Tying ContractsAn agreement that requires the retailer to take a product it doesn’t necessarily desire to ensure that it can buy a product it does desire.Illegal when they lessen competition.Ok to protect goodwill and quality reputation of vendor. 56Refusals to Deal Suppliers and retailers have the right to deal or refuse to deal with anyone they choose. Except when it lessens competition. Kent Knudson/PhotoLink/Getty Images57Ethical IssuesShould a retailer sell merchandise that it suspect was made using child labor?Should a retailer advertise its prices are the lowest available in the market even though some items are not?Should a retail buyer accept an expensive gift from a vendor?Should retail salespeople to use a high-pressure sales approach when they know the product is the best for the customer’s needs?Should a retailer give preference to minorities when making promotion decisions?Should a retailer treat some customers better than other customers?58Guidelines1. Would I be embarrassed if a customer found out about this behavior?2. Would my supervisor disapprove of this behavior?3. Would most co-workers feel that this behavior is unusual?4. Am I about to do this because I think I can get away with it?5. Would I be upset if a company did this to me?6. Would my family or friends think less of me if I told them about engaging in this activity?7. Am I concerned about the possible consequences of this behavior?8. Would I be upset if this behavior or activity were publicized in a newspaper article?9. Would society be worse off if everyone engaged in this behavior or activity?59