Clique: Marketing and Shelf Space

More recently, the recession impelled many bricks-and-mortar retailers towards a damaging focus on discounting that eroded not only many stores’ price positioning but also any point of differentiation or exclusivity.

d) Break even sales change that would change the profits by the same amount as a reduction in price.

6) Access To Distribution Channels: Big Three have ease of access to distribution channels, for instance through their “Shelf-Space Plans”. These were intended to give their products the most valued positions in supermarkets, offering also a simple resolution to shelf space struggle (space was allocated in proportion to historical sales

The competition between the wholesale club industry is pretty strong but is mostly dominated by the three main competitors which are: Costco, Sam’s club and BJ’s Wholesale club. These three wholesale clubs for the most part dominate the industry and take away customers from other retail stores because they can offer much lower prices, brand name items and a wide variety of items to purchase from them. When it comes to shares of warehouse sales, Costco had roughly 56 percent of sales, Sam’s club had 36 percent and BJ’s wholesale had a low 8 percent. Unlike most retail stores, these three display all of their items on pallets or their inexpensive shelving which provides them with low cost on décor, labor and advertising.

(b) diversified its product portfolio; extend target customers and meet the variable needs of customers.

More shelf and trade promotion: The third strategy would be to spend more money on shelf

That being said, suppliers can have some power in regards to choosing the number of stores where their product can be purchased at. This allows the suppliers to regulate their sales and stay away from the “red tape”. The bargaining power of customers impacts HBC as customers are able to influence pricing based on their buying habits. Of course, customers do not choose the retail prices offered to them, however, if inexpensive clothing were to lead the industry, retail stores would adapt to this consumer demand and offer an abundance of inexpensive clothing due to consumer preferences. These forces lead to rivalry among competitors due to the many options offered to consumers to grant their desires. These forces combine to cause strategic implications for HBC. HBC must differentiate itself from its competitors who, similar to HBC, have large annual revenue, strong and profitable supplier agreements and large amounts of capital. As well, due to competitors large sale volumes, competitive pricing is an implication which faces

Target has suggested that its vendors create special products or prevent price comparisons to help decrease consumer show-rooming (Kinicki & Williams, 2013). Pressure of this sort could create opportunities for vendors to participate in unethical practices and could create a negative image for Target (McKay, Nitsch, & Peters, 2015). Although laws, such as the Sarbanes-Oxley Act, are basic frameworks that business operations must comply with, there is no guideline that businesses have to follow when making business decisions. Furthermore, ethical behavior can be perceived by customers, investors, and society as corporate responsible while creating additional value for products or services (Kinicki et al., 2013). Target should ensure that it ethically follows all constraints of the law while considering the impacts its decisions will have on its stakeholders, and while fostering an image, responsibly by corporate.

Chief elements of Costco’s strategy were low prices, limited selection, and a treasure-hunt shopping environment. The ultra-low pricing strategy includes a mark-up capped at 14% and Kirkland, a Costco brand designed to be of equal or better quality than national brands. Product Selection is limited to 4,000 items within a wide variety of categories. Costco does however include ancillary businesses to increase member alternatives. The loss of sales from customers who refuse to purchase large amounts is considered “Intelligent loss of sales.” Treasure-Hunt Merchandising consists of a constantly changing selection of 1,000 luxury items on the floor enticing shoppers to spend more than

3. Repeat the Question 2 analysis, but now assume that the new marketing program is implemented.

z. P2) High profits are the signal that consumers want more of the output of the industry.

a. The company wouldn’t produce replicas and change their business model (sales are still increasing roughly 20% each year)

Promote bulk orders among the small customers so that effective price/cup for small customers can be brought down.

11) By how much would the profit contribution of product A has to increase before it will be profitable to produce A?

a. Assuming the most current operational cost levels, what sales must it generate to recoup the above investment?