Page 442 - Foundations of Marketing

Retailing, Direct Marketing, and Wholesaling | Chapter 14 409

atmosphere. A low-end, family dining restaurant might play fast pop music to encourage cus-
tomers to eat quickly and leave, increasing turnover and sales. A high-end restaurant, on the
other hand, will opt to play classical music to enhance the dining experience and encourage
patrons to indulge in multiple courses. Many retailers employ scent, especially food aromas,
to attract customers. Most consumers expect the scent of a store to be congruent with the
products that are sold there. For example, Starbucks should smell like its coffee, Panera like
its freshly baked bread, and Yankee Candle like its scented candles. Online retailers are not
exempt from concern over atmospherics. Recent studies have demonstrated that such ele-
ments as the layout of a site and the content of digital ads that appear on that site can affect
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consumer mood and shopping behavior.
Category Management

Category management is a retail strategy of managing groups of similar, often substitutable
products produced by different manufacturers. It developed in the food industry because super-
markets were concerned about competitive behavior among manufacturers. Supermarkets use
category management to allocate space for their many product categories, such as cosmetics,
cereals, and soups. The assortment of merchandise a store chooses is strategic and meant to
improve sales and enhance customer satisfaction.
Category management is part of developing a collaborative supply chain, which enhances
value for customers. Successful category management involves collecting and analyzing data
on sales and consumers and sharing the information between the retailer and manufacturer.
Walmart, for example, has developed strong supplier relationships with major manufacturers
like Procter & Gamble. Collaborative supply chains should designate one source to develop a
system for collecting information on demand, consumer behavior, and optimal product alloca-
tions. The key is cooperative interaction between the manufacturers of category products and
the retailer to create maximum success for all parties in the supply chain. Because category
management can be such an important consideration for retailers, many global fi rms belong to
the Category Management Association, which provides networking opportunities and infor-
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mation for member fi rms.

DIRECT MARKETING, DIRECT SELLING, LO 4 . Recognize the various
forms of direct marketing,
AND VENDING direct selling, and vending.

Although retailers are the most visible members of the supply chain, many products are
sold outside the confines of a retail store. Direct selling and direct marketing account for an
increasing proportion of product sales globally. Products also may be sold in automatic vend-
ing machines, but these account for a very small minority of all retail sales.
category management A retail
strategy of managing groups
Direct Marketing of similar, often substitutable
products produced by different
Direct marketing is the use of the telephone, Internet, and nonpersonal media to communi- manufacturers
cate product and organizational information to customers, who can then purchase products
direct marketing The use of
via mail, telephone, or the Internet. Direct marketing is one type of nonstore retailing. Sales
the telephone, Internet, and
through direct marketing activities are large, accounting for about 8.7 percent of the United nonpersonal media to introduce
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States’ entire GDP. products to customers, who
Nonstore retailing is the selling of products outside the confi nes of a retail facility. It can then purchase them via
is a form of direct marketing that accounts for an increasing percentage of total retail sales, mail, telephone, or the Internet
particularly as online retailing becomes more popular. Direct marketing can occur through nonstore retailing The
catalog marketing, direct-response marketing, telemarketing, television home shopping, and selling of products outside the
online retailing. confines of a retail facility

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