Page 388 - Introduction to Business

362 PART 3 Marketing

consumers examine catalogs containing information about merchandise and then
order via mail, telephone, or Internet. This is a convenient means of shopping for
people who cannot get out of the house easily or who do not want to bother shop-
ping. Of course, there are several disadvantages in purchasing from catalogs,
including an inability to inspect the merchandise, having to wait at least several
days to receive purchases, and running a risk of being dissatisfied. Spiegel, J.C.
Penny, Land’s End, and J. Crew are several of the well-known catalog marketers.
direct-response marketing Using In direct-response marketing, a retailer uses various advertising media to ask
various media to ask consumers to consumers to purchase its product. A television ad, for example, may ask viewers to
purchase products
purchase paint to cover dents and scratches on cars. A magazine or newspaper
advertisement may promote a new book that can be purchased by mailing a filled-
out coupon or calling an 800 number. Direct mail literature requesting purchase
can be sent directly to consumers’ homes.
telemarketing Using the telephone to Telemarketing involves companies using the telephone to request that cus-
promote the sales of products and tomers purchase their products or services. Frequently, telemarketing will be used
achieve other marketing objectives
in conjunction with other marketing efforts, like direct mail, to generate sales. It can
also be used to ensure that customers are satisfied with their purchases. Because
many people find telemarketing calls annoying, legislation was passed in 2003
allowing consumers to be removed from telemarketers’ lists.
television home shopping Shopping Television home shopping refers to shopping on television cable channels that
from television cable channels that do do not have regular programming but promote products, often 24 hours a day.
not have regular programming, but Interested viewers can order by calling an 800 number and paying with a credit
instead promote products
card. Jewelry, clothing, housewares, and electronics are the most popular items
sold. The Home Shopping Network and QVC are the major players in this type of
nonstore retailing.
online retailing Making products and Online retailing makes products and services available to consumers through
services available to consumers computer connections. A wide variety of companies in several industries, such as
through computer connections
airlines and stock brokerage firms, sell products and services online. The major
problem with online retailing is security. Many people do not want to reveal their
credit card numbers or other personal information. Others are annoyed with unso-
licited efforts to sell them products online—spamming.
reality Have you purchased any product or service over the Internet? What did
CH ECK you like and dislike about this experience?

automatic vending Retailers dispensing Automatic vending consists of using vending machines to dispense convenience-
convenience-type merchandise in type merchandise at numerous locations. Candy, cigarettes, sandwiches, soups, chew-
machines
ing gum, and postage stamps are examples of products sold extensively through vend-
ing machines. Although their convenient location is beneficial to users, they are often
a source of frustration if they malfunction. Automatic vending is frequently a high-cost
sales method. Expenses can often be as high as 40 percent of sales.
The nonstore retailing options are more popular in some countries than in the
United States. Mail order, automatic vending, and direct selling have grown at a
significantly slower pace in the United States during the last decade than in Japan.
Germans spend a higher percentage of their income on mail-order products than
do Americans.

Logistics
In the early 1980s, Wal-Mart had operating costs amounting to 22 percent of rev-
enues. The company began an aggressive effort to reduce these costs. They were
successful; in only a decade, these costs had dropped to 14 percent of revenues.
By being a low-cost retailer, Wal-Mart was able to employ an everyday low-pricing

Copyright 2010 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.