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Marketing Channels

The brick and mortar marketing channel is a format traditionally known by the baby boomers generation; selling to individuals in a face to face environment. Though, in this day and age individuals want to shop online because of the convenience.

The way most businesses is done is through a specific environment that requires the creation of demand in the marketplace at a worldwide level. When a company sells its goods online they are not tied to a customer in the sense of having them physically present as they make a purchase. Through selling online, a business can lessen their overhead expenses; brick and motor storefront have expenses that reduce their profit and creates higher prices as a result. Customers that buy online are able to purchase the standard merchandises and can benefit from customizing their order. For example, a buyer can order a book and have it engraved and personalized for that special individual located in another state at no extra cost (Finch, 2012). One foremost important advantage of selling online is the fact that a company can direct its advertisement straight towards the target marketplace and offer the capability to promptly buy the item.

Even though online shopping has great benefits, there are still drawbacks associated with this purchasing option, and that is the fact that the customer does not have access to the tangible product. Although shopping online adds try to convince you that the experience can be as personable as you want to make it, still, a lot of customers like the human experience and interaction as they shop (Finch, 2012). My husband loves to talk and human interaction and experience make the shopping even more eventful and colorful. He talks with the sales rep during his purchase. The human interaction is great and you return a product if needed, but if a product that is ordered online needs to be returned, the process attached to this act sometimes is discouraging because it involves multiple steps.

There are some potential problems that a company needs to take into account and consider as they prepare to sell their products online. The traditional channel relationship with partners could be hindered as the organization sells directly to the consumer, eliminating wholesalers and distributors (Finch, 2012). Companies may not completely realize that a specific infrastructure is required to serve consumers online and the challenges associated with these sales (Finch, 2012). There are also new costs to consider when deciding whether or not to sell goods directly to consumers’ via the internet. The development of a catching website, upkeep and update the information provided. This will allow the company to correctly serve the buyer by creating an automated ordering process and performing search engine optimization. Companies need to be aware of the expenses tied to operating an online store effectively (Finch, 2012). The online business must also begin an effective return and exchange process for the buyers’ when an order is placed. Even though they are specific costs attached to online stores, a one-time payment for web development, signs and monthly fee for the upkeep, it is still less costly than a monthly rent payment. Stores like Wal-Mart, Pier 1, and Zara, have a great advantage because they sell a large range of products online that are not sold in stores and can be delivered to customers directly from their warehouse or other sellers.

Companies face more competition online and the marketing strategy is more challenging also as it is compared to a storefront. There are more and more online competitors that make it their business to stay in the limelight and they use social media (YouTube, Facebook, Twitter, etc.) to promote their products through adds and videos. Likewise, storefront business also uses videos, flyers, and emails. A good strategy to use is forts to build a customer base by using using the brick and mortar channel then create the online store to reach new customers.

Reference

Finch, J. (2012). Managerial marketing [Electronic version]. Retrieved from https://ashford.content.edu

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There are many challenges when transitioning from selling in a brick and mortar location to sell products online.  The first thing to call out is how to make the product attractive to a new consumer online.  some products such as mattresses are better bought in a store while you can test the product.  In a storefront brick and mortar, a customer can lay down on the mattress to know how it feels before they buy.  Because everyone is different, online descriptions of the product may not be easily transitioned to personal experience thus not providing enough information to make a good decision.  In these cases, companies need to incentive people not able to make it to the store to purchase online by offering safety nets such as free returns within 100 days.  One of the benefits of online shopping and why most people do it is the convenience of never having to leave the comforts of your home. 

If Zara and Pier 1 is having difficulty transitioning from in-store sales to online sales it may be because of the trendy nature.  Often it can be hard to visualize something you don’t have experience using.  Judging by some of the Zara styles found online, I would find it hard to know if I like what I look like in them especially because I don’t wear these styles.  Pier 1 may be having difficulties because they are used to selling larger items like chairs, tables, and dressers.  While they do sell smaller items shipping can get expensive especially when you run promotions on free shipping.  people with the means to pick up these large items may find similar items cheaper elsewhere.  One thing that helps merge the gap between online channels and traditional stores are providing a list of items and which store they are found in.  Redbox does this with their movies.  If you are looking for a movie then you can look up where it is and then go to pick it up.  If they did this then they would allow customers to do their browsing online and then show up to the location, try it out to know if they really like it or not. 

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Challenges organizations face transitioning between selling using brick and mortar channel to selling online

The transition that companies must deal with when going from selling products in a brick and mortar setting to an online setting can be a difficult one. For one, an organization that has put time, effort and research into having the most appealing sales floor space and design must now re-direct that focus to the web. Generally speaking someone who is an expert at designing store fronts and retail space is most likely not an expert and designing and developing a web page. Another difficulty is the presentation of the product being sold. Whether it is a piece of clothing that may need to be tried on or a tool that would need to be tested by the user, ecommerce does not offer the option to actually touch, feel and use the product.   Therefore, companies must expertly provide as many photographs and written descriptions as possible so that consumers know what they are purchasing. Lastly, brick and mortar retailers often have salespeople at their location and these people are able to interact with consumers face-to-face and can educate them and work to overcome any objections. This must be refocused to having someone available online to chat with inquiring customers or be available to speak with them on the phone to ask any questions.

Strategies companies having difficulty developing ecommerce capabilities can implement to increase movement of customers between traditional and online channels

I think one of the most important things companies can do to have effortless movement of customers back and forth between traditional and online channels is to make both options available to consumers and be able to address the unique needs of both the online and in-person consumer. It is important to let brick and mortar shoppers know that they may be able to find more selections and sizes of their products online. Conversely, it is important to let online shoppers know that if they really want to see and feel the product they are inquiring about in-person, that a retail outlet is available near them and they can be provided with addresses of where to locate these locations.    If an organization is planning to move exclusively online, then they need to increase their online, radio and television advertising as they will no longer be able to benefit from customers driving by and seeing their store location in person. A solid strategy to help transition consumers from brick and mortar locations to online options would be to have computers or smart devices right in the store. Then they can have employees show consumers the ease at which they can find their products online. Once in-person consumers realize the ease at which they can purchase items without leaving their homes, they may be more apt to go that route the next time they need that product.

Benefits and limitations of selling through a store front

When organizations sell through a store front, consumers are able to touch, feel and experience the product they are looking to purchase. They are able to either try clothes on, or play the video game or dribble the basketball to ensure that they like the feel. Further, consumers are able to interact in-person with a salesperson who can answer any questions that they may have and may be able to persuade them into additional purchases.

Selling through a store front also has its share of limitations. For one, brick and mortar locations can be very expensive to rent, pay utilities on and then pay employees to work at them. Retail locations are also limited in the hours they are able to be open. They also have limitations on the amount of colors, sizes and styles of the product they can offer. They only have so much storage space and cannot have every type and every size of every product. It is just not always possible.

Benefits and limitations of selling online

One of the great things about e-commerce is that it allows for consumers to learn about a much wider variety of products than what is available at a brick and mortar location. Consumers have access to so many more options when purchasing from an online retailer. Another huge benefit of selling online is the ease at which consumers can purchase the products. With smart phones, consumers can literally buy just about anything without getting out of bed. With modern society keeping everyone always pressed for time, the ease at which online shopping can be done cannot be overstated enough.

E-commerce does have some limitations. Online retailers are not able to interact in real time with their potential customers. Therefore, an effective sales person will not be able to entice a consumer into purchasing a product the way they would in person. Further, online shoppers are unable to hold the product they are purchasing in their hands. Once they receive the product, it may not be exactly what they were looking for and this may cause an increase in product returns. Online selling also leads to increased costs of shipping, as all of the goods purchased must be mailed to the consumers as they are unable to walk out of the store with them.

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2. Adams Enterprises has bonds on the market that have 13 years left to maturity. These bonds sell for $1,045 and have an annual coupon. At this price the bonds yield 7.5%. What is the coupon rate on these bonds?They have a coupon rate at 7.5%, and pay semi-annual payments. It the yield to maturity is 8.75%, what is the current bond price?

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I am trying to do the Excercises from Chapter 8, in Intro to ArcGIS and there are samples of screenshots that are blurry and useless, but I am looking for help on how to actually do the assignment. GIS3043

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12,0%

1.    Explain the terms ‘market value of debt’ and ‘market value of equity’

2.    What does the term ‘pure play’ mean according to Narayanan et al? What would be an appropriate pure play for Google if they had plans to launch a pay TV channel?

3.    How do the ‘cost of debt’ and ‘cost of equity’ affect the considerations regarding investment proposals?

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Cash Flows at Warf Computers, Inc. Warf Computers, Inc., was founded 15 years ago by Nick Warf, a computer programmer. The small initial investment to start the company was made by Nick and his friends. Over the years, this same group has supplied the limited additional investment needed by the company in the form of both equity and short- and long-term debt. Recently the company has developed a vir- tual keyboard (VK). The VK uses sophisticated artificial intelligence algorithms that allow the user to speak naturally and have the computer input the text, correct spelling and grammatical errors, and format the document according to preset user guidelines. The VK even suggests alternative phrasing and sentence structure, and it provides detailed stylistic diagnostics. Based on a proprietary, very advanced software/hardware hybrid technology, the system is a full gen- eration beyond what is currently on the market. To introduce the VK, the company will require significant outside investment. Nick has made the decision to seek this outside financing in the form of new equity investments and bank loans. Naturally, new investors and the banks will require a detailed financial analysis. Your employer, Angus Jones & Partners, LLC, has asked you to examine the financial statements provided by Nick. Below is the balance sheet for the two most recent years and the most recent income statement. WARF COMPUTERSBalance Sheet($ in thousands)2006 2005Current assets:   Cash and equivalents $ 232 $ 201   Accounts receivable    367    342   Inventories    329    340  Other      47     40Total current assets $ 975$ 923 Fixed assets:   Property, plant, and equipment$2,105$1,630   Less accumulated depreciation     687     560  Net property, plant, and equipment$1,418$1,070  Intangible assets and others      406     363Total fixed assets $1,824$1,433 Total assets $2,799 $2,356 Current liabilities: Accounts payable $ 263 $ 197 Notes payable      68      53 Accrued expenses    126    205 Total current liabilities$ 457 $ 455 Long-term liabilities: Deferred taxes $ 143 $  82 Long-term debt    629    589 Total long-term liabilities$ 772 $ 671 Stockholders’ equity: Preferred stock $   10 $   10 Common stock      72      64 Capital surplus    438    399 Accumulated retained earnings1,147    822 Less treasury stock    -97    -65 Total equity $1,570 $1,230 Total liabilities and shareholders’ equity $2,799 $2,356 WARF COMPUTERSIncome Statement($ in thousands)Sales $3,875 Cost of goods sold   2,286 Selling, general, and administrative expense      434 Depreciation      127 Operating income $1,028 Other income        38 Earnings before interest and taxes (EBIT) $1,066 Interest expense        76 Pretax income $  990 Taxes      347 Current: $ 286 Deferred: $   61 Net income $  643 Addition to retained earnings $   325 Dividends $   318 Nick has also provided the following information: During the year the company raised $94,000 in new long-term debt and retired $54,000 in long-term debt. The company also sold $47,000 in new stock and repurchased $32,000 in stock. The company purchased $629,000 in fixed assets and sold $111,000 in fixed assets. 1.How would you describe Warf Computers’ cash flows? 2.Which cash flow statement more accurately describes the cash flows at the company, the financial statement of cash flows or the accounting statement of cash flows? 3.   Comment on War Computer’s expansion plans.

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