Oct 29 Revivew & Update: Retail Channels

Today's topic: retail and the product itinerary

NYC delivery: you don't have a car, so how do you "schlep" the stuff home? You have stuff delivered, that's how. 

What's in Here:

Lexicon, a Review, and a Reading Assignment.

Lexicon

DTC: Direct to consumer (what Avon used to do--but now, in China, they are also at the cosmetics counter in department stores)

Bolsa familiar: the social program (started, I believe, by President Lula in Brazil, or Brasil, if you are in Brasil).  It tried to lower the poverty rate by guaranteeing a floor income for poor people.  It had the result of pushing some lower income people into the lower-middle-class, which in turn raised the level of household consumption.  Of computers and Epson printers, for example.

Curaçao: a chain of department stores targeting lower income new arrival immigrants, started in Los Angeles by a couple of entrepreneurs.

Logias Americanas: a chain of white-goods stores in Brazil, targeting middle-class consumers.

Trust: an element in exchange or purchase that presents an interesting cultural problem.  What is fresh milk?  Can packaging increase trust?  Who do you trust to buy safe, healthy products?

Transaction: the moment when goods change hands for money.  Shopping is the wider process; transaction is the moment of monetary exchange.

Desjeux and Zhang: authors of the paper about the product itinerary that you've read.

Review

First,  we discussed how you MUST find a product.

You MUST find someone to talk to in the country you are targeting. 

We suggested that you can check Facebook.  Cameroonians are on Facebook; they tend to be from Los Angeles. How can you find them?  Maybe "friend" a Cameroonian in Los Angeles and find out who they know in Yaounde? Maybe find a phone number for a business and try giving a call?  Maybe trying to find a local, African social networking site?  Maybe, call the embassy in Washington: ask for the cultural attache, the chargé for cultural or economic activities?  Embassy's have offices for cultural affairs, tourism, and for business.  Try to find someone to talk to you. 

But when you get someone, what to talk about?  

I suggest you walk them through the product itinerary.  Ask about:

1. Pre-purchase

2. Purchase

3. Transport

4. Storage

5. Use

6. Disposal

You should ask about your product or product category.  Say its a computer. So then,  at each point along the itinerary, you may ask what people do.  for (1. Pre purchase, you ask, maybe "how do you figure out what to buy?  talk to friends? learn about it on tv? Just go to the store?  What store?  How do you shop?  Do you shop on-line?  Who do you TRUST for information about  the product?  Then, (2.) where do you go to purchase?  Where else might you go?  Do other people go to other kinds of stores? Are there really more than one place to get them?  Does anyone sell this stuff door-to-door

*note: in Keegan, we are reminded that cars in Japan are sold door to door.  So much for simple evolutionary models of retail, right? 

Then, consider transport, storage, and Use.  For use: who uses?  Who shares?  Who decides when something can be used?  (these questions demand some creativity: and they depend on the product.  Then disposal.  Think about the things associated with the product: does it come in a box? A Bag?  Is the box or bag re-used? Does the box or bag convey any information?  Are things really consumed, and thrown away, or are they given away or put in storage at the end of their useful life? (Think: Americans with TV sets tend to put them in the kid's room, then the garage, where they live forever, or they go to the goodwill at some point: things are recycled whether you know it or note: think of clothing in Santiago, Chile.). 

Today in class we talked about Chapter 12 in Keegan, retail channels. Reviewing Keegan's chart on page 

 336.  What is missing?  Hint: do you buy stuff on a smart-phone?

We put ourselves in groups, six of them, to interview six people who are not natives to the USA (or, in one case, a USA person who never ever buys things online, making him a little bit of an outlier).  We learned about Breakfast in each country, and asked questions about the product itinerary.

Reading Assignment

1. Be sure you have read and understood Chapter 12 in Keegan.

2. Be sure to download and read the short article on China Panasonic in China. 
3. Download and review the powerpoint from store location research about New York (okay, its not International, but its a very different culture).

Next Class:
We'll continue to briefly report out the results of your interviews about breakfast.
We'll discuss using the product itinerary as a way to discuss retail distribution problems, challenges, and strategy. We'll discuss the New York example, and watch some video. There will be a quiz about this, and watch out.  You actually will have to write something.