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Consumer marketing strategy
Two factors will allow QuickReturns to build consumer awareness of its services with less advertising than typical start-ups:
QuickReturns will have a website at www.quickreturns.net with information on the QuickReturns services, procedures, benefits to consumers, links to retailer partners categorized by product category, and a location finder linked to online maps. The site will be designed for easy navigation and access to company information.
QuickReturns media advertising will convey two key concepts:
Advertisements also will contrast the positive experience of returning products through QuickReturns against the potential pitfalls of returning products through other means. Marketing campaigns will be intensified around the holiday season, when the majority of returns occur. Radio, magazines, and billboards will be emphasized over television as the preferred marketing channels in order to realize greater return on marketing investment.
Retailer partner marketing strategy
Retailer partners will be approached once a relatively firm technology completion date has been set and a distribution partner secured. Business development and operations executives will be contacted directly at retailers that are best suited for QuickReturns.
Distribution partner marketing strategy
Striking favorable agreements with the proper distribution partners is critical to the success of QuickReturns. A number of attractive potential distribution partners have been identified. Soon after securing its funding and technology partner, QuickReturns intends to approach the senior management of these companies. Approaching potential distribution partners at that time will strengthen QuickReturns' negotiating position and minimize intellectual property risks.
In its initial roll out, QuickReturns will focus business development efforts on office superstores and parcel depots. Not only do these stores offer the shipping services necessary for QuickReturns operations, but they share synergies with QuickReturns customer segments. Consumer traffic accounts for 40% of sales for office superstores, and likely accounts for an even higher portion in the parcel depot market. Five chain stores have been selected as the top choices for QuickReturns partnership.
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QuickReturns offers its clients, electronic retailers, and catalog merchants, a possibility to reduce costs associated with reverse logistics and thus increase customer service and enhance customer loyalty. By providing 'no-hassle' product return or exchange facilities it will help consumers become more comfortable with Internet and catalog shopping. Customer service and profitable growth are two major cornerstones of QuickReturns.
The customer segments QuickReturns targets - catalog merchants, e-tailers, and click-and-mortar stores - are expected to produce 170 million returns this year and 370 million by 2003. These projections are considered conservative, as the rate of e-returns is projected to reach parity with return rates of brick and mortar stores, which currently are twice as high.
Assuming a $42 average product price and an average of 2.5 products per order, 480 million products were ordered online in 1999, representing a 400% increase from a year earlier. The rapid pace of online sales growth is expected to continue as 2003 e-commerce revenues top $144 billion from 3.5 billion online purchases.
QuickReturns will aggressively target consumer catalog merchants, a sector whose 2001 sales was nearly three times as great as those of B2C e-commerce. From the returns standpoint, catalog merchants represent an attractive market since many have return rates higher than those of e-tailers. For instance, BMG Direct, a direct marketer of pre-recorded music, processes 40,000 returns daily, requiring a staff of 140 people to inspect products and credit customer's accounts. Largely due to the adoption of Internet sales, the mail-order catalog industry is projected to grow only moderately in coming years, but will continue to represent a sizeable distribution channel.
Virtual retailers face a growing competitive threat from brick-and-mortar retailers, which are increasingly pursuing online (click-and-mortar) strategies. Such retailers can use their physical infrastructure as a returns channel for goods purchased online, giving them leverage over pure-play e-tailers. But with the growth of their catalog and website businesses, many traditional brick-and-mortar retailers will face a similar returns problem as their virtual counterparts: not all of their Internet and catalog customers will have access to physical locations to return merchandise. Companies such as J. Crew and Nordstrom have relatively few store locations, leaving the majority of their Web and catalog customers without a place to return goods. Such click-and-mortar retailers therefore would benefit from partnerships with QuickReturns.
The chart and table below summarize the total market potential for e-returns market in the U.S.
QuickReturns will position itself as the premier returns-outsourced service provider serving Internet businesses as well as click and mortar businesses. Retailers will appreciate the cost savings of the outsourced services as well as the exemplary customer service offered to final consumers. This positioning will be achieved by leveraging QuickReturns' competitive edges.:
The single objective is to position QuickReturns as the premier e-retailer return partner, quickly achieving market penetration. The marketing strategy will seek to first generate strategic relationships with distribution and retail partners, generate consumer awareness, and increase usage of existing customers of QuickReturns' services.
The message that QuickReturns will seek to communicate is that it offers a convenient, easy option to deal with returns for e-tailers, click and mortars, and catalog merchants. This message will be communicated through a variety of ways. The first way is through advertisements. QuickReturns will be using radio, magazine, and billboard advertisements to generate visibility for the company.
A second method of communication will be through business development activities. These efforts will build relationships with different distribution partners as well as retail partners. These activities will be especially important to accomplish the lofty market penetration goals that QuickReturns has aimed for.
QuickReturns' marketing mix is comprised of the following approaches to pricing, distribution, advertising and promotion, and customer service.
Two types of market research were used when QuickReturns was collecting market research. The first type of research was focus groups. The focus groups were collections of seven to nine people who were asked a series of predetermined questions with the responses recorded and discussed among the group members. In addition to the pre-established questions, there was a free-flow discussion format toward the end of the focus group that provided flexibility in allowing the participants to share information and insight with QuickReturns.
Additionally, questionnaires were used to collect market information from perspective customers. The questionnaires were submitted to a total of 200 potential customers.. The response rate was 87, higher than expected. The validity and usefulness of the questionnaire was ensured by utilizing a graduate statistics student to develop the questionnaire. Overall, both forms of primary market research were insightful. This research confirmed many already held assumptions as well as introduced several valuable perspectives that QuickReturns was not yet privy to.
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