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Chapter Eleven: Retailing and Wholesaling

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19 views

Chapter Eleven: Retailing and Wholesaling

Uploaded by

Ikhmal Hamid
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 23

Chapter Eleven

Retailing and Wholesaling


Roadmap: Previewing the Concepts

1. Explain the roles of retailers and


wholesalers in the distribution channel.
2. Describe the major types of retailers and
give examples of each.
3. Identify the major types of wholesalers
and give examples of each.
4. Explain the marketing decisions facing
retailers and wholesalers.

Copyright 2007, Prentice Hall, Inc. 11-2


Case Study
Whole Foods Market – Finding Its Niche

Whole Foods Market Marketing Efforts


 Has 170 stores worldwide  Web site reinforces the
with $4 billion in sales vs. company’s positioning.
5000 stores and sales of  Caters to health conscious,
$285 billion for Wal-Mart. affluent, liberal, educated
 Offers organic, natural, consumer base.
and gourmet foods.  Both in-store and online
 Positions itself AWAY shopping is a customer
from Wal-Mart: experience.
“Whole Foods, Whole  Cares about employees,
People, Whole Planet.” customers, & community.
Copyright 2007, Prentice Hall, Inc. 11-3
What Is Retailing?

 Retailing:
– includes all the activities involved in
selling products or services directly to
final consumers for their personal, non-
business use.

 Most retailing is done by retailers, but


nonstore retailing has recently grown
by leaps and bounds.
Copyright 2007, Prentice Hall, Inc. 11-4
Types of Retailers

 Retailers are classified based on:


– Amount of service they offer
– Breadth and depth of product lines
– Relative prices charged
– How they are organized

Copyright 2007, Prentice Hall, Inc. 11-5


Amount of Service

 Self-Service Retailers:
– Serve customers who are willing to perform their
own “locate-compare-select” process to save
money.
 Limited-Service Retailers:
– Provide more sales assistance because they carry
more shopping goods about which customers
need information.
 Full-Service Retailers:
– Usually carry more specialty goods for which
customers like to be “waited on.”

Copyright 2007, Prentice Hall, Inc. 11-6


Major Store Retailer Types

 Specialty stores
 Department stores
 Supermarkets
– Category Killers
 Convenience stores
 Discount stores
 Off-price retailers
 Superstores
Copyright 2007, Prentice Hall, Inc. 11-7
Relative Prices Classification

 Discount stores
 Off-price retailers
– Independent off-price retailers
– Factory outlets
• Factory outlet malls
• Value-retail centers
– Warehouse club

Copyright 2007, Prentice Hall, Inc. 11-8


Organizational Classification

 Corporate chain stores


 Voluntary chain
 Retailer cooperative
 Franchise
 Merchandising conglomerates

Copyright 2007, Prentice Hall, Inc. 11-9


Retailer Marketing Decisions

 Retailer Strategy:
– Target market
– Retail store positioning
• Until retailers define and profile their
markets, retailers cannot make
meaningful decisions related to the
retailer marketing mix.

Copyright 2007, Prentice Hall, Inc. 11-10


Retailer Marketing Decisions

 Retailer Marketing Mix:


– Product assortment and services
– Price
– Promotion
– Place (location)

Copyright 2007, Prentice Hall, Inc. 11-11


Assortment and Service
Decisions

 Product assortment
– Should differentiate the retailer while
matching target shoppers’ expectations
 Services mix
 Store atmosphere
– Physical layout can help/hinder shopping
– Experiential retailing helps sell goods
– Unusual, exciting shopping environments
are becoming more common
Copyright 2007, Prentice Hall, Inc. 11-12
Price and Promotion
Decisions

 Price policy must fit its target market


and positioning, product and service
assortment, and competition.

 Can use any or all of the promotion


tools—advertising, personal selling,
sales promotion, public relations, and
direct marketing—to reach consumers.

Copyright 2007, Prentice Hall, Inc. 11-13


Place Decisions

 Retailers can locate in central business


districts, various types of shopping
centers, strip malls, or power centers.

 Location is key to success.

Copyright 2007, Prentice Hall, Inc. 11-14


The Future of Retailing

1. New Retail Forms 5. Growing


and Shortening Importance of
Retail Life Cycles Retail Technology
2. Growth of 6. Global Expansion
Nonstore Retailing of Major Retailers
3. Retail 7. Retail Stores as
Convergence “Communities” or
4. Rise of the “Hangouts”
Megaretailers

Copyright 2007, Prentice Hall, Inc. 11-15


Wholesaling

 Wholesaling:
– includes all activities involved in selling
goods and services to those buying for
resale or business use.

 Wholesalers add value for producers


by performing one or more channel
functions.

Copyright 2007, Prentice Hall, Inc. 11-16


Functions Provided by
Wholesalers

 Selling and  Financing


promoting  Risk bearing
 Buying and  Market
assortment information
building  Management
 Bulk-breaking services and
 Warehousing advice
 Transportation
Copyright 2007, Prentice Hall, Inc. 11-17
Types of Wholesalers

 Merchant Wholesalers
– Largest group of wholesalers
– Account for 50% of wholesaling
– Two broad categories:
• Full-service wholesalers
• Limited-service wholesalers

Copyright 2007, Prentice Hall, Inc. 11-18


Types of Wholesalers

 Brokers and Agents


– Do not take title to goods
– Perform fewer functions
– Brokers bring buyers and sellers together
– Agents represent buyers on more
permanent basis
– Manufacturers’ agents are most common
type of agent wholesaler

Copyright 2007, Prentice Hall, Inc. 11-19


Types of Wholesalers

 Manufacturers’ Sales Branches and


Offices
– Wholesaling by sellers or buyers
themselves rather than through
independent wholesalers.

Copyright 2007, Prentice Hall, Inc. 11-20


Wholesaler Marketing
Decisions

 Wholesaler Strategy:
– Target market
– Service positioning
 Wholesaler Marketing Mix:
– Product assortment and services
– Price
– Promotion
– Place (location)

Copyright 2007, Prentice Hall, Inc. 11-21


Trends in Wholesaling

 Fierce resistance to price increases.


 Winnowing out of suppliers who are
not adding value based on cost and
quality.
 Distinction between large retailers and
wholesalers is blurry.
 Will continue to increase the services
provided to retailers.
 Wholesalers are now going global.
Copyright 2007, Prentice Hall, Inc. 11-22
Rest Stop: Reviewing the Concepts

1. Explain the roles of retailers and


wholesalers in the distribution channel.
2. Describe the major types of retailers and
give examples of each.
3. Identify the major types of wholesalers
and give examples of each.
4. Explain the marketing decisions facing
retailers and wholesalers.

Copyright 2007, Prentice Hall, Inc. 11-23

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