Marketing Management

Sixteenth Edition

Chapter 16
Managing Retailing

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Learning Objectives
16.1 Explain the key changes defining modern retailing.
16.2 Define the marketing decisions that retailers face.
16.3 Describe how a company manages omnichannel
retailing.
16.4 Explain the key principles in building and managing
private labels.
16.5 Describe the key aspects of wholesaling.

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Modern Retailing
• Retailing
– All the activities in selling goods or services directly to
final consumers for personal, nonbusiness use

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The Modern Retail Marketing
Environment
• Competitive retail market structure
– New retail forms and combinations
– Retailer consolidation
– Growth of mobile retailing
– Growth of omnichannel retailing
– Growth of fast retailing
– Increasing role of technology
– Decline of middle-market retailers

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Key Retailing Decisions (1 of 8)
• Target market • Store atmosphere and
experiences
• Product assortment
• Pricing
• Procurement
• incentives
• Services
• Communications
• Store atmosphere

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Key Retailing Decisions (2 of 8)
• Target market
– Define and profile target before making other
decisions

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Key Retailing Decisions (3 of 8)
• Product assortment and procurement
– Match shopper expectations for breadth and depth
– Develop product differentiation strategy
▪ Destination categories

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Key Retailing Decisions (4 of 8)
• Services
– Self-service
– Limited service
– Full service

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Key Retailing Decisions (5 of 8)

• Store atmosphere
– Consider all the senses

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Key Retailing Decisions (6 of 8)
• Pricing
– Most retailers are high markup/low volume or low
markup/high volume
– Manage price and manage price image

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Key Retailing Decisions (7 of 8)
• Incentives
– Everyday low pricing (EDLP)
– High–low pricing
– Geofencing

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Key Retailing Decisions (8 of 8)
• Communications
– Tools to generate traffic and purchases
▪ Shopper marketing
▪ Technology—“smart” shopping carts

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Managing Omnichannel Retailing
• Retailers must decide which channels to employ to reach
their customers—increasingly, the answer is multiple
channels

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Brick-and-Mortar Retailers (1 of 3)
• Department stores

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Brick-and-Mortar Retailers (2 of 3)
Most common brick-and-mortars:

• Department store • Category killers

• Specialty store • Extreme value or hard-
discount store
• Supermarket
• Off-price retailers
• Convenience store
• Warehouse clubs
• Drug store
• Automatic vending
• Mass merchandisers

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Brick-and-Mortar Retailers (3 of 3)
• Location, location, location!
– Central business districts
– Regional shopping centers
– Community shopping centers
– Shopping strips
– Location within a larger store
– Stand-alone stores

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Online Retailers
• No cost for retail floor space, staff, and inventory
facilitates sales of low-volume products to niche markets

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Omnichannel Retailing
• Most brick-and-mortar retailers embrace online retailing

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Managing Private Labels (1 of 3)
• Private label (also called a reseller, store, or house
brand)
– A proprietary brand that retailers and wholesalers
develop

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Managing Private Labels (2 of 3)
• Why private brands?
– More profitable
– Allow for
differentiation
• Private label v s
ersu

generic

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Managing Private Labels (3 of 3)
• Competing against or collaborate with private labels
– Fight selectivity
– Partner effectively
– Innovate brilliantly
– Create winning value propositions

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Wholesaling (1 of 2)
• Wholesaling
– Includes all the activities in selling goods or services
to those who buy for resale or business use

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Wholesaling (2 of 2)
• Merchant wholesalers
– Buy directly from the manufacturer, take title to the
merchandise they handle, store the product, and then
sell it to the customer
• Brokers and agents
– Do not take ownership of the goods they buy and sell

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Key Wholesaler Functions

• Provide access to • Transportation

individual retailers
• Financing
• Buying and
• Risk bearing
assortment building
• Market research
• Bulk branding
• Management services
• Warehousing
and counseling

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Discussion Questions (1 of 2)
• Discuss the growth of omnichannel retailing during 2020
and beyond.
– How did the pandemic change shopping dynamics?
How did retailers respond?
– What was the role of companies like UberEats in
facilitating the move toward omnichannel retailing?

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Discussion Questions (2 of 2)
• Shoppers at the REI flagship store in Seattle can
purchase coffee from a food van located inside the store,
read a book by the huge indoor fire place, and climb the
rock wall located near the entrance.
– What is REI trying to accomplish with this strategy?
– Consider store atmosphere as a differentiator in your
response.

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