1. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng MARKETING MANAGEMENT Chaudhry Muhammad Nadeem Faisal Cell: 0305-7761061 Email: faisal.uk@live.co.uk B-Email: info@littlemichael.co.uk Url: www.littlemichael.co.uk/faisal/index.htm BI: www.ayaantraders.com.bi/index.php

2. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics  Retailing  Wholesaling  Market Logistics

3. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Retailing

4. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Retailing Includes all the activities involved in selling goods or services directly to final customers for their personal, non business use. A retailer is any business enterprise whose sales volume comes primarily from retailing. Types of Retailing: Store Retailing: 8 categories 1.Specialty Stores: Carry a narrow product line with a deep assortment within the line. Ex: Athlete's Foot, Tall Men, The Limited. 2.Department Stores: Carry several product lines. Ex: Sears, J.C. Penney, Bloomingdale's. 3.Supermarkets: Relatively large, low-cost, low-margin, high-volume, self-service operations designed to serve the consumer's total needs for food, laundry, & household maintenance products. Ex: Kroger, Safeway, Food Lion.

5. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics 4.Convenience Stores: Relatively small stores located near residential areas, opened long hours seven days a week. Ex: 7-eleven 5.Discount Stores: Sell standard merchandise at lower prices by accepting lower margins & selling higher volumes. Ex: Wal-Mart, H.E.B., Kmart. 6.Off-Price Retailers: Buy at less than regular wholesale prices & charge consumers less than retail.  Factory outlets: Owned & operated by manufacturers & normally carry the manufacturer's surplus, discontinued or irregular goods. Ex: Ralph Lauren, Liz Claiborne.  Independent off-price retailers: Owned & run either by entrepreneurs or by division of larger retail corporations. Ex: TJX Cos.

6. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics  Warehouse clubs: Sell a limited number of brand-name grocery items, appliances, clothing, etc. at deep discounts.  Operate in huge, low-overhead, warehouse-like facilities. No credit cards. No deliveries. Ex: Sam's Club.  Superstores: 35,000 square feet selling space. Meets consumer's total needs. Ex: Petsmart, Home Depot, Staples.  Catalog Showrooms: Sell a broad selection of high- markup, fast-moving, brand-name goods at discount. Ex: Service Merchandise.

7. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Retail life cycle: emerges, grows, matures, declines Wheel-of-retailing hypothesis: New store types emerge to challenge old store types. New store types emerge to meet widely different consumer preferences for service levels & specific services. Retailers can position themselves as offering one of four levels of service: Self-service.  Self-selection. Customers can ask for assistance. Higher operating expenses than the previous one.  Limited-service. More sales assistance because customers need more info.  Full-service. Provides salespeople who are ready to assist in every phase of the locate-compare-select process.

8. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Non store Retailing: 4 major categories 1.Direct Selling: Oldest one. 3 types:  One-to-one selling: A salesperson visits & tries to sell products to a single potential user. Ex: Avon, Electrolux.  One-to-many: A salesperson goes to the house of a host who has some people in the house. Ex: Tupperware.  Multilevel: A variant of direct selling in which companies recruit independent businesspeople who act as distributors for their products. These distributors in turn recruit & sell to sub-distributors, who eventually recruit others to sell their products, usually in customer homes. Ex: Amway, NuSkin.

9. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics 2.Direct Marketing: Includes telemarketing, TV direct response marketing & electronic shopping. Ex: 1-800- FLOWERS, Home Shopping Network. 3.Automatic Vending: Vending machines offer 24 hour selling, self-service & unhandled merchandise. Ex: COKE, Pepsi. 4.Buying Service: A scoreless retailer serving specific clienteles- usually the employees of large organizations, such as schools, hospitals, unions, & government agencies. Ex: United Buying Service

10. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Retail Organizations Achieve many economies of scale, such as greater purchasing power, wider brand recognition, & better trained employees. The major types of retail organizations are: 1.Corporate Chain Stores: Two or more outlets that are commonly owned & controlled, employ central buying & merchandising, & sell similar lines of merchandise. Their size allows them to buy in large quantities. Ex: Tower Records, Pottery Barn. 2.Voluntary Chain: Wholesaler-sponsored group of independent retailers engaged in bulk buying & common merchandising. Ex: Independent Grocers Alliance. 3.Retailer Cooperative: Independent retailers who set up a central buying organization & conduct joint promotion efforts. Ex: Associated Grocers, ACE.

11. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics 4.Consumer Cooperative: A retail firm owned by its customers. Started by community residents. Ex: local consumer cooperatives. 5.Franchise Organization: Contractual association between a franchiser & franchisees. Normally based on some unique product, service or method of doing business. Prominent in fast foods, video stores, health/fitness centers, auto rentals. Ex: McDonald's, Pizza Hut, Taco Bell, Burger King. 6.Merchandising Conglomerate: A free-form corporation that combines several diversified retailing lines & forms under central ownership, along with some integration of their distribution-&-management function Ex: F.W. Woolworth, Kids Mart.

12. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Retailer Marketing Decisions 1.Target-market decision: A retailer's most important decision. Until the target is not defined, the retailer cannot make consistent decisions. Retailers should conduct periodic marketing research to ensure that they are reaching & satisfying their target customers. 2.Product Assortment-&-procurement decision: Must match the target market's shopping expectations. The retailer has to decide on product-assortment breadth & depth. Another product assortment dimension is the quality of the goods. The real challenge is to develop a product differentiation strategy:

13. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics  Feature some exclusive brands not available at competing retailers.  Feature mostly private branded merchandise.  Feature blockbuster distinctive merchandise events.  Feature surprise or ever-changing merchandise  Feature the latest or newest merchandise first.  Offer merchandise customizing services.  Offer a highly targeted assortment Once the retailer decides on the product-assortment strategy, the retailer must decide on procurement sources, policies, & practices. Retailers are rapidly improving their procurement skills. Stores are learning to measure direct product profitability, which enables them to measure a product's handling costs from the time it reaches their warehouse until a customer buys it & takes it out.

14. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics 3.Services-&- store- atmosphere decision: The services mix is one of the key tools for differentiating one store from another. The store's atmosphere is another element. Ex: Banana Republic stores work on the concept of retail theater. 4.Price Decision: Key positioning factor & must be decided in relation to the target market, the product-&-service- assortment & competition. Retailers must pay attention to pricing tactics. They will plan markdowns on slower- moving merchandise. A growing number of retailers have abandoned "sales pricing" in favor of everyday low pricing (EDLP). This could lead to lower advertising costs, greater pricing stability, a stronger store image of fairness & liability, & higher retail profits. 5.Promotion Decision: Use promotion tools that reinforce image position.

15. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics 6.Place Decision: Retailers have a choice of locating their stores in  Central business districts (downtown). Rents are high.  Regional shopping centers. Large suburban malls containing 40-200 stores. Malls are attractive because of generous parking, one-stop shopping, restaurants, & recreational facilities.  Community shopping centers. Smaller malls. Between 20-40 smaller stores.  Strip malls. Contain a cluster of stores, usually housed in one long building.  A location within a larger store. Certain well known retailers-McDonald's, Dunkin Donuts- are locating units in airports, schools, Wal-Marts.

16. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Retailers can assess a particular store's sales effectiveness by looking at four indicators:  Number of people passing by on an average day.  % who enter the store.  % of those entering who buy.  Average amount spent per sale. Trends in Retailing  Main developments that retailers need to take into account as they plan their competitive advantage: New Retail Forms constantly emerge to threaten established retail forms.  Shortening Retail Life Cycles. Retail forms are rapidly copied.  Nonstore Retailing due to electronic age.  Increasing Intertype Competition. Competition between store & nonstore retailers is common.

17. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics  Polarity of Retailing.  Giant Retailers are emerging.  Changing Definition of One-Stop Shopping. Now specialty stores within malls are becoming increasingly competitive with large department stores in offering one-stop shopping.  Growth of Vertical Marketing Systems.  Portfolio Approach. Retail organizations are increasingly designing & launching new store formats targeted to different lifestyle groups.  Growing Importance of Retail Technology.  Global Expansion of Major Retailers due to mature & saturated markets at home. Ex: The Gap, Burger King, Tony Romas.  Retail Stores as Community Centers or Hangouts. Establishments that provide a place for people to congregate (cafes, tea shops, book-shops, etc.).

18. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Wholesaling

19. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Wholesaling  All the activities involved in selling goods or services to those who buy for resale or business use. Excludes manufacturers, farmers & retailers.  They are also called distributors.  Pay less attention to promotion, atmosphere & location.  Transactions are larger than in retailing.  They are used whenever they perform one of the following more efficiently: selling & promoting, buying & assortment building, bulk breaking, warehousing, transportation, financing, risk bearing, market info & management services & counseling.

20. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Types of Wholesalers 1.Merchant wholesalers. Independently owned businesses that take title to the merchandise they handle. Two categories:  Full service wholesalers provide a full line of services. Two types:  wholesale sell primarily to retailers  industrial distributors sell to manufacturers.  Limited-service wholesalers offer fewer services than full-service wholesalers. Several types:  Cash & carry wholesalers. Limited line of fast moving goods. Sell to small retailers. Do not deliver.  Truck wholesalers. Limited line of semi- perishable products. Sell & deliver.

21. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics  Drop shippers. Operate in bulk industries. Do not carry inventory.  Rack jobbers. Serve grocery & drug retailers. Bill the retailers only for the goods sold to consumers.  Producers' cooperatives. Owned by farmer members & assemble farm produce to sell in local markets.  Mail-order wholesalers. Send catalogs. 2.Brokers & agents. Do not take title to goods & perform only a few functions  Brokers bring buyers & sellers together & assist in negotiation.

22. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics  Agents represent either buyers or sellers on a more permanent basis than brokers do. Several types:  Manufacturers' agents  Selling agents  Purchasing agents  Commission merchants 3.Manufacturers' & retailers' branches & offices. Branches & offices dedicated either to either sales or purchasing. 4.Miscellaneous Wholesalers. A few specialized types of wholesalers are found in certain sectors of the economy.

23. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Market Logistics

24. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Market Logistics Involves planning, implementing & controlling the physical flows of materials & final goods from points of origin to points of use to meet customer requirements at a profit. Info systems plays a critical role in managing market logistics. Involves several activities: sales forecasting, distribution, production & inventory levels. Decisions 1. Order processing: How should orders be handled? 2. Warehousing: Where should stocks be located? 3. Inventory: How much stock should be held? 4. Transportation: How should goods be shipped?

25. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics Thanks

26. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Managing Retailing, Wholesaling & Market logistics References  P. Kotler, Marketing Management, 13 th ed, Pearson, 2009.  2 Publication form business research council (for support)  http://www.mbaboost.com/content/54/