Presentation on theme: "Chapter 1 Retailing and Wholesaling"— Presentation transcript:
1 Chapter 1 Retailing and Wholesaling 11Retailing and Wholesaling
2 ROAD MAP: Previewing the Concepts Explain the roles of retailers and wholesalers in the distribution channel.Describe the major types of retailers and give examples of each.Identify the major types of wholesalers and give examples of each.Explain the marketing decisions facing retailers and wholesalers.
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.
4 Types of Retailers Retailers are classified based on: Amount of Service They OfferBreadth & Depth of Product LinesRelative Prices ChargedHow They Are Organized
5 Amount of Service Self-Service Retailers: Limited-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.”
6 Product Line Classification Specialty Stores:Carry narrow product lines with deep assortmentswithin those lines.Department Stores:Carry a wide variety of product lines—typicallyclothing, home furnishings, and household goods.Each line is operated as a separate departmentmanaged by specialist buyers or merchandisers.
7 Product Line Classification Supermarket:Large, low-cost, low-margin, high-volume,self-service store that carries a wide variety of food,laundry, and household products.Convenience Stores:Small stores located near residential areas thatare open long hours 7 days a week and carrya limited line of high-turnover convenience goods.
8 Web-Based Supermarket In the battle for “share of stomachs,” Safeway and many large supermarkets have added Web-based sales.
9 Product Line Classification Superstores:Much larger than regular supermarkets andoffer a large assortment of routinely purchasedfood products, nonfood items, and services.Category Killers:Giant specialty stores that carry a very deepassortment of a particular line and is staffedby knowledgeable employees.
10 Chapter 1Discussion QuestionWhat type of impact did the emergence of category killers have on department stores?
11 Relative Prices Classification Discount Store:A retail institution that sells standard merchandiseat lower prices by accepting lower margins andselling at higher volume.Off-Price Retailer:Retailer that buys at less-than-regular wholesaleprices and sells at less than retail. Examples arefactory outlets, independents, and warehouseclubs.
12 Relative Prices Classification Factory Outlet:Off-price retailing operation that is owned andoperated by a manufacturer and that normallycarries the manufacturer’s surplus, discontinued,or irregular goods.Independent Off-Price Retailer:Off-price retailer that is either owned and run byentrepreneurs or is a division of a larger retailoperation.
13 Factory OutletsFactory outlet malls and value-retail centers have blossomed in recent years, making them one of retailing’s hottest growth areas.
14 Relative Prices Classification Warehouse Club:Off-price retailer that sells a limited selection ofbrand-name grocery items, appliances, clothing,and a hodgepodge of other goods at deepdiscounts to members who pay annualmembership fees.Click Here to Visit Sam's Club
15 Organizational Classification Chain Stores:Two or more outlets that are owned and controlled,have central buying and merchandising, and sellsimilar lines of merchandise.Voluntary Chain:A wholesaler-sponsored group of independentretailers that engages in bulk buying and commonmerchandising.
16 Organizational Classification Retailer Cooperative:A group of independent retailers that bandstogether to set up a jointly owned, centralwholesale operation and conducts jointmerchandising and promotion efforts.Franchise:A contractual association between a manufacturer,wholesaler, or service organization (a franchiser)and independent businesspeople (franchisees) whobuy the right to own and operate one or moreunits in the franchise system.
17 FranchisingFranchisees now command 35% of all retail sales in the U.S. Subway is one of the fastest growing franchises, with nearly 20,000 shops in 74 countries.
18 Organizational Classification Merchandising Conglomerates:A free-form corporation that combines severaldiversified retailing lines and forms under centralownership, along with some integration of theirdistribution and management functions.
20 Assortment and Services Decisions Product Assortment:Brand of merchandiseMerchandising eventsServices Mix:Different numbers and types ofservices are key to non-price storedifferentiationStore Atmosphere:Physical layout and “feel” of the store
21 Price, Promotion, & Place Decisions Price policy must fit its target market and positioning,product and service assortment, and competitionCan use any or all of the promotion tools—advertising,personal selling, sales promotion, public relations,and direct marketing—to reach consumersRetailers can locate in CBDs, various types ofshopping centers, strip malls, or power centersLocation, Location, Location!
22 Mall of America Click Here to Visit the Mall of America Chapter 1Mall of AmericaThe Mall of America “megamall” contains:Over 520 specialty stores49 restaurants7-acre indoor theme parkUnderwater World featuring hundreds of marine specimensA two-story miniature golf course.Click Here to Visit the Mall of America
23 The Future of Retailing Chapter 1The Future of RetailingNew Retail Forms and Shortening Retail Life CyclesGrowth of Nonstore RetailingRetail ConvergenceRise of the MegaretailersGrowing Importance of Retail TechnologyGlobal Expansion of Major RetailersRetail Stores as “Communities” or “Hangouts”
24 WholesalingWholesaling includes all activities involved in selling goods and services to those buying for resale or business use.
26 Types of Wholesalers Merchant Wholesalers Largest group of wholesalers Account for 50% of wholesalingTwo broad categories:Full-service wholesalersLimited-service wholesalers
27 Types of Wholesalers Brokers and Agents Do not take title to goods Perform fewer functionsBrokers bring buyers and sellers togetherAgents represent buyers on more permanent basisManufacturers’ agents are most common type of agent wholesaler
28 Types of Wholesalers Manufacturers’ Sales Branches and Offices Wholesaling by sellers or buyers themselves rather than through independent wholesalers.
29 Wholesaling In ActionGrainger is by far the world’s leading wholesaler of maintenance, repair, and operating supplies.Click Here to Explore Grainger's Website
31 Must Constantly Improve Services and Reduce Costs Distinction Between Large Retailers & Wholesalers is BlurryChapter 1Trends in WholesalingWill Continue to Increase the Services Provided to RetailersWholesalers Are Now Going Global
32 Rest Stop: Reviewing the Concepts Chapter 1Rest Stop: Reviewing the ConceptsExplain the roles of retailers and wholesalers in the distribution channel.Describe the major types of retailers and give examples of each.Identify the major types of wholesalers and give examples of each.Explain the marketing decisions facing retailers and wholesalers.