At the end of this presentation, you should be able to: 1.Understand how retailers plan their marketing strategies. 2.Know about the many kinds of retailers that work with producers and wholesalers as members of channel systems. 3.Understand the differences among the conventional and nonconventional retailers—including Internet merchants and others who accept the mass- merchandising concept. 4.Understand scrambled merchandising and the “wheel of retailing.” 5.See why size or belonging to a chain can be important to a retailer.
At the end of this presentation, you should be able to: 6.Know what progressive wholesalers are doing to modernize their operations and marketing strategies. 7.Know the various kinds of merchant and agent wholesalers and the strategies they use. 8.Understand why retailing and wholesaling have developed in different ways in different countries. 9.See why the Internet is impacting both retailing and wholesaling. 10.Understand important new terms.
Marketing Strategy Planning Process
Marketing Strategy Planning for Retailers and Wholesalers (Exhibit 13-1) CH 13: Retailers, Wholesalers & Their Strategy Planning Strategy planning for retailers CH 11: Place and Development of Channel Systems Nature of retailing Future of retailing and wholesaling CH 12: Distribution Customer Service & Logistics Strategy planning for wholesalers
Retailers and Wholesalers Plan Their Own Strategies Marketers Must Understand Retailer/ Wholesaler Evolution Retailing Deals with Final Customers Must Select Target Markets and Marketing Mixes Carefully
Planning a Retailer’s Strategy Convenience Product Selection Fairness in Dealings Helpful Information Prices Social Image Key Features Affecting Consumers’ Retail Choice Shopping Atmosphere
Conventional Retailers – Try to Avoid Price Competition (Exhibit 13-3) Conventional Offerings Single- & limited- line stores Expanded assortment &/or reduced margins & service Supermarkets, disc. houses, mass merch., super-, club- stores, + Safeway, IKEA, Home Depot, Costco Ritz Camera, Coach, Gap, Macy’s Expanded assortment & service Specialty shops & dept. stores
Checking Your Knowledge Parties R Us is a large store containing nothing but party supplies. The store carries everything from costumes to party favors, decorations to invitations, and paper plates to birthday candles. The selection is huge and prices are low. There is even a party consultant on hand to help plan parties. Parties R Us is a: A. department store. B. catalog retailer. C. category killer. D. convenience store.
Conventional Retailers – Try to Avoid Price Competition (Exhibit 13-3) Expanded assortment &/or reduced margins & service Supermarkets, disc. houses, mass merch., super-, club- stores, + Safeway, IKEA, Home Depot, Costco Added conv., higher margins, reduced assortment C-stores, vending, door- to-door, phone, mail, some e-tail 7-11, Pepsi vending, Avon, Lands’ End, QVC Expanded assortment, reduced margins, more information Internet eBay, Amazon, Zappos, Netflix, Dell Ritz Camera, Coach, Gap, Macy’s Conventional Offerings Single- & limited- line stores Expanded assortment & service Specialty shops & dept. stores
Retailing on the Internet Amount of Information New Meaning of Convenience Moving Information Moving Information Misleading costs? Internet Retailing
Four Online Retailer Approaches More efficient than competitors Complement their stores/catalogs Supplement their stores Supplement their stores Very focused on specific needs of target Four Online Retailer Approaches Four Online Retailer Approaches Integrate online Integrate online
Why Retailers Evolve and Change Product Life Cycle Applies to Retailing Scrambled Merchandising = Higher Profits Ethical Issues May Arise The “Wheel of Retailing” Keeps on Rolling! AND
Checking Your Knowledge Walgreen’s, CVS, and other “drugstores” have become scaled- down versions of mass-merchandisers by adding small appliances, housewares, food, and other items to their traditional lines. This type of “scrambled merchandising” is meant to deal with the increasing desire that consumers have for: A. personal service. B. convenience. C. low prices. D. prestigious brand names. E. quality.
Differences in Retailing in Different Nations New Ideas Spread Online Retailing Varies Must Adapt Marketing Strategies Mass-Marketing Requires Mass Markets
What Is a Wholesaler? Progressive Wholesalers Adapt Changing With the Times Producing Value and Profits, Not Chasing Orders Goodbye to Some? Ethical Issues? New Strategies Needed To Survive
Wholesalers Add Value in Different Ways (Exhibit 13-5)
Types of Wholesalers (Exhibit 13-6) Does wholesaler own the products? Does wholesaler own the products? Agent wholesalers Auction companies Brokers Manufacturers’ agents Selling agents Agent wholesalers Auction companies Brokers Manufacturers’ agents Selling agents No How many functions does the wholesaler perform? How many functions does the wholesaler perform? Yes( Merchant wholesalers) Service merchant wholesaler General merchandise wholesalers (or mill supply houses) Single-line or general-line wholesalers Specialty wholesalers Service merchant wholesaler General merchandise wholesalers (or mill supply houses) Single-line or general-line wholesalers Specialty wholesalers All functions Limited-function merchant wholesaler Cash-and-carry wholesaler Drop-shippers Truck wholesalers Rack jobbers Catalog wholesalers Limited-function merchant wholesaler Cash-and-carry wholesaler Drop-shippers Truck wholesalers Rack jobbers Catalog wholesalers Some functions
Types of Merchant Wholesalers Service Limited - Function Limited - Function General merchandise Single-line (or general-line) Specialty Cash-and- Carry Drop-Shippers Truck Rack Jobbers Catalog
Agents Are Strong on Selling Manufacturer’s Agents Manufacturer’s Agents Brokers Selling Agents Auction Companies Types of Agent Wholesalers
Checking Your Knowledge Atlantic Music distributes various types of musical instruments, sheet music, and accessories that are sold through independent music stores. It carries many different brands, such as Remo and Ludwig drums, and brass instruments from Yamaha, Hohner, and other manufacturers. Atlantic takes title to the musical instruments and supplies it resells, and provides a wide variety of services to its customers. Atlantic Music is a(n): A. merchant wholesaler. B. limited service merchant wholesaler. C. auction company. D. manufacturer’s broker. E. intermediary.
What Will Happen to Retailers and Wholesalers in the Future? Improved Logistics Efficiency Improved Logistics Efficiency Development of Specialized Intermediaries New Web- Based Retailers Increasing Competition Marketers and Consumers Can Expect
"Soak" is a retailer with two locations in a major metropolitan area, both of which are in large, popular shopping centers. It carries a unique assortment of high-quality shower and bath products, such as soaps, bubble bath, and bath oils. One of its most popular products is a "bath bomb"—a round ball that fizzes and releases aromatic bath oils when placed in a bathtub filled with warm water. The small staff at the store is very knowledgeable about the store's products and provides a high level of customer service. "Soak" would be classified as a: A. Convenience store. B. Department store. C. Discount house. D. Specialty shop. E. General store. Study Question 1
The ____________ says that retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets. A. Wheel of retailing theory B. Production concept C. Mass-merchandising concept D. Sales concept E. Primary industry theory Study Question 2
A new grocery store features a bank, a pharmacy, a flower shop, a full-service bakery, a café, photo processing, and equipment rentals, in addition to its normal grocery product lines. The store is engaging in: A. The wheel of retailing. B. Retailing strategy. C. Scrambled merchandising. D. The retail life cycle. E. Merchandising strategy. Study Question 3
Wholesalers: A. Have had to deal with a competitive threat posed by large retailers that have taken over wholesale functions. B. Do not use e-commerce to serve customers. C. Face competitive pressure from shipping companies such as FedEx and UPS that make it easier for producers to ship directly to customers. D. All of the above. E. A and C only. Study Question 4
Capitol Periodical Distributors is a wholesaler providing assistance to retailers that want to carry books and magazines. A retailer provides Capitol with a certain amount of floor space, and Capitol uses the space to install display racks. Capitol fills the racks with magazines and books that would be suitable for the retailer's target market. Every week a representative from Capitol comes in to remove any outdated publications and refill the racks. This practice helps the retailer serve its customers better than if the retailer tried to manage the books and magazines itself. Capitol Periodical Distributors is a: A. Specialty wholesaler. B. Drop-shipper. C. Catalog wholesaler. D. Rack jobber. E. Cash-and-carry wholesaler. Study Question 5