0. Retailing and Wholesaling
Chapter 14

1. Objectives
Understand the roles of retailers and wholesalers in the marketing channel.
Know the major types of retailers.
Know the major types of wholesalers.
Understand the marketing decisions facing retailers and wholesalers.

2. Home Depot c Huge product assortment
Prices are 20%–30% below hardware stores
Obsessed with offering high quality customer service
Lifetime value of customers: $25,000
Well-trained, highly motivated salespeople earn above average salaries
Customer problem-solving is encouraged
Internet site offers many home improvement tips
One of today’s most successful retailers

3. Definitions Retailing
All activities involved in selling goods or services directly to final consumers for their personal, nonbusiness use.

4. Definitions
Retailer
Business whose sales come primarily from retailing.
Can be brick and mortar, 100% virtual, or click and mortar

5. ZanyBrainy.com Video Clip
BusinessNow
ZanyBrainy.com Video Clip
ZanyBrainy.com is a click and mortar toy retailer.
Click the picture above to play video

6. Discussion Question
How is web retailing different? In your opinion, what “works on the web” that won’t work in a typical store?

7. Retailers Types of Retailers Specialty Stores Department Stores
Supermarkets
Discount Stores
Convenience Stores
Off-Price Retailers
Superstores

8. Retailers are Classified by:
Retailing
Retailers are Classified by:
Self-service retailers
Customers are willing to self-serve to save money
Discount stores
Limited-service retailers
Most department stores
Full-service retailers
Salespeople assist customers in every way
High-end department stores
Specialty stores
Amount of service
Product lines
Relative prices
Organizational approach

9. Retailers are Classified by:
Retailing
Retailers are Classified by:
Specialty stores
Narrow product lines with deep assortments
Department stores
Wide variety of product lines
Supermarkets
Convenience stores
Limited line
Superstores
Sell food, nonfood, and services
Category killers
Giant specialty stores
Amount of service
Product lines
Relative prices
Organizational approach

10. Outlet malls and category complete are popular with consumers

11. Retailers are Classified by:
Retailing
Retailers are Classified by:
Discount stores
Low margins are offset by high volume
Off-price retailers
Independent off-price retailers
TJ Maxx, Marshall’s
Factory outlets
Levi Strauss, Reebok
Warehouse clubs
Sam’s Club, Costco
Amount of service
Product lines
Relative prices
Organizational approach

12. Retailers are Classified by:
Retailing
Retailers are Classified by:
Corporate chain stores
Commonly owned/controlled
Voluntary chains
Wholesaler-sponsored groups of independent retailers
Retailer cooperatives
Groups of independent retailers who buy in bulk
Franchise organizations
Based on uniqueness
Merchandising conglomerates
Diversified retailing lines under central ownership
Amount of service
Product lines
Relative prices
Organizational approach

13. Retailer Marketing Mix Decisions
Figure 14-1:
Retailer Marketing Mix Decisions

14. Discussion Question
The product assortment, the services mix, and the store atmosphere are used by retailers to differentiate their business from the competition.
Select two retailers from your local area and discuss how each store differs with respect to the three variables above.

15. Retailing Retailer Marketing Mix Price Promotion Place
High markup or high volume?
Promotion
Public relations, sales promotions, advertising, direct marketing
Place
Location, location, location!

16. Retailing The Future of Retailing
New retail forms and shortening retail life cycles
Wheel-of-retailing concept
Growth of nonstore retailing
Mail-order, television, phone, online shopping
Retail convergence

17. Retailing The Future of Retailing Continued Rise of megaretailers
Growing importance of retail technology
Global expansion of major retailers
Retail stores as “Communities” or “Hangouts”

18. Mall of America hosts over 520 specialty stores, 49 restaurants, and a theme park

19. Retailing Retailer Communities: Check out Playstation.com

20. Definitions Wholesaling
All activities involved in selling goods and services to those buying for resale or business use.
A firm engaged primarily in wholesaling activity.

21. Wholesaling
Wholesalers add value by performing the following functions:
Selling and promoting
Buying and assortment building
Bulk-breaking
Warehousing
Transportation

22. Wholesaling
Wholesalers add value by performing the following functions:
Financing
Risk bearing
Marketing information
Management services and advice

23. Wholesaling Types of Wholesalers Merchant Wholesalers
Full-service wholesalers
Wholesale merchants
Industrial distributors
Limited service wholesalers
Cash-and-carry wholesalers
Truck wholesalers (jobbers)
Drop shippers
Rack jobbers
Producer’s cooperatives
Mail-order wholesalers
Merchant Wholesalers
Brokers and Agents
Manufacturers’ and retailers’ branches and offices

24. Wholesaling Types of Wholesalers Brokers Agents Merchant Wholesalers
Bring buyers and sellers together and assist in negotiation
Agents
Manufacturers’ agents
Selling agents
Purchasing agents
Commission merchants
Merchant Wholesalers
Brokers and Agents
Manufacturers’ and retailers’ branches and offices

25. Wholesaling Types of Wholesalers Merchant Wholesalers
Sales branches and offices
Branches carry inventory: lumber, auto equipment, parts
Offices do not carry inventory: dry goods
Purchasing officers
Perform roles similar to brokers and agents, however these individuals are employees of the organization
Merchant Wholesalers
Brokers and Agents
Manufacturers’ and retailers’ branches and offices

26. Wholesaler Marketing Mix Decisions
Figure 14-2:
Wholesaler Marketing Mix Decisions

27. Wholesaling Wholesaler Marketing Decisions
Targeting may be made on the basis of:
Size of customer
Type of retailer
Need for service
Positioning

28. Wholesaling Wholesaler Marketing Decisions Marketing mix decisions
Product and service assortment: inventory, line
Pricing: usual markup on COG is 20%
Promotion: largely disorganized and unplanned
Place: location, facilities

29. Wholesaling Trends in Wholesaling Price competition is still intense
Successful wholesalers must add value by increasing efficiency and effectiveness
The distinction between large retailers and wholesalers continues to blur

30. Wholesaling More Trends in Wholesaling
More services will be provided to retailers
Many wholesalers are going global
Wholesaler McKesson offers pharmacists a wide range of online resources