1. Marketing: An Introduction Retailing and Wholesaling Chapter Twelve Lecture Slides –Express Version Course Professor Date

2. Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 12-2 Looking Ahead After studying this chapter you should be able to: 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. Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 12-3 Types of Retailers Amount of service –Self-service retailers –Limited-service retailers –Full-service retailers Product line –Specialty stores Narrow product line, deep assortment –Department stores Wide variety of product lines –Supermarkets Wide variety of food, laundry, household products –Convenience stores Limited line of high-turnover goods –Superstores Large assortment of food and non-food items

4. Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 12-4 Types of Retailers (continued) –Category killer Big box specialty store –Service retailers Provide services rather than tangible goods Relative prices –Discount stores –Off-price retailers Independents Factory outlets Warehouse clubs Retail organization –Corporate chains –Voluntary chain –Retailer cooperative –Franchise organizations –Merchandising conglomerates

5. Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 12-5 Franchising Systems Characteristics of a franchise system –The franchiser owns the trademark and licenses it for a fee to franchisees –The franchisee pays to belong to the system –The franchiser provides a packaged system for marketing and operations Pro: –Turn-key system for entrepreneur –National support for promotions –Rapid expansion for franchiser using other people’s money and risk –Recognized name equals instant business Con: –You get what you pay for –Owner has less freedom in decision making –Contracts can be one-sided and difficult to break

6. Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 12-6 Retailer Marketing Decisions Retailer Strategy Target market Retail store positioning Retailer marketing mix Product/service assortment Prices Promotion Place (location) Figure 12-1

7. Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 12-7 Future of Retailing Wheel of retailing concept –New retailers begin as low margin, low price –Become popular by offering alternative –Later evolve by adding service and better goods –Become the higher priced, higher margin retailers they first replaced Growth of non-store retailing –Direct mail –Catalogues –Telephone shopping –TV Shopping shows –E-commerce via the Internet –Home and office parties –Door-to-door personal selling Importance of technology

8. Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 12-8 Functions of Wholesalers Selling and promoting Buying and assortment building Bulk breaking Warehousing Transportation Financing Risk bearing Market information Management services and advice

9. Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 12-9 Types of Wholesalers Merchant wholesalers –Full-service wholesalers –Wholesale merchants –Industrial distributors –Limited-service wholesalers –Cash and carry wholesalers –Truck wholesalers (truck jobbers) –Drop shippers –Rack jobbers –Producers’ cooperatives –Mail-order wholesalers Agents and brokers –Brokers –Agents –Manufacturers’ agents continued

10. Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 12-10 Types of Wholesalers (continued) –Selling agents –Purchasing agents –Commission merchants Manufacturer’s sales branches & offices –Sales branches –Sales offices –Purchasing offices Wholesaler Strategy Target market Service positioning Wholesaler marketing mix Product/service assortment Prices Promotion Place (location ) Figure 12-2

11. Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 12-11 Looking Back Retailer and wholesaler roles in distribution channel Types of retailers Types of wholesalers Marketing decisions required by retailers and wholesalers