MARKETING MANAGEMENT 12th edition 16 Managing Retailing, Wholesaling, and Logistics Kotler Keller

Chapter Questions What major types of marketing intermediaries occupy this sector? What marketing decisions do these marketing intermediaries make? What are the major trends with marketing intermediaries?

Retailing Includes all the activities involved in selling goods or services directly to final consumers for personal, nonbusiness use.

Table 16.1 Major Retailer Types Specialty store Department store Supermarket Convenience store Discount store Off-price retailer Superstore Catalog showroom

Levels of Retail Service Self-service Self-selection Limited service Full service

Nonstore Retailing Direct selling Direct marketing Automatic vending Buying service

Major Types of Corporate Retail Organizations Corporate chain store Voluntary chain Retailer cooperative Consumer cooperative Franchise organization Merchandising conglomerate

Retailers’ Marketing Decisions Target market Product assortment Service/store atmosphere Price Communication Location

Retail Category Management Define the category Figure out its role Assess performance Set goals Choose the audience Figure out tactics Implement the plan

Retailer Services Mix Prepurchase services Postpurchase services Ancillary services

Location Decision General business districts Regional shopping centers Community shopping centers Strip malls Location within a larger store

Indicators of Sales Effectiveness Number of people passing by location Percentage who enter store Percentage of those who enter who also buy Average amount spent per sale

Trends in Retailing New retail forms and combinations Growth of intertype competition Competition between store-based and non-store-based retailing Growth of giant retailers Decline of middle market retailers Growing investment in technology Global presence of major retailers

Wholesaling Functions Selling and promoting Buying and assortment building Bulk breaking Warehousing Transportation Financing Risk bearing Market information Management services and counseling

Major Wholesaler Types Merchant Full service Limited service Brokers and agents Manufacturers Specialized

Wholesalers’ Marketing Decisions Target market Product assortment Price Promotion Place

Market Logistics Planning Deciding on the company’s value proposition to its customers Deciding on the best channel design and network strategy Developing operational excellence Implementing the solution

Market Logistics Decisions How should orders be handled? Where should stock be located? How much stock should be held? How should goods be shipped?

Transportation Factors Speed Frequency Dependability Capability Availability Traceability Cost

What is Retailing? Retailing includes all the activities involved in selling goods or services directly to final consumers for personal, non-business use A retailer or Retail store: is any business enterprise whose sales volume comes primarily from retailing Retail Life-cycle: Like products Retail-store pass through stages of growth and decline

Major Retailer Types Department store Superstore Supermarket Convenience store Off-price retailer Catalog showroom Specialty store Discount store

Retailers Level of Service Self–Service: customers carry out their own- locate, compare, and select process to save money Self-Selection: customers find their own goods, although they can ask for assistance Limited services: these retailers carry more shopping goods and services such as credit and merchandise return privilege. Customer need more assistance and information Full service: salespeople are ready to assist in every phase of the - locate, compare, and select process

Non-store Retailing Direct selling: companies selling door-to-door or at home sales parties, it can be: One-to-one One-to-many Multilevel marketing network Direct marketing: include telemarketing, television direct –response marketing , and electronic shopping

Non-store Retailing Automatic vending: vending machines are found in many places as: factories, offices, large retail store Japan has the most vending machines Buying service: is a store-less retailer serving a specific clientele “usually employees of large organization“ who are entitled to buy from a list of retailers that have agreed to give discounts in return for member ship

Major Types of Corporate Retail Organizations Corporate chain store: two or more out lets owned and controlled, employing central buying merchandise and selling similar lines of merchandise Voluntary chain: a wholesaler- sponsored group of independent retailers engaged in bulk buying and common merchandising

Major Types of Corporate Retail Organizations Retailer cooperative: Independent retailers using a central buying organization efforts Consumer cooperative: a retail firm owned by its customers. Members contribute money to open their own store , vote on its polices, elect a group to manage it, and receive dividends

Major Types of Corporate Retail Organizations Franchise organization: contractual association between a franchisor and franchisees Merchandising conglomerate: a corporate that combines several diversified retailing in lines and forms under central ownership

Franchising System Characteristics of Franchises A franchising system is a system of individual franchisees, a tightly knit group of enterprises whose systematic operations are planned, directed, and controlled by the operation’s franchisor. Characteristics of Franchises The franchisor owns a trade or service mark and licenses it to franchisees in return for royalty payments The franchisee pays for the right to be part of the system The franchisor provides its franchisees with a system for doing business

Changes in the Retail Environment New retail forms and combinations Growth of intertype competition Competition between store-based and non-store-based retailing Growth of giant retailers Decline of middle market retailers Growing investment in technology Global profile of major retailers

Retailers’ Marketing Decisions Target market Product assortment: Must match target market expectation Decide product assortment breadth and depth Procurement Prices: Must be decided in relation to the target market, the product assortment and the competition

Retailers’ Marketing Decisions Services: Pre-purchase services as advertising and accept telephone and mail orders Post-purchase services as gift wrapping and shipping and delivery Ancillary services as parking, general information and rest room Store atmosphere as walls, lighting, Product placement, and floor Store activities Communications tools as ads, run special sales, and issue money saving coupons

Retailers’ Marketing Decisions Location decision: Central business district “down town” Regional shopping centers Community shopping centers Shopping strips “cluster of stores” A location within a larger store

Retail Category Management Define the category Figure out its role Assess performance Set goals Choose the audience Figure out tactics Implement the plan

Tips for Increasing Sales in Retail Space Attract and Keep shoppers in the store Honor the transition zone Don’t make them hunt Make merchandise available to the reach and touch Note that men do not ask questions Remember women need space Make checkout easy

Indicators of Sales Effectiveness Number of people passing by Percent who enter store Percent who buy Average amount spent per sale

Private Label Brands A privatee- label brand( a reseller, store, house) is a brand that retailers and wholesalers develop Why do intermediaries bother to sponsor their own brands? They can be more profitable Retailers develop exclusive store to differentiate themselves from competitors Ex: Canadian company LOBLAW which start as local store brand and then become global

Wholesaling Wholesaling includes all the activities in selling goods or services to those who for resale or business use Ex:

Wholesaling Functions Selling and promoting Buying and assortment building Bulk breaking Warehousing Transportation Financing Risk bearing Market information Management services and counseling

Major Wholesaler Types Merchant Full-service Limited-service Brokers and agents Manufacturers Specialized

Market Logistics Market logistic includes planning the infrastructure to meet demand, then implementing and controlling the physical flow of materials and goods from points of origin to points of use to meet customer requirements at profit

Market Logistics Planning Deciding on the company’s value proposition to its customers Deciding on the best channel design and network strategy Developing operational excellence Implementing the solution

What are Integrated Logistics Systems? An integrated logistics system (ILS) includes materials management, material flow systems, and physical distribution, aided by information technology.

Market Logistics Activities In-plant warehousing Shipping-room processing Outbound transportation Field warehousing Customer delivery and servicing Sales forecasting Distribution scheduling Production plans Finished-goods inventory decisions Packaging

Market Logistics Decisions How should orders be handled?(Order processing) Where should stock be located?(Warehousing) How much stock should be held?(Inventory) How should goods be shipped?( Transportation)