MGT301 Principles of Marketing Lecture-30

Summary of Lecture-29

Producer End users Interme- diaries Interme- diaries Producer Marketing activities Demand Push Strategy Pull Strategy Marketing activities Demand

Marketing Logistics and Supply Chain Management

Functions of Logistics Systems

Inventory When to order How much to order Just-in-time Inventory When to order How much to order Just-in-time Costs Minimize Costs of Attaining Logistics Objectives Costs Minimize Costs of Attaining Logistics Objectives Warehousing Storage Distribution Warehousing Storage Distribution Order Processing Submitted Processed Shipped Order Processing Submitted Processed Shipped Logistics Functions Transportation Water, Truck, Rail, Pipeline & Air

Today’s Topics Retailing and Wholesaling Retailing

Retailing is the process by which goods and services are sold to consumers for their personal use.

Retailers provide many benefits such as: providing an assortment of merchandise under one roof, allowing access to goods customers might never see, providing interesting environments in which to spend our leisure time.

Retailing can be done in stores (store retailing) or out of a store (nonstore retailing) such as:  Direct mail,  Catalogs,  Telephone,  Home shopping shows,  Internet.

“...all activities involved in selling, renting, and providing goods and services to ultimate consumers for personal, family or household use.” -Berkowitz et al

Classification of Retailing

Amount of Service Self-Service, Limited-Service and Full-Service Retailer Amount of Service Self-Service, Limited-Service and Full-Service Retailer Product Line Length and Breadth of the Product Assortment Product Line Length and Breadth of the Product Assortment Relative Prices Pricing Structure that is Used by the Retailer Relative Prices Pricing Structure that is Used by the Retailer Retail Organizations Independent, Corporate, or Contractual Ownership Organization

Self-Service Retailer Provide Few or No Services to Shoppers Limited-Service Retailers Provide Only a Limited Number of Services to Shoppers Full-Service Retailers Retailers that Provide a Full Range of Services to Shoppers Amount of Service

Specialty Stores Department Stores Supermarkets Convenience Stores Superstores Discount Stores Narrow Product Line, Deep Assortment Wide Variety of Product Lines i.e. Clothing, Home Furnishings Wide Variety of Food, Laundry, & Household Products Limited Line of High-Turnover Convenience Goods Large Assortment of Routinely Purchased Food & Nonfood Products Standard Merchandise at Lower Prices Off-Price Retailers Changing Collection of Higher-Quality Goods at a Reduced Price Warehouse Clubs Limited Selection of Brand-Name Grocery Items, Appliances Product Line

Discount Stores Discount Stores “Off-Priced” Retailers “Off-Priced” Retailers Catalog Showrooms Catalog Showrooms Relative Prices

Corporate Chains Retailers wanting economies of scale Retailers wanting economies of scale Retail Organization

Corporate Chains Franchise Operation s Retailers wanting economies of scale Retailers wanting economies of scale

Corporate Chains Franchise Operations Voluntary Chains Cooperative Chains Retailers wanting economies of scale Retailers wanting economies of scale

Young Store Young Store Brand New Store High Margin High Price High Status Low Margin Low Price Low Status Older Store The Wheel of Retailing

Nonstore Retailing

Mail Order Catalogs - from clothing to computers Direct Mail - brochure offering a product or service at one point in time. Mail Order Catalogs - from clothing to computers Direct Mail - brochure offering a product or service at one point in time. Direct Selling Door-to-Door Sales - declining in U.S. Parties & Networks - presentations Telemarketing - over the phone Direct Selling Door-to-Door Sales - declining in U.S. Parties & Networks - presentations Telemarketing - over the phone Automatic Vending Best suited to inexpensive merchandise and food and beverages. Automatic Vending Best suited to inexpensive merchandise and food and beverages. Direct Response Television Home Shopping Networks - TV channels that sell products Direct Response Television Home Shopping Networks - TV channels that sell products

Retailer’s Product Assortment and Services Decisions

Product Assortment Decisions Width and Depth of Assortment Quality of Products Product Differentiation Strategies Product Assortment Decisions Width and Depth of Assortment Quality of Products Product Differentiation Strategies Services Mix Key Tool of Nonprice Competition for Setting One Store Apart From Another. Services Mix Key Tool of Nonprice Competition for Setting One Store Apart From Another. Store’s Atmosphere Physical Layout “Feel” That Suits the Target Market and Moves Customers to Buy Store’s Atmosphere Physical Layout “Feel” That Suits the Target Market and Moves Customers to Buy

Factors Influencing Store Atmosphere

Employee Type and Density Merchandise Type and Density Fixture Type and Density Sound Odors Visual Factors Most Influential Factors on Store Atmosphere Most Influential Factors on Store Atmosphere

Retailer Marketing Decisions

Retailer Marketing Mix Retailer Marketing Mix Retailer Strategy Target Market Retail Store Positioning Product and Service Assortment Prices Promotion Place (Location)

 Location  Product Assortment  Customer Service  Atmospherics  Pricing  Promotion Strategic Issues in Retailing

Wholesaling What is Wholesaling?

 All the activities involved in selling goods and services to those buying for resale or business use.  Wholesaler - those firms engaged primarily in wholesaling activity.

 Buying  Selling  Storing  Transporting  Providing Makret Information  Financing  Risk Taking Services Provided by Wholesaling Intermediaries

Customer Expectations for Wholesaling

Suppliers’ Logistics Systems Accuracy Easy Inquiry and Order Easy Inquiry and Order Reliable Delivery On-time Delivery On-time Delivery Error-Free Invoicing Error-Free Invoicing Post-Sales Support Post-Sales Support Easy Claims Handling Easy Claims Handling

Types of Wholesalers

Merchant Wholesaler Independently Owned Business that Takes Title to the Merchandise it Handles. Merchant Wholesaler Independently Owned Business that Takes Title to the Merchandise it Handles. Manufacturers’ Sales Branches and Offices Wholesaling by Sellers or Buyers Themselves Rather Than Through Independent Wholesalers. Manufacturers’ Sales Branches and Offices Wholesaling by Sellers or Buyers Themselves Rather Than Through Independent Wholesalers. Brokers/ Agents They Don’t Take Title to the Goods, and They Perform Only a Few Functions. Brokers/ Agents They Don’t Take Title to the Goods, and They Perform Only a Few Functions.

Wholesaler Marketing Decisions

Wholesaler Marketing Mix Wholesaler Marketing Mix Wholesaler Strategy Target Market Retail Store Positioning Product and Service Assortment Prices Promotion Place (Location)

Compete on value (not just price.) Save customers time and energy. Make shopping fun. So….

End of Place part…..

Enough for today...

Summary Retailing and Wholesaling Classification of Retailing

Amount of Service Self-Service, Limited-Service and Full-Service Retailer Amount of Service Self-Service, Limited-Service and Full-Service Retailer Product Line Length and Breadth of the Product Assortment Product Line Length and Breadth of the Product Assortment Relative Prices Pricing Structure that is Used by the Retailer Relative Prices Pricing Structure that is Used by the Retailer Retail Organizations Independent, Corporate, or Contractual Ownership Organization

Nonstore Retailing

Mail Order Catalogs - from clothing to computers Direct Mail - brochure offering a product or service at one point in time. Mail Order Catalogs - from clothing to computers Direct Mail - brochure offering a product or service at one point in time. Direct Selling Door-to-Door Sales - declining in U.S. Parties & Networks - presentations Telemarketing - over the phone Direct Selling Door-to-Door Sales - declining in U.S. Parties & Networks - presentations Telemarketing - over the phone Automatic Vending Best suited to inexpensive merchandise and food and beverages. Automatic Vending Best suited to inexpensive merchandise and food and beverages. Direct Response Television Home Shopping Networks - TV channels that sell products Direct Response Television Home Shopping Networks - TV channels that sell products

Wholesaling Types of Wholesalers

Merchant Wholesaler Independently Owned Business that Takes Title to the Merchandise it Handles. Merchant Wholesaler Independently Owned Business that Takes Title to the Merchandise it Handles. Manufacturers’ Sales Branches and Offices Wholesaling by Sellers or Buyers Themselves Rather Than Through Independent Wholesalers. Manufacturers’ Sales Branches and Offices Wholesaling by Sellers or Buyers Themselves Rather Than Through Independent Wholesalers. Brokers/ Agents They Don’t Take Title to the Goods, and They Perform Only a Few Functions. Brokers/ Agents They Don’t Take Title to the Goods, and They Perform Only a Few Functions.

Next…. Review 3rd P (Place)

MGT301 Principles of Marketing Lecture-30