©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 0 in Chapter 15 Chapter 15 Managing Retailing, Wholesaling, and Market Logistics PowerPoint by Karen E. James Louisiana State University - Shreveport

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 1 in Chapter 15 Objectives  Determine the types of organizations in this sector.  Learn what marketing decisions organizations in this sector make.  Understand the major trends in this sector.

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 2 in Chapter 15 Retailing Retailing Basics  Types of retailers  Marketing decisions  Retailing trends  Retail life cycle  Wheel-of-retailing  Service levels  Retail positioning strategies  Nonstore retailing  Corporate retailing

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 3 in Chapter 15 Retailing  Specialty store  Department store  Supermarket  Discount store  Convenience store  Off-price retailer  Superstore Major Store Retailer Types

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 4 in Chapter 15 Retailing  Retail-store types pass through the retail life cycle.  The wheel-of-retailing describes how new store types emerge.  Retailers can offer one of four levels of service: –Self-service, self-selection, limited service, and full service

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 5 in Chapter 15 Retailing  Four broad retail positioning strategies include: –Bloomingdale’s –Tiffany –Sunglass Hut –Wal-Mart  Non-store retailing has been growing faster than store retailing

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 6 in Chapter 15 Retailing  Corporate chain store  Voluntary chain  Retailer cooperative  Consumer cooperative  Franchise organization  Merchandising conglomerate Major Types of Retail Organizations

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 7 in Chapter 15 Retailing Retailing Basics  Types of retailers  Marketing decisions  Retailing trends  Target market  Product assortment and placement  Services mix and store atmosphere  Price  Promotion  Place

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 8 in Chapter 15 Retailing  General business district  Regional shopping center  Community shopping center  Strip mall (shopping strip)  Location within a larger store or operation Location Options for Retailers

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 9 in Chapter 15 Retailing Retailing Basics  Types of retailers  Marketing decisions  Retailing trends  New retail forms  Intertype competition  Growth of giant retailers  Technology  Global expansion  Selling experiences  Competition between store-based and non- store-based retailing

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 10 in Chapter 15 Wholesaling Wholesaling  Wholesaling basics  Types of wholesalers  Marketing decisions  Wholesaling trends  Wholesaling excludes manufacturers, farmers, and retailers  Wholesalers differ from retailers in three key ways  Wholesalers handle many functions more efficiently than do manufacturers

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 11 in Chapter 15 Wholesaling  Selling and promoting  Buying and assortment building  Bulk breaking  Warehousing  Transportation  Financing  Risk bearing  Market information Wholesaler Functions

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 12 in Chapter 15 Wholesaling Wholesaling  Wholesaling basics  Growth and types of wholesalers  Marketing decisions  Wholesaling trends  Wholesalers vary in type and function  Wholesaling has been growing due to two key factors: –Many factories are located far from buyers –An increasing need to adapt product quantities, features, or packages to meet buyer needs

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 13 in Chapter 15 Wholesaling  Merchant wholesalers  Full-service wholesalers  Limited-service wholesalers  Brokers & agents  Brokers  Agents  Manufacturers’ and retailers’ branches and offices  Miscellaneous wholesalers Major Wholesaler Types

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 14 in Chapter 15 Wholesaling Wholesaling  Wholesaling basics  Types of wholesalers  Marketing decisions  Wholesaling trends  Target market  Product assortment and placement  Price  Promotion  Place

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 15 in Chapter 15 Wholesaling Wholesaling  Wholesaling basics  Types of wholesalers  Marketing decisions  Wholesaling trends  Direct buying trends initially threatened wholesalers  Wholesalers have adapted by: –Adding value –Reducing costs –Strengthening relationships with manufacturers

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 16 in Chapter 15 Market Logistics  Interrelated Aspects Associated with Market Logistics: –Physical distribution –Supply chain management (SCM) –Value network –Demand chain planning –Market logistics –Integrated logistics systems (ILS)

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 17 in Chapter 15 Market Logistics Key Elements  Market-logistics objectives  Market-logistics decisions  Market logistics lessons  Logistics involve trade- offs between costs and customer service  Maximizing profits, not sales, is key  A total system basis should be considered  Designing a system that will minimize the cost of achieving objectives should be the outcome

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 18 in Chapter 15 Market Logistics M = T + FW + VW + S Where... M = total market-logistics cost of proposed system; T = total freight cost of proposed system; FW = total fixed warehouse cost of proposed system; VW = total variable warehouse cost of proposed system S = total cost of lost sales due to average delivery delay Calculating the Cost of Market-Logistics Systems

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 19 in Chapter 15 Market Logistics Key Elements  Market-logistics objectives  Market-logistics decisions  Market logistics lessons  Order processing  Warehousing –Storage, distribution, automated warehouses  Inventory –Determine reorder point, relevant cost comparison, optimal order quantity  Transportation –Containerization –Private vs. contract carriers

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 20 in Chapter 15 Market Logistics Key Elements  Market-logistics objectives  Market-logistics decisions  Market logistics lessons  A senior V.P. is needed as the single contact point for all logistical elements  Senior V.P. must maintain close control  Software and systems are essential for competitively superior logistics performance