1. Principles of Marketing13
Principles of Marketing
Retailing and Wholesaling

2. Retailers are businesses whose sales come primarily from retailing
Retailing includes all the activities in selling products or services directly to final consumers for their personal, non-business use
Retailers are businesses whose sales come primarily from retailing
13-4

3. Retailing
Non-store retailing includes selling to final consumers through:
Direct mail
Catalogs
Telephone
Internet
TV shopping
Home and office parties
Door-to-door sales
Vending machines
13-5

4. Classified in terms of: Amount of service Product lines Relative price
Retailing
Types of Retailers*
Classified in terms of:
Amount of service
Product lines
Relative price
13-6

5. Retailing* Types of Retailers Amount of service Self service
Limited service
Full service
13-7

6. Retailing
Self-service retailers serve customers who are willing to perform their own locate-compare-select process to save money
Wal-Mart
Supermarkets
13-8

7. Retailing
Limited service retailers provide more sales assistance because they carry more shopping goods about which customers need more information
Sears
JC Penney
13-9

8. Retailing
Full-service retailers assist customers in every phase of the shopping process, resulting in higher costs that are passed on to the customer as higher prices
Department stores - Nordstrom
Specialty stores
13-10

9. Department stores carry a wide variety of product lines
Retailing
Specialty stores carry narrow product lines with deep assortments within the product lines
Department stores carry a wide variety of product lines
Convenience stores carry a limited line of high-turnover convenience goods
13-11

10. Supercenters have very large combination food and discount stores
Retailing
Superstores offer a large assortment of routinely purchased food products, non food items, and services
Supercenters have very large combination food and discount stores
13-12

11. Retailing
Category killers are large stores that carry a very deep assortment of a particular line with a knowledgeable staff - Best Buy
13-13

12. Service retailers’ product lines are actually service
Retailing
Service retailers’ product lines are actually service
13-13

13. Office price retailers Factory outlets Warehouse clubs
Retailing*
Types of Retailers
Relative Prices
Discount stores
Office price retailers
Factory outlets
Warehouse clubs
13-14

14. Retailing
Discount stores sell standard merchandise at lower prices by accepting lower margins and selling higher volume
Off-price retailers buy at less than regular wholesale prices and charge customers less than retail
Independent off-price retailers either are owned and run by entrepreneurs or are divisions of larger retail corporations
13-15

15. Factory outlets are producer-operated stores Freeport ME
Retailing
Factory outlets are producer-operated stores
Freeport ME
13-16

16. Retailing
Warehouse clubs are large warehouse-like facilities with few frills and offer ultra-low prices - Costco in Canada
13-16

17. Organizational Approach
Retailing*
Types of Retailers
Organizational Approach
Corporate chain stores
Voluntary chain stores
Retailer cooperatives
Franchise organizations
Merchandising conglomerates
13-17

18. Organizational Approach
Retailing
Types of Retailers
Organizational Approach
Corporate chains are two or more outlets that are commonly owned and controlled
Size allows them to buy in large quantities at lower prices and gain promotional economies
Wal-mart
Family Mart
13-18

19. Organizational Approach
Retailing
Types of Retailers
Organizational Approach
Voluntary chains are wholesale-sponsored groups of independent retailers that engage in group buying and common merchandising
IGA Grocery Stores
13-19

20. Organizational Approach
Retailing
Types of Retailers
Organizational Approach
Retailer cooperative is a group of independent retailers that band together to set up a joint-owned, central wholesale operation and conduct joint merchandising and promotion effort
Ace Hardware
Co-op Grocers in Canada
13-20

21. Organizational Approach
Retailing
Types of Retailers
Organizational Approach
Franchise organizations are based on some unique product or service; on a method of doing business; or on the trade name or patent that the franchisor has developed
KFC
Holiday Inn
13-21

22. Retailing
Merchandising conglomerates are corporations that combine several retailing forms under central ownership
Limited Brands
13-22

23. Retailer Marketing Decisions
Retailing*
Retailer Marketing Decisions
Target market and positioning
Product assortment and services
Price
Promotion
Place
13-23

24. Retailer Marketing Decisions
Retailing
Retailer Marketing Decisions
Target market and positioning involves the definition and profile of the market so the other retail marketing decisions can be made
13-24

25. Retailer Marketing Decisions
Retailing*
Retailer Marketing Decisions
Product assortment and service decisions include:
Product assortment
Services mix
Store atmosphere
13-25

26. Retailer Marketing Decisions
Retailing
Retailer Marketing Decisions
Product assortment should differentiate the retailer while matching target shoppers’ expectations
Offers merchandise that no other competitor carries
Private or national brands
Merchandising events
Highly targeted product assortment
13-26

27. Retailer Marketing Decisions
Retailing
Retailer Marketing Decisions
Services mix should also serve to differentiate the retailer from the competition
Level of customer support
Store atmosphere is the physical layout that makes moving around the store hard or easy
13-27

28. Retailer Marketing Decisions
Retailing
Retailer Marketing Decisions
Price Decision
Price policy must fit the target market and positioning, product and service assortment, and competition
High markup on lower volume
Low markup on higher volume
13-28

29. Retailer Marketing Decisions
Retailing
Retailer Marketing Decisions
Price Decision
High-low pricing involves charging higher prices on an everyday basis, coupled with frequent sales and other price promotions to increase store traffic, clear out unsold merchandise, create a low price image, or attract customers who will buy other goods at full price
13-29

30. Retailer Marketing Decisions
Retailing
Retailer Marketing Decisions
Price Decision
Everyday low prices (EDLP) involves charging a constant, everyday low price with few sales or discounts
13-30

31. Retailer Marketing Decisions
Retailing
Retailer Marketing Decisions
Promotion Decision
Advertising
Personal selling
Sales promotion
Public relations
Direct marketing
13-31

32. Retailer Marketing Decisions
Retailing*
Retailer Marketing Decisions
Place Decision
Location
Accessibility
Consistent with positioning
13-32

33. Retailer Marketing Decisions
Retailing
Retailer Marketing Decisions
Place Decision
Central business districts are located in cities and include department and specialty stores, banks, and movie theaters
Shopping center is a group of retail businesses planned, developed, owned, and managed as a unit.
Regional shopping centers
Community shopping centers
Neighborhood shopping centers
Power centers
Lifestyle centers
13-33

34. The Future of Retailing
Retailers have to choose target segments carefully, position themselves strongly, and consider the following developments as they plan and execute their competitive strategies:
Non-store retailing
Retail convergence
Megaretailers
Retail technology
Global expansion
Retail stores as communities
13-34

35. The Future of Retailing New Retailing Forms and Shortening Life Cycles
Retail convergence involves the merging of consumers, producers, prices, and retailers, creating greater competition for retailers and greater difficulty differentiating offerings
13-37

36. The Future of Retailing New Retailing Forms and Shortening Life Cycles
The rise of megaretailers like Wal-mart involves the rise of mass merchandisers and specialty superstores, the formation of vertical marketing systems, and a rash of retail mergers and acquisitions
Superior information systems
Buying power
Large selection
13-38

37. The Future of Retailing New Retailing Forms and Shortening Life Cycles
Retail technology includes video-casts, inventory control, electronic ordering, transfer of information, scanning, online transaction processing, improved merchandise handling systems, and the ability to connect with customers
13-39

38. Wholesaling* Wholesaling
Wholesalers add value by performing channel functions
Selling and promoting
Buying assortment building
Bulk breaking
Warehousing
Transportation
Financing
Risk bearing
Market information
Management services and advice
13-40

39. Wholesaling Wholesaling
Selling and promoting involves the wholesaler’s sales force helping the manufacturer reach many smaller customers at lower cost
Buying and assortment building involves the selection of items and building of assortments needed by their customers, saving the customers work
13-41

40. Wholesaling Wholesaling
Bulk breaking involves the wholesaler buying in larger quantity and breaking into smaller lots for its customers
Warehousing involves the wholesaler holding inventory, reducing its customers’ inventory cost and risk
13-42

41. Wholesaling Wholesaling
Transportation involves the wholesaler providing quick delivery due to its proximity to the buyer
Financing involves the wholesaler providing credit and financing suppliers by ordering earlier and paying on time
13-43

42. Wholesaling Wholesaling
Risk bearing involves the wholesaler absorbing risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence
Market information involves the wholesaler providing information to suppliers and customers about competitors, new products, and price developments
13-44

43. Wholesaling Wholesaling
Management services and advice involves wholesalers helping retailers train their sales clerks, improve store layouts, and set up accounting and inventory control systems
13-45

44. Manufacturers’ sales branches and offices
Wholesaling*
Types of Wholesalers
Merchant wholesalers
Agents and brokers
Manufacturers’ sales branches and offices
13-46

45. Merchant wholesalers is the largest group of wholesalers and include:
Wholesaling
Types of Wholesalers
Merchant wholesalers is the largest group of wholesalers and include:
Full-service wholesalers who provide a full set of services
Limited-service wholesalers who provide few services and specialized functions
13-47

46. Brokers bring buyers and sellers together and assist in negotiations
Wholesaling
Types of Wholesalers
Brokers and agents do not take title, perform a few functions, and specialize by product line or customer type - FisherKing Seafoods
Brokers bring buyers and sellers together and assist in negotiations
Agents represent buyers or sellers
13-48

47. Wholesaling Types of Wholesalers
Manufacturers’ sales branches and offices is a form of wholesaling by sellers or buyers themselves rather than through independent wholesalers
13-49

48. Wholesaler Marketing Decisions
Wholesaling
Wholesaler Marketing Decisions
Target market and positioning decisions
Marketing mix decisions
13-50

49. Wholesaler Marketing Decisions
Wholesaling
Wholesaler Marketing Decisions
Target market and positioning decisions
Size of customer
Type of customer
Need for service
13-51

50. Wholesaler Marketing Decisions
Wholesaling
Wholesaler Marketing Decisions
Marketing mix decisions
Product
Price
Promotion
Place
13-52