1. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Chapter 13: Retailers, Wholesalers, and Their Strategy Planning

2. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill When you finish this chapter, you should 13-2 Chapter 13 Objectives 1. Understand how retailers plan their marketing strategies. 2. Know about the many kinds of retailers that work with producers and wholesalers as members of channel systems. 3. Understand the differences among the conventional and nonconventional retailers—including Internet merchants and others who accept the mass-merchandising concept. 4. Understand scrambled merchandising and the “wheel of retailing.” 5. See why size or belonging to a chain can be important to a retailer. 6. Know what progressive wholesalers are doing to modernize their operations and marketing strategies. 7. Know the various kinds of merchant wholesalers and agent middlemen and the strategies that they use. 8. Understand why retailing and wholesaling have developed in different ways in different countries. 9. See why the Internet is impacting both retailing and wholesaling. 10. Understand the important new terms.

3. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Price Location Product Selection Special Services Helpful Salespeople Fairness in Dealing Key Economic Factors Affecting Consumers’ Retail Choice Retailing 13-3

4. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit 13-1 Conven- tional offerings Single- and limited- line stores Expanded assortment and service Specialty shops and department stores Expanded assortment and/or reduced margins/service Supermarkets, discount houses, mass-merchandisers, catalog showrooms, supercenters Added convenience higher margins less assortment Telephone/mail order, vending machines, door-to-door, convenience stores, electronic shopping Expanded assortment reduced margins more information Internet 13-4 Types of Retailers

5. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Retail Formats that Focus on Convenience Convenience (Food) Stores Door-to-Door Selling Telephone and Direct Mail Automatic Vending 13-5 Focusing on Convenience

6. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill 13-6 More Information Shopping Differences Still in Infancy Competition will bring Change Wide Assortment New Convenience Costs are Deceptive Retailing on the Internet

7. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Retail Chains Major Types of Retail Chains Corporate Chains Voluntary Chains Franchise Chains Cooperative Chains 13-7

8. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The New Face of Wholesaling New Strategies Needed to Survive Progress of Fail Producing Profits 13-8

9. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Types of Wholesalers Exhibit 13-6 13-9 Does wholesaler own the products? Limited-function merchant Wholesalers Service merchant wholesalers Agent middlemen How many functions does the wholesaler provide? All the functions Some functions Yes (merchant wholesaler)No (agent middleman)

10. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Types of Merchant Wholesalers Rack Jobbers General Merchandise Single- or General-Line Catalog Specialty Drop-Shippers Truck Cash-and-Carry 13-10 Types of Merchant Wholesalers

11. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Auction Companies Brokers Other types of Specialists Selling Agents Types of Agent Middlemen Manufacturers’ Agents 13-11 Types of Agent Middlemen

12. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Hypermarkets Convenience (Food) Stores Automatic Vending Door-to-Door Selling Telephone/Direct Mail Wheel of Retailing Scrambled Merchandising Corporate Chain Cooperative Chains Voluntary Chains Franchise Operation Retailing General Stores Single/Limited Line Stores Specialty Shop Department Stores Mass-Merchandising Concept Supermarkets Catalog Showrooms Discount Houses Mass-Merchandisers Supercenters More 13-12 Key Terms

13. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Drop-Shippers Truck Wholesalers Rack Jobbers Catalog Wholesalers Agent Middlemen Manufacturers’ Agent Brokers Export Import Selling Agents Combination Export Manager Auction Companies Wholesaling Wholesalers Manufacturers’ Sales Branches Merchant Wholesalers Service Wholesalers General Merchandise Wholesalers Single- or General-Line Wholesalers Specialty Wholesalers Limited-Function Wholesalers Cash-and-Carry Wholesalers 13-13 Key Terms