Presentation on theme: "Retailing and Wholesaling"— Presentation transcript:
1 Retailing and Wholesaling Chapter 12Retailing and Wholesaling
2 Road Map: Previewing the Concepts Explain the roles of retailers and wholesalers in the distribution channel.Describe the major types of retailers and give examples of each.Identify the major types of wholesalers and give examples of each.Explain the marketing decisions facing retailers and wholesalers.
3 What is Retailing? Retailing Includes all the Activities Involved in Selling Goods or Services Directly to Final Consumers for Their Personal, Nonbusiness Use.
4 RetailingRetailing can be done in stores (store retailing) or out of a store (nonstore retailing) such as:Direct mail,Catalogs,Telephone,Home shopping shows,Internet.
5 Classification of Retailing Amount of ServiceSelf-Service, Limited-Service andFull-Service RetailerClassification of RetailingProduct LineLength and Breadth of the ProductAssortmentRelative PricesPricing Structure that is Usedby the RetailerRetail OrganizationsIndependent, Corporate, or ContractualOwnership Organization
6 Classification of Retailing: Amount of Service Self-ServiceRetailersProvide Few or NoServices toShoppersi.e. Best BuyLimited-ServiceRetailersProvide Only a LimitedNumber of Servicesto Shoppersi.e. SearsFull-ServiceRetailersRetailers that Provide aFull Range of Servicesto Shoppersi.e. Neiman Marcus
7 Classification of Retailing: Product Line (Tab. 12-1) Store DescriptionSpecialty StoresDepartment StoresSupermarketsConvenience StoresSuperstoresDiscount StoresNarrow Product Line, Deep Assortment i.e. The Limited or Athlete’s FootWide Variety of Product Lines i.e. Clothing, Home Furnishings i.e. Saks Fifth AvenueWide Variety of Food, Laundry, & Household Products i.e. KrogerLimited Line of High-Turnover Convenience Goods i.e. 7-ElevenLarge Assortment of Routinely Purchased Food, Nonfood Products i.e. TargetStandard Merchandise at Lower Pricesi.e. Wal-MartOff-Price RetailersChanging Collection of Higher-Quality Goods at a Reduced Price i.e. T.J. Maxx
8 Discussion QuestionGiant superstores called category killers are an emerging trend. Answer the following questions:How is a category killer different from other types of retailers?Why has this form of retailing grown so rapidly?A category killer features a store the size of an airplane hanger. It carries a very deep assortment of a particular line with a knowledgeable staff. Category killers are prevalent in a wide range of categories, including books, baby gear, toys, electronics, home improvement products, linens and towels, party goods, sporting goods, and even pet supplies. Some would say that Babies-R-Us, Toys-R-Us, Home Depot, Lines and Things, Party Stop, and Pet Stop are all category killers even though store size may be smaller than the one described above.Hypermarkets are variations where the size may exceed six football fields. Auchan’s would be an example.This form of retailing has grown rapidly because of product line expanse, price, one stop shopping in a particular line, and massive promotion. Traditional retailers that do not specialize by product line, small retailers in small towns, a retailers that are in close proximity to a category killer may all be threatened.
9 Classification of Retailing: Retail Organization CorporateChainMerchandisingConglomeratesVoluntaryChainFranchiseOrganizationsRetailerCooperatives
11 Interactive Student Assignments Consider the following thought question, format an answer, pair with the student on your right, share your thoughts with one another, and respond to questions from the instructor.How do retailers establish a position in the marketplace?Retailers are searching for new marketing strategies to attract and hold customers. In the past retailers attracted customers with unique products, more or better services than their competitors offered, or credit cards. Today, the retailers are considering other factors in formulating their strategies. Retailers must first define their target markets and then decide how they will position themselves in those markets. This decision is an important one since many retailers have failed to define their target markets and positions clearly.When the decisions concerning product assortment and services arise, the retailer considers three variables:1). The retailer’s product assortment must match target shopper’s expectations.a). This involves decisions about the assortment’s width and depth.b). The retailer must also search for ways to differentiate itself from similarcompetitors. The aspect of quality is also a feature that must be considered.c). The next consideration is the services that will be offered. This is one ofthe key tools in nonprice competition.d). A store’s atmosphere is sometimes as important as the goods or servicesthat it carries. Increasingly, owners are turning their stores into theatersthat transport the customer into unusual, exciting shopping environments.
12 Product Assortment and Services Decisions Brand of MerchandiseMerchandising EventsProduct Differentiation StrategiesServices MixKey Tool of Nonprice Competitionfor Setting One Store Apart FromAnotherStore’s AtmospherePhysical Layout“Feel” That Suits the Target Marketand Moves Customers to Buy
13 Retailer’s Price, Promotion, and Place Decisions Price DecisionsTarget Market,Product & Service Assortment,CompetitionPromotion DecisionsUsing Advertising, Personal Selling, Sales Promotion, Public Relations, & Direct Marketing to Reach CustomersPlace DecisionsShopping Centers, Central Business Districts, Power Centers, or Online ShoppingLocation, Location, Location!
14 Mall of America The Mall of America “megamall” contains more than: 520 specialty stores,49 restaurants,7-acre indoor theme park,Underwater World featuring hundreds of marine specimens,And a two-story miniature golf course.
15 The Future of Retailing New Retail Forms and Shortening Retail Life-CyclesGrowth of Nonstore RetailingIncreasing Intertype CompetitionRise of the MegaretailersGrowing Importance of Retail TechnologyGlobal Expansion of Major RetailersRetail Stores as “Communities” or “Hangouts”
16 What is Wholesaling? Wholesaling Includes all the activities Involved in Selling Goods and Services to Those Buying for Resale or Business Use.
17 Why are Wholesalers Used? Wholesalers are Often Better at Performing One or More of the Following Channel Functions:ManagementServices & AdviceSelling & PromotingMarketInformationBuying &Assortment BuildingWholesalerFunctionsRisk BearingBulk-BreakingFinancingWarehousingTransportation
18 Types of Wholesalers Merchant Wholesaler Independently OwnedBusiness that Takes Title to theMerchandise it Handles.Manufacturers’ Sales Branches and OfficesWholesaling by Sellers or Buyers ThemselvesRather Than ThroughIndependentWholesalers.Agents & BrokersThey Don’t Take Title tothe Goods, and TheyPerform Only a FewFunctions.
20 Must Constantly Improve Their Services and Reduce Costs Distinction Between Large Retailers and Wholesalers BlursWholesalers Will Continue to Increase the Services ProvidedTrends in WholesalingWholesalers Are Beginning to Go Global
21 Rest Stop: Reviewing the Concepts Explain the roles of retailers and wholesalers in the distribution channel.Describe the major types of retailers and give examples of each.Identify the major types of wholesalers and give examples of each.Explain the marketing decisions facing retailers and wholesalers.