Objectives Understand the roles of retailers and wholesalers in the marketing channel. Know the major types of retailers. Know the major types of wholesalers.
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Presentation on theme: "Objectives Understand the roles of retailers and wholesalers in the marketing channel. Know the major types of retailers. Know the major types of wholesalers."— Presentation transcript:
1 ObjectivesUnderstand the roles of retailers and wholesalers in the marketing channel.Know the major types of retailers.Know the major types of wholesalers.Understand the marketing decisions facing retailers and wholesalers.
2 Home Depot c Huge product assortment Prices are 20%–30% below hardware storesObsessed with offering high quality customer serviceLifetime value of customers: $25,000Well-trained, highly motivated salespeople earn above average salariesCustomer problem-solving is encouragedInternet site offers many home improvement tipsOne of today’s most successful retailers
3 Definitions Retailing All activities involved in selling goods or services directly to final consumers for their personal, nonbusiness use.
4 DefinitionsRetailerBusiness whose sales come primarily from retailing.Can be brick and mortar, 100% virtual, or click and mortar
5 ZanyBrainy.com Video Clip BusinessNowZanyBrainy.com Video ClipZanyBrainy.com is a click and mortar toy retailer.Click the picture above to play video
6 Discussion QuestionHow is web retailing different? In your opinion, what “works on the web” that won’t work in a typical store?
7 Retailers Types of Retailers Specialty Stores Department Stores SupermarketsDiscount StoresConvenience StoresOff-Price RetailersSuperstores
8 Retailers are Classified by: RetailingRetailers are Classified by:Self-service retailersCustomers are willing to self-serve to save moneyDiscount storesLimited-service retailersMost department storesFull-service retailersSalespeople assist customers in every wayHigh-end department storesSpecialty storesAmount of serviceProduct linesRelative pricesOrganizational approach
9 Retailers are Classified by: RetailingRetailers are Classified by:Specialty storesNarrow product lines with deep assortmentsDepartment storesWide variety of product linesSupermarketsConvenience storesLimited lineSuperstoresSell food, nonfood, and servicesCategory killersGiant specialty storesAmount of serviceProduct linesRelative pricesOrganizational approach
10 Outlet malls and category complete are popular with consumers
11 Retailers are Classified by: RetailingRetailers are Classified by:Discount storesLow margins are offset by high volumeOff-price retailersIndependent off-price retailersTJ Maxx, Marshall’sFactory outletsLevi Strauss, ReebokWarehouse clubsSam’s Club, CostcoAmount of serviceProduct linesRelative pricesOrganizational approach
12 Retailers are Classified by: RetailingRetailers are Classified by:Corporate chain storesCommonly owned/controlledVoluntary chainsWholesaler-sponsored groups of independent retailersRetailer cooperativesGroups of independent retailers who buy in bulkFranchise organizationsBased on uniquenessMerchandising conglomeratesDiversified retailing lines under central ownershipAmount of serviceProduct linesRelative pricesOrganizational approach
14 Discussion QuestionThe product assortment, the services mix, and the store atmosphere are used by retailers to differentiate their business from the competition.Select two retailers from your local area and discuss how each store differs with respect to the three variables above.
15 Retailing Retailer Marketing Mix Price Promotion Place High markup or high volume?PromotionPublic relations, sales promotions, advertising, direct marketingPlaceLocation, location, location!
16 Retailing The Future of Retailing New retail forms and shortening retail life cyclesWheel-of-retailing conceptGrowth of nonstore retailingMail-order, television, phone, online shoppingRetail convergence
17 Retailing The Future of Retailing Continued Rise of megaretailers Growing importance of retail technologyGlobal expansion of major retailersRetail stores as “Communities” or “Hangouts”
18 Mall of America hosts over 520 specialty stores, 49 restaurants, and a theme park
19 Retailing Retailer Communities: Check out Playstation.com
20 Definitions Wholesaling All activities involved in selling goods and services to those buying for resale or business use.A firm engaged primarily in wholesaling activity.
21 WholesalingWholesalers add value by performing the following functions:Selling and promotingBuying and assortment buildingBulk-breakingWarehousingTransportation
22 WholesalingWholesalers add value by performing the following functions:FinancingRisk bearingMarketing informationManagement services and advice
23 Wholesaling Types of Wholesalers Merchant Wholesalers Full-service wholesalersWholesale merchantsIndustrial distributorsLimited service wholesalersCash-and-carry wholesalersTruck wholesalers (jobbers)Drop shippersRack jobbersProducer’s cooperativesMail-order wholesalersMerchant WholesalersBrokers and AgentsManufacturers’ and retailers’ branches and offices
24 Wholesaling Types of Wholesalers Brokers Agents Merchant Wholesalers Bring buyers and sellers together and assist in negotiationAgentsManufacturers’ agentsSelling agentsPurchasing agentsCommission merchantsMerchant WholesalersBrokers and AgentsManufacturers’ and retailers’ branches and offices
25 Wholesaling Types of Wholesalers Merchant Wholesalers Sales branches and officesBranches carry inventory: lumber, auto equipment, partsOffices do not carry inventory: dry goodsPurchasing officersPerform roles similar to brokers and agents, however these individuals are employees of the organizationMerchant WholesalersBrokers and AgentsManufacturers’ and retailers’ branches and offices
27 Wholesaling Wholesaler Marketing Decisions Targeting may be made on the basis of:Size of customerType of retailerNeed for servicePositioning
28 Wholesaling Wholesaler Marketing Decisions Marketing mix decisions Product and service assortment: inventory, linePricing: usual markup on COG is 20%Promotion: largely disorganized and unplannedPlace: location, facilities
29 Wholesaling Trends in Wholesaling Price competition is still intense Successful wholesalers must add value by increasing efficiency and effectivenessThe distinction between large retailers and wholesalers continues to blur
30 Wholesaling More Trends in Wholesaling More services will be provided to retailersMany wholesalers are going globalWholesaler McKesson offers pharmacists a wide range of online resources