1. Chapter 1
Retailing

2. What is Retailing?
Retailing includes all the activities involved in selling products or services directly to final consumers for their personal, non-business use.

3. Types of Retailers Retailers are classified based on:
Amount of Service They Offer
Breadth & Depth of Product Lines
Relative Prices Charged
How They Are Organized

4. Amount of Service Self-Service Retailers: Limited-Service Retailers:
Serve customers who are willing to perform their own “locate-compare-select” process to save money.
Limited-Service Retailers:
Provide more sales assistance because they carry more shopping goods about which customers need information.
Full-Service Retailers:
Usually carry more specialty goods for which customers like to be “waited on.”

5. Product Line Classification
Specialty Stores:
Carry narrow product lines
with deep assortments
within those lines, e.g jewelry,
Books stores ,sports goods
Single line-shopper stop
Limited line- raymonds
Super speciality-all brands
Department Stores:
Carry a wide variety of product lines—typically
clothing, home furnishings, and household goods.
Each line is operated as a separate department
managed by specialist buyers or merchandisers.
E.g- akbarally’s

6. Product Line Classification
Supermarket:
Large, low-cost, low-margin, high-volume,
self-service store that carries a wide variety of food,
laundry, and household products.e.g- foodland & garware
Convenience Stores:
Small stores located near residential areas that
are open long hours 7 days a week and carry
a limited line of high-turnover convenience goods.

7. Web-Based Supermarket
In the battle for “share of stomachs,” Safeway and many large supermarkets have added Web-based sales.

8. Product Line Classification
Superstores:
Much larger than regular supermarkets and
offer a large assortment of routinely purchased
food products, nonfood items, and services.
Offer dry cleaning, shoe repair
Category Killers:
Giant specialty stores that carry a very deep
assortment of a particular line and is staffed
by knowledgeable employees. e.g toys R U, home depot

9. Chapter 1
Discussion Question
What type of impact did the emergence of category killers have on department stores?

10. Relative Prices Classification
Discount Store:
A retail institution that sells standard merchandise
at lower prices by accepting lower margins and
selling at higher volume. e.g walmart, big bazaar
Sells goods at discounted price
Carries national brands
Operational costs r min. as self service & no frills
Location in low rent areas, it draws customers
from distant areas

11. Retailer that buys at less-than-regular wholesale
Off-Price Retailer:
Retailer that buys at less-than-regular wholesale
prices and sells at less than retail. Examples are
factory outlets, independents, and warehouse
clubs.
Factory Outlet:
Off-price retailing operation that is owned and
operated by a manufacturer and that normally
carries the manufacturer’s surplus, discontinued,
or irregular goods.
Independent Off-Price Retailer:
Off-price retailer that is either owned and run by
entrepreneurs or is a division of a larger retail
operation.

12. Factory Outlets
Factory outlet malls and value-retail centers have blossomed in recent years, making them one of retailing’s hottest growth areas.

13. Relative Prices Classification
Warehouse Club:
Off-price retailer that sells a limited selection of
brand-name grocery items, appliances, clothing,
at deep discounts to members who pay annual
membership fees.

14. Organizational Classification
Chain Stores:
Two or more outlets that are owned and controlled,
have central buying and merchandising, and sell
similar lines of merchandise.
Voluntary Chain:
A wholesaler-sponsored group of independent
retailers that engages in bulk buying and common
merchandising.

15. Organizational Classification
Retailer Cooperative:
A group of independent retailers that bands
together to set up a jointly owned, central
wholesale operation and conducts joint
merchandising and promotion efforts.
Franchise:
A contractual association between a manufacturer,
wholesaler, or service organization (a franchiser)
and independent businesspeople (franchisees) who
buy the right to own and operate one or more
units in the franchise system.

16. Franchising
Franchisees now command 35% of all retail sales in the U.S. Subway is one of the fastest growing franchises, with nearly 20,000 shops in 74 countries.

17. Retailer Marketing Decisions

18. Price, Promotion, & Place Decisions
Price policy must fit its target market and positioning,
product and service assortment, and competition
Can use any or all of the promotion tools—advertising,
personal selling, sales promotion, public relations,
and direct marketing—to reach consumers
Location-road infrastructure,power and public transport
Visibility-ability to see the store,parking lo

19. Mall of America The Mall of America “megamall” contains:
Chapter 1
Mall of America
The Mall of America “megamall” contains:
Over 520 specialty stores
49 restaurants
7-acre indoor theme park
Underwater World featuring hundreds of marine specimens
A two-story miniature golf course.

20. Business model Low margin-high turnover High operational efficiency
Economic drivers- high inventory turnover, low operating cost
Operating drivers- merchandise ,cost, sales productivity mgmt.

21. Trends in retailing
New retails forms& combinations-gas stations include food stores
Shorter life span
Electronic age-non store retailing via mail, tv, phones
Intertype competition-discount store vs deptt. Store
Deptt. Stores gave way to malls
Technology-Pcs for forecast, control inventory costs, scanning systems.
Unique formats & strong brand positioning. Mc, gap
Establishments provide people to congregate e.g tea shops, café coffee day, book stores, pubs

22. Wholesaling
Wholesaling includes all activities involved in selling goods and services to those buying for resale or business use.
Difference b/w wholesalers & retailers
Less attention to promos, atmosphere, location then retailers
Transactions are larger ,cover large trade area
Govt. dealing will be different

23. Functions Provided by Wholesalers
Selling & Promoting
Management
Services & Advice
Buying &
Assortment Building
Market
Information
Bulk-Breaking
Risk Bearing
Warehousing
Financing
Transportation

24. Types of Wholesalers
Merchant Wholesalers- independently owned business take title to merchandise they handle
Largest group of wholesalers
Account for 50% of wholesaling
Two broad categories:
Full-service wholesalers
Limited-service wholesalers
Cash n carry ,truck wholesalers, drop shippers, rack jobbers ,producers cooperatives, mail order wholesalers

25. Types of Wholesalers Brokers Agents
Do not take title to goods, Perform fewer functions
Brokers bring buyers and sellers together
Paid by party who hired them
Do not carry inventory, no finance, risk
E.g food brokers, real estate, insurance
Agents
Agents represent buyers or sellers on more permanent basis
Manufacturers’ agents –written agreement on
Pricing
territories
delivery, order procedure
Apparel, furniture, electrical goods

26. Types of Wholesalers Manufacturers’ Sales Branches and Offices
Wholesaling by sellers or buyers themselves rather than through independent wholesalers.

27. Wholesaling In Action
Grainger is by far the world’s leading wholesaler of maintenance, repair, and operating supplies.
200,000 products,520 branches
Satellite network
Online ordering

28. Wholesaler Marketing Decisions

30. Must Constantly Improve Services and Reduce Costs
Distinction Between Large Retailers & Wholesalers is Blurry
Chapter 1
Trends in Wholesaling
Will Continue to Increase the Services Provided to Retailers
Wholesalers Are Now Going Global