Chapter 12 Retailing and Wholesaling 12 -1

Chapter 12 Retailing and Wholesaling 12 -1

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. 2

What is Retailing? Includes all the Activities Involved in Selling Goods or Services Directly to Final Consumers for Their Personal, Nonbusiness Use. 3

Retailing can be done in stores (store retailing) or out of a store (nonstore retailing) such as: Direct mail, Catalogs, Telephone, Home shopping shows, Internet. 4

Classification of Retailing Amount of Service Self-Service, Limited-Service and Full-Service Retailer Product Line Length and Breadth of the Product Assortment Relative Prices Pricing Structure that is Used by the Retailer Retail Organizations Independent, Corporate, or Contractual Ownership Organization 5

Classification of Retailing: Amount of Service Limited-Service Self-Service Retailers Provide Only a Limited Provide Few or No Number of Services to to Shoppers Full-Service i. e. Sears i. e. Best Buy Retailers that Provide a Full Range of Services to Shoppers i. e. Neiman Marcus 6

Classification of Retailing: Product Line (Tab. 12 -1) Store Specialty Stores Department Stores Supermarkets Convenience Stores Superstores Discount Stores Off-Price Retailers Description Narrow Product Line, Deep Assortment i. e. The Limited or Athlete’s Foot Wide Variety of Product Lines i. e. Clothing, Home Furnishings i. e. Saks Fifth Avenue Wide Variety of Food, Laundry, & Household Products i. e. Kroger Limited Line of High-Turnover Convenience Goods i. e. 7 -Eleven Large Assortment of Routinely Purchased Food, Nonfood Products i. e. Target Standard Merchandise at Lower Prices i. e. Wal-Mart Changing Collection of Higher-Quality Goods at a Reduced Price i. e. T. J. Maxx 7

Giant 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? 8

Classification of Retailing: Retail Organization Corporate Chain Merchandising Conglomerates Voluntary Chain Franchise Organizations Retailer Cooperatives 9

Retailer Marketing Decisions (Fig. 12 -1) 10

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? 11

Product Assortment and Services Decisions Product Assortment • Brand of Merchandise • Merchandising Events • Product Differentiation Strategies Services Mix Key Tool of Nonprice Competition for Setting One Store Apart From Another Store’s Atmosphere • Physical Layout • “Feel” That Suits the Target Market and Moves Customers to Buy 12

Retailer’s Price, Promotion, and Place Decisions Price Decisions Target Market, Product & Service Assortment, Competition Promotion Decisions Using Advertising, Personal Selling, Sales Promotion, Public Relations, & Direct Marketing to Reach Customers Place Decisions Shopping Centers, Central Business Districts, Power Centers, or Online Shopping 13

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. 14

The Future of Retailing New Retail Forms and Shortening Retail Life-Cycles Growth of Nonstore Retailing Increasing Intertype Competition Rise of the Megaretailers Growing Importance of Retail Technology Global Expansion of Major Retailers Retail Stores as “Communities” or “Hangouts” 15

What is Wholesaling? Includes all the activities Involved in Selling Goods and Services to Those Buying for Resale or Business Use. 16

Why are Wholesalers Used? Wholesalers are Often Better at Performing One or More of the Following Channel Functions: Management Services & Advice Market Information Risk Bearing Selling & Promoting Wholesaler Functions Financing Buying & Assortment Building Bulk-Breaking Warehousing Transportation 17

Types of Wholesalers Merchant Wholesaler Independently Owned Business that Takes Title to the Merchandise it Handles. Manufacturers’ Sales Branches and Offices Wholesaling by Sellers or Buyers Themselves Rather Than Through Independent Wholesalers. Agents & Brokers They Don’t Take Title to the Goods, and They Perform Only a Few Functions. 18

Wholesaler Marketing Decisions (Fig. 12 -2) 19

Trends in Wholesaling Must Constantly Improve Their Servic Distinction Between Large Retailers a Wholesalers Will Continue to Increas Wholesalers Are Beginning to Go Glob 20

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. 21