Chapter 13 Retailing and Wholesaling 1 What

Chapter 13 Retailing and Wholesaling 1

What is Retailing? Includes all the activities Involved in Selling Goods or Services Directly to Final Consumers for Their Personal, Nonbusiness Use. 2

Retailing can be done in stores (store retailing) or out of a store (nonstore retailing) such as: n n n Direct mail, Catalogs, Telephone, Home shopping shows, Internet. 3

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 4

Classification of Retailing: Amount of Service Self-Service Retailer Provide Few or No Services to Shoppers i. e. Best Buy Limited-Service Retailers Provide Only a Limited Number of Services to Shoppers i. e. Sears Full-Service Retailers that Provide a Full Range of Services to Shoppers i. e. Neiman Marcus 5

Classification of Retailing: Product Line (Tab. 13. 1) Store Specialty Stores Department Stores Supermarkets Convenience Stores Superstores Discount Stores Off-Price Retailers Warehouse Clubs Description Narrow Product Line, Deep Assortment i. e. The Limited or Athlete’s Foot Wide Variety of Product Lines i. e. Clothing, Home Furnishings, 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. Toys R Us Standard Merchandise at Lower Prices i. e. Wal-Mart Changing Collection of Higher-Quality Goods at a Reduced Price i. e. T. J. Maxx Limited Selection of Brand-Name Grocery Items, Appliances, Etc. i. e. Sam’s Club 6

Classification of Retailing: Relative Prices Higher Prices and Offer Higher-Quality Goods and Customer Service Regular Prices and Offer Normal-Quality Goods and Customer Service Low Prices and Offer Lower-Quality Goods and Customer Service Discount Stores “Off-Priced” Retailers Catalog Showrooms 7

Classification of Retailing: Retail Organization Corporate Chain Merchandising Conglomerates Voluntary Chain Franchise Organizations Retailer Cooperatives 8

Retailer Marketing Decisions (Fig. 13. 1) Retailer Strategy Target Market Retail Store Positioning Retailer Marketing Mix Product and service assortment Prices Promotion Place (location) 9

Product Assortment and Services Decisions Product Assortment • Width and Depth of Assortment • Quality of Products • 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 10

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, or Power Centers, or Online Shopping 11

The Future of Retailing New Retail Forms and Shortening R Growth of Nonstore Retailing Increasing Intertype Competition Rise of Megaretailer Growing Importance of Retail Techn Global Expansion of Major Retailers Retail Stores as “Communities” or “H 12

The Wheel of Retailing High Margin High Price High Status 1 3 2 1 2 3 4 Low Margin Low Price Low Status 2 1 = Discount 2 = Superstore 3 = Warehouse Club 4 = Combination Store 3 1 13

Discussion Connections Online retailers provide an alternative to shopping the old fashioned way. Discuss the differences in shopping for books and music at www. Amazon. com vs. Barnes & Noble Booksellers. Discuss the differences in shopping for groceries at www. peapod. com vs. your local grocery store. Which do you prefer and why? 14

What is Wholesaling? All the activities involved in selling goods and services to those buying for resale or business use. Wholesaler - those firms engaged primarily in wholesaling activity. Wholesalers buy mostly from producers and sell mostly to: n n n Retailers, Industrial consumers, and Other wholesalers. 15

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 and Promoting Wholesaler Functions Financing Buying and Assortment Building Bulk Breaking Warehousing Transportation 16

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. Brokers/ Agents They Don’t Take Title to the Goods, and They Perform Only a Few Functions. 17

Wholesaler Marketing Decisions (Fig. 13. 2) Wholesaler Strategy Wholesaler Marketing Mix Target Market Product and service assortment Service Positioning Prices Promotion Place (location) 18

Trends in Wholesaling Consolidation within the Industry is R Distinction Between Large Retailers a Wholesalers Will Continue to Increas Wholesalers Are Beginning to Go Glob 19

Review of Concept Connections 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. 20