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Presentation Transcript

Chapter Eleven: 

Chapter Eleven Retailing and Wholesaling

Slide2: 

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.

Case Study: 

Whole Foods Market Has 170 stores worldwide with $4 billion in sales vs. 5000 stores and sales of $285 billion for Wal-Mart. Offers organic, natural, and gourmet foods. Positions itself AWAY from Wal-Mart: “Whole Foods, Whole People, Whole Planet.” Whole Foods Market – Finding Its Niche Case Study Marketing Efforts Web site reinforces the company’s positioning. Caters to health conscious, affluent, liberal, educated consumer base. Both in-store and online shopping is a customer experience. Cares about employees, customers, & community.

What Is Retailing?: 

What Is Retailing? Retailing: includes all the activities involved in selling products or services directly to final consumers for their personal, non-business use. Most retailing is done by retailers, but nonstore retailing has recently grown by leaps and bounds.

Types of Retailers: 

Types of Retailers Retailers are classified based on: Amount of service they offer Breadth and depth of product lines Relative prices charged How they are organized

Amount of Service : 

Amount of Service Self-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.”

Major Store Retailer Types: 

Major Store Retailer Types Specialty stores Department stores Supermarkets Category Killers Convenience stores Discount stores Off-price retailers Superstores

Relative Prices Classification: 

Relative Prices Classification Discount stores Off-price retailers Independent off-price retailers Factory outlets Factory outlet malls Value-retail centers Warehouse club

Organizational Classification: 

Organizational Classification Corporate chain stores Voluntary chain Retailer cooperative Franchise Merchandising conglomerates

Retailer Marketing Decisions: 

Retailer Marketing Decisions Retailer Strategy: Target market Retail store positioning Until retailers define and profile their markets, retailers cannot make meaningful decisions related to the retailer marketing mix.

Retailer Marketing Decisions: 

Retailer Marketing Decisions Retailer Marketing Mix: Product assortment and services Price Promotion Place (location)

Assortment and Service Decisions: 

Assortment and Service Decisions Product assortment Should differentiate the retailer while matching target shoppers’ expectations Services mix Store atmosphere Physical layout can help/hinder shopping Experiential retailing helps sell goods Unusual, exciting shopping environments are becoming more common

Price and Promotion Decisions: 

Price and Promotion 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.

Place Decisions: 

Place Decisions Retailers can locate in central business districts, various types of shopping centers, strip malls, or power centers. Location is key to success.

The Future of Retailing: 

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

Wholesaling: 

Wholesaling Wholesaling: includes all activities involved in selling goods and services to those buying for resale or business use. Wholesalers add value for producers by performing one or more channel functions.

Functions Provided by Wholesalers: 

Functions Provided by Wholesalers Financing Risk bearing Market information Management services and advice Selling and promoting Buying and assortment building Bulk-breaking Warehousing Transportation

Types of Wholesalers: 

Types of Wholesalers Merchant Wholesalers Largest group of wholesalers Account for 50% of wholesaling Two broad categories: Full-service wholesalers Limited-service wholesalers

Types of Wholesalers: 

Types of Wholesalers Brokers and Agents Do not take title to goods Perform fewer functions Brokers bring buyers and sellers together Agents represent buyers on more permanent basis Manufacturers’ agents are most common type of agent wholesaler

Types of Wholesalers: 

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

Wholesaler Marketing Decisions: 

Wholesaler Marketing Decisions Wholesaler Strategy: Target market Service positioning Wholesaler Marketing Mix: Product assortment and services Price Promotion Place (location)

Trends in Wholesaling: 

Trends in Wholesaling Fierce resistance to price increases. Winnowing out of suppliers who are not adding value based on cost and quality. Distinction between large retailers and wholesalers is blurry. Will continue to increase the services provided to retailers. Wholesalers are now going global.

Slide23: 

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.