Lecture Principles of Marketing - Chapter 11: Retailing and wholesaling

This chapter 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.
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Lecture Principles of Marketing - Chapter 11: Retailing and wholesaling Chapter Eleven Retailing and Wholesaling Roadmap: Previewing the Concepts 1. Explain the roles of retailers and wholesalers in the distribution channel. 2. Describe the major types of retailers and give examples of each. 3. Identify the major types of wholesalers and give examples of each. 4. Explain the marketing decisions facing retailers and wholesalers. Copyright 2007, Prentice Hall, Inc. 11-2 Case Study Whole Foods Market – Finding Its Niche Whole Foods Market Marketing Efforts  Has 170 stores worldwide  Web site reinforces the with $4 billion in sales vs. company’s positioning. 5000 stores and sales of  Caters to health conscious, $285 billion for Wal-Mart. affluent, liberal, educated  Offers organic, natural, consumer base. and gourmet foods.  Both in-store and online  Positions itself AWAY shopping is a customer from Wal-Mart: experience. “Whole Foods, Whole  Cares about employees, People, Whole Planet.” customers, & community. 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  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  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  Specialty stores  Department stores  Supermarkets – Category Killers  Convenience stores  Discount stores  Off-price retailers  Superstores Relative Prices Classification  Discount stores  Off-price retailers – Independent off-price retailers – Factory outlets • Factory outlet malls • Value-retail centers – Warehouse club Organizational Classification  Corporate chain stores  Voluntary chain  Retailer cooperative  Franchise  Merchandising conglomerates 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 Mix: – Product assortment and services – Price – Promotion – Place (location) 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 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  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 1. New Retail Forms 5. Growing and Shortening Importance of Retail Life Cycles Retail Technology 2. Growth of 6. Global Expansion Nonstore Retailing of Major Retailers 3. Retail 7. Retail Stores as Convergence “Communities” or 4. Rise of the “Hangouts” Megaretailers 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  Selling and  Financing promoting  Risk bearing  Buying and  Market assortment information building  Management  Bulk-breaking services and  Warehousing advice  Transportation 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  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  Manufacturers’ Sales Branches and Offices – Wholesaling by sellers or buyers themselves rather than through independent wholesalers.