chapter 13: wholesaling and retailing wholesaling · chapter 13: wholesaling and retailing retail...

Chapter 13: Wholesaling and Retailing

Wholesaling• Wholesaling is the process of buying or handling

merchandise and subsequently reselling it to organizational users, other wholesalers, and retailers.

• The largest category is machinery & electronics followed by food & beverages, automotive parts and building supplies

• Not all wholesalers perform every wholesaling function and the following list describes the basic functions required so when wholesalers are required companies choose one that suits there needs?

Copyright © 2010 Pearson Education Canada 1


Copyright © 2010 Pearson Education Canada

Wholesaling Functions

2

Manufacturer

Wholesaler

Retailer

Consumer

Market Coverage* Holding Inventory* Order Processing*Market Intelligence* Sales Support* v.i.p.? Assortment* Breaking Bulk*

It’s more than just buying it then reselling it!!



Types of Wholesalers (fig 13.1)

3

ManufacturerWholesaler

I.B.M

MerchantWholesaler

(TRADITIONAL)

Agents andBrokers

Branch OfficeSales Office

Full-Service Wholesalers(13.2)Limited-Service Wholesalers

Manufacturer’s AgentBrokerCommission AgentAuction Company



Retailing

4

Activities related to the sale of goods to final consumers, for personal, family, and household use. It is the last stage in the channel of distribution. Retail sales last year$450 billion!

The whole scope of retailing has undergone dramatic changes recently!



Retailing Functions (fig 13.3)

5

Manufacturer

Wholesaler

Retailer

Consumer

Sorting

Inventory

Marketing

Merchandising

Transaction

E-Commerce Services accounts for $8billion


Retail Marketing!

• Successful retailers are the ones that focus on only a few “core strengths”. The 5 elements are price, product, service, access and experience.(13.4)

• When shopping for goods consumers have choices so decisions are based on, image, hours open, parking, quality of products, services provided, location and environment of store.

• Successful retailers are adapting to consumer changes and tougher economic times and are revising there marketing strategies accordingly and developing a retail marketing mix strategy

Copyright © 2010 Pearson Education Canada 6



Retail by Ownership (335)

7

Chain Stores

Independents

Franchises

A group of stores centrally-owned and operated (4 or more stores).

Operate 1 to 3 stores; less resources and buying power.

Operate stores based on a contractual agreement; consistent business practice in each location.



Franchising

8

A retailer operating in an identical manner in all locations.

Piggybacking and co-branding are becoming popular among franchise retailers…Pizza Hut, KFC and Taco Bell under one roof!



Product and Services Offered 339

9

Specialty

Limited Line

“Big box”

General Merchandise

Aldo, La Senza

Golf Town, Best Buy

Staples, Chapters

Sears, Wal-Mart



Retail by Service Strategy

10

Stores are classified by the extent of services offered. Nowadays the cost of having staff standing around is a burden many stores cant have?

Full Serve

Limited Serve

Self Serve

Sears> customer assistance

Canadian Tire, Zellers

Costco> minimum service



Non-Store Retailing

11

Time-pressed consumers are looking for more convenient shopping solutions.($15 billion in 2009)

Buying direct via Infomercials>bullet info Direct-Response Advertising Traditional and Electronic Catalogues>sears Direct Selling In-home Demonstrations Vending Machines Temporary Kiosks (Pop-up Retail like Peoples) Electronic Shopping (online)**342 see next



Electronic Retailing

12

The convenience of electronic shopping is taking hold.

Close to half of Canada’s retailers have a website Total online retail sales of $4.7 billion in 2006 (double 05)

Online retailing offers several benefits:

1. Can reach new customers2. Better coordination with channel members (supply chain)3. Opportunity to solidify relationships with current

customers



Retail Marketing Mix

13

The retail marketing mix involves decisions in six key areas. (how to attract consumers to you)

1. Location* see following slides

2. Brand Identity

3. Atmosphere

4. Merchandise Assortment

5. Merchandise Control

6. Marketing Communications



Location

14

Location!

Location!

Location!

Alternatives include:

Central Business District>Eaton centre t.o. Suburban mall> has Sears, Bay, Walmart Outlet Mall> trendy, hip, modernMega-Mall> West Edmonton Mall Power Mall> Superstores with everything Lifestyle mall> attracting leisure shoppers Strip mall> smaller clustered Standalone Store>Staples, Home Depot



Brand Identity

15

Branding strategies influence consumers’ perceptions of a store.

Harry Rosen

An image of quality, contemporary fashion, and personalized service.

Canadian Tire

Products and communications focus on four themes: driving, living, playing and fixing.


Copyright © 2010 Pearson Education Canada©2007 Pearson Education Canada Inc. 16

Brand Image

The bedroom atmosphere of La Senza stores helps create a desired image.

Racy and exotic (the male view); pretty and comfortable (the female view).



Atmosphere

17

The physical characteristics of the store also influence consumers’ perceptions.

Appearance:

Inside and outside

Store Layout

Displays



Display Strategies

18

To differentiate and improve the shopping experience, new concepts are tried.

Specialty boutiques within stores

Demonstration centres

Video displays

Minimalist approach to displays



Merchandise Assortment

19

The assortment of merchandise is described as breadth of selection and depth of selection.

Breadth

Depth

The number of classifications of goods.

The number of brands and styles in each classification.



Assortment Consistency

20

Retailers tend to opt for consistency of product but sometimes add unrelated product to the mix.

Scrambled merchandising: Carrying product lines seemingly unrelated to the core business.

• Canadian Tire> automotive to living, fixing & playing• Shoppers Drug Mart> food stuffs• Loblaws> added clothing lines



Merchandise Control

21

Inventory turnover is a key measure of retail success and control.

InventoryTurnover = Sales

Average Inventory

If sales are $1,000,000 and the average inventory is $200,000, the inventory turnover would be 5.



Marketing Communications

22

Effective communications is needed to create awareness, build an image, and drive traffic to the store or website.

Promote store just like a brand Think brand but act retail Get emotional with the message Effective visual merchandising in stores

Read shoppers moves from functional to fabulous?

chapter 13: wholesaling and retailing wholesaling · chapter 13: wholesaling and retailing retail...

Documents