Principles of Marketing

“ Retailing & Wholesaling”

Retailing

All the activities involved in selling goods or services directly to final consumers for their personal, nonbusiness use.

Retailers - businesses whose sales come primarily from re

Retailers can be classified as: Store retailers such as Home Depot, Sears,

Walmart Nonstore retailers such as the mail, telephone,

and Internet.

Types of Retailers

Retailers can be classified on the basis of:

1) Amount of service

2) The breadth and depth of their product lines

3) The relative prices they charge

4) And how they are organized.

Amount of service

Self Service: for customers who are willing to perform their own locate-compare and select functions

Limited-service retailers: provide more sales assistance as they carry more shopping goods about which customers need information

Full-service retailers: such as specialty stores and first class department stores. These stores carry more specialty items.

Breadth and Depth of product lines

Store Type Length and Breadth of Product Assortment

Specialty StoresSpecialty Stores

Department StoresDepartment Stores

SupermarketsSupermarkets

Convenience StoresConvenience Stores

SuperstoresSuperstores

Category KillersCategory Killers

Narrow Product Line, Deep AssortmentNarrow Product Line, Deep Assortment

Wide Variety of Product Lines i.e. Clothing, Home Furnishings, & Household Items

Wide Variety of Product Lines i.e. Clothing, Home Furnishings, & Household Items

Wide Variety of Food, Laundry, & Household Products

Wide Variety of Food, Laundry, & Household Products

Limited Line of High-Turnover Convenience Goods

Limited Line of High-Turnover Convenience Goods

Large Assortment of Routinely Purchased Food & Nonfood Products, Plus Services

Large Assortment of Routinely Purchased Food & Nonfood Products, Plus Services

Giant Specialty Store that Carries a Very Deep Assortment of a Particular Line

Giant Specialty Store that Carries a Very Deep Assortment of a Particular Line

HypermarketsHypermarkets Huge SuperstoresHuge Superstores

Relative Prices Charged Discount Stores: A retail institution that sells standard

merchandise at lower prices by accepting lower margins and selling at higher volume.

Off-Price Retailers: Retailers that buy at less than regular wholesale prices and sells at less than retail. E.g. Independent off-price retailer: An off price retailer that is either owned

and run by an entrepreneur or is a division of a larger retail corporation Factory outlet: An off-price retailing operation that is owned and

operated by a manufacturer and that normally carries the manufacturer’s surplus , discontinued or irregular goods.

An off-price retailer that sells a limited selection of brand name grocery items , appliances, clothing, and a hodgepodge of other goods at deep discounts to members who pay annual membership fees.

Organizational Approach

Corporate Chains

Corporate Chains

Retailer Cooperatives

Retailer Cooperatives

Voluntary Chains

Voluntary Chains

Franchise Organizations

Franchise Organizations

MerchandisingConglomerates

MerchandisingConglomerates

Retail Organizations

Corporate Chain Stores

Two or more outlets that are commonly owned and controlled, employ central buying and merchandising, and sell similar lines of merchandise.

Corporate chain stores appear in all types of retailing, but they are strongest in department stores, variety stores, food, drug and women clothing stores.

Voluntary Chains

Wholesaler-sponsored groups of independent retailers engaged in bulk buying and common merchandising.

Retailer Cooperatives

Groups of independent retailers who set up a central buying organization and conduct joint promotion efforts.

Franchise Organizations

Contractual association between a franchiser ( a manufacturer, wholesaler, or a service organization) and franchisees ( independent business people who buy the right to own and operate one or more units in the franchise system)

Franchise organization are commonly based on some unique product, service or method or doing business, or a on a trade name to patent, or on good will that the franchiser has developed.

Merchandising conglomerates

A free form corporation that combines several diversified retailing lines and form under central ownership along with some integration of their distribution and management functions.

Retailer Marketing Decisions

Retailer MarketingMix

Retailer MarketingMix

Retailer StrategyRetailer Strategy

Target Market

Retail Store Positioning

Product and Service

Assortment

Prices

Promotion

Place (Location)

Retailer’s Product Assortment and Services Decisions

Product Assortment Decisions• Width and Depth of Assortment• Quality of Products• Product Differentiation Strategies

Product Assortment Decisions• Width and Depth of Assortment• Quality of Products• Product Differentiation Strategies

Services MixKey Tool of Nonprice Competitionfor Setting One Store Apart From

Another.

Services MixKey Tool of Nonprice Competitionfor Setting One Store Apart From

Another.

Store’s Atmosphere• Physical Layout• “Feel” That Suits the Target Market and Moves Customers to Buy

Store’s Atmosphere• Physical Layout• “Feel” That Suits the Target Market and Moves Customers to Buy

Retailer’s Price, Promotion, and Place Decisions

Promotion DecisionsUsing Advertising, Personal Selling,

Sales Promotion and Public Relations to Reach Customers.

Promotion DecisionsUsing Advertising, Personal Selling,

Sales Promotion and Public Relations to Reach Customers.

Place DecisionsShopping Centers, Central Business Districts, Power Centers, or Outlet

Malls. Location!

Place DecisionsShopping Centers, Central Business Districts, Power Centers, or Outlet

Malls. Location!

Price DecisionsTarget Market

Product & Services AssortmentCompetition

Price DecisionsTarget Market

Product & Services AssortmentCompetition

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.

WholesalerFunctions

ManagementServices & Advice

ManagementServices & Advice

Selling andPromoting

Selling andPromoting

MarketInformation

MarketInformation

Buying andAssortment Building

Buying andAssortment Building

Risk BearingRisk Bearing Bulk BreakingBulk Breaking

TransportingTransporting

FinancingFinancing WarehousingWarehousing

Wholesalers are Often Better at Performing One

or More of the Following Channel Functions:

Merchant Wholesaler

Independently Owned Business that Takes

Title to the Merchandise

it Handles.

Merchant Wholesaler

Independently Owned Business that Takes

Title to the Merchandise

it Handles.Manufacturers’Sales Branches

and Offices

Wholesaling by Sellersor Buyers Themselves Rather Than Through

IndependentWholesalers.

Manufacturers’Sales Branches

and Offices

Wholesaling by Sellersor Buyers Themselves Rather Than Through

IndependentWholesalers.

Brokers/ AgentsThey Don’t Take Title to

the Goods, and TheyPerform Only a Few

Functions.

Brokers/ AgentsThey Don’t Take Title to

the Goods, and TheyPerform Only a Few

Functions.

Types of WholesalersTypes of Wholesalers

Wholesaler Marketing DecisionsWholesaler Marketing Decisions

Wholesaler MarketingMix

Wholesaler MarketingMix

Wholesaler StrategyWholesaler Strategy

Target Market

Retail Store Positioning

Product and Service

Assortment

Prices

Promotion

Place (Location)

Trends in WholesalingTrends in Wholesaling

Wholesaling Developments to Consider

Must Learn to Compete Effectively Over Wider and More Diverse Areas

Must Learn to Compete Effectively Over Wider and More Diverse Areas

Increasing Consolidations Will Reduce Number of Wholesalers

Increasing Consolidations Will Reduce Number of Wholesalers

Surviving Wholesalers Will Grow LargerThrough Acquisitions and Mergers

Surviving Wholesalers Will Grow LargerThrough Acquisitions and Mergers

Vertical Integration Will Remain StrongVertical Integration Will Remain Strong

Global Expansion Global Expansion