Chapter 14: Retailing and Wholesaling

Objectives
  • •Understand the roles of retailers and wholesalers in the marketing channel.
  • •Know the major types of retailers.
  • •Know the major types of wholesalers.
  • •Understand the marketing decisions facing retailers and wholesalers.
 
 

 

Please Open The Following Figures In Different Windows and Leave Them Open:

Animated Figure 14-1 , Animated Figure 14-2 .

 

Case Study

Home Depot
  • •Huge product assortment
  • •Prices are 20% – 30% below hardware stores
  • •Obsessed with offering high quality customer service
  • •Lifetime value of customers: $25,000
 

 
  • •Well-trained, highly motivated salespeople earn above average salaries
  • •Customer problem solving is encouraged
  • •Internet site offers many home improvement tips
  • •One of today’s most successful retailers

 

Definitions
  • •Retailing
§     All activities involved in selling goods or services directly to final consumers for their personal, nonbusiness use.
  • •Retailer
§      Business whose sales come primarily from retailing.
 
 

 

Retailing
Types of Retailers
  • •Specialty Stores
  • •Department Stores
  • •Supermarkets
 

 
  • •Discount Stores
  • •Convenience
    Stores
  • •Off-Price Retailers

 

  • •Superstores

 

Retailing

Retailers Are Classified By:

 

  • •Amount of service
  • •Product lines
  • •Relative prices
  • •Organizational approach
 

 
  • •Self-service retailers
  • §Customers are willing to self-serve to save money
  • §Discount stores
  • •Limited-service retailers
  • §Most department stores
  • •Full-service retailers
  • §Salespeople assist customers in every aspect of shopping experience
  • §High-end department stores
  • §Specialty stores
 

 

 

Retailing

Retailers Are Classified By:

 

  • •Amount of service
  • •Product lines
  • •Relative prices
  • •Organizational approach
 
 
  • •Specialty stores
  • §Narrow product lines with deep assortments
  • •Department stores
  • §Wide variety of product lines
  • •Supermarkets
  • •Convenience stores
  • §Limited line
  • •Superstores
  • §Food, nonfood, and services
  • •Category killers
  • §Giant specialty stores
§
 

 

 

Retailing

Retailers Are Classified By:

 

  • •Amount of service
  • •Product lines
  • •Relative prices
  • •Organizational approach
 

 
  • •Discount stores
  • §Low margins are offset by high volume
  • •Off-price retailers
  • §Independent off-price retailers
         TJ Maxx, Marshall’s
  • §Factory outlets
         Levi Strauss, Reebok
  • §Warehouse clubs
         Sam’s Club, Costco
§
 

 

 

Retailing

Retailers Are Classified By:

 

  • •Amount of service
  • •Product lines
  • •Relative prices
  • •Organizational approach
 

 
  • •Corporate chain stores
§        Commonly owned / controlled
  • •Voluntary chains
§         Wholesaler-sponsored groups of independent retailers
  • •Retailer cooperatives
§         Groups of independent retailers who buy in bulk
  • •Franchise organizations
§         Based on something unique
  • •Merchandising conglomerates
§           Diversified retailing lines and forms under central ownership
 

 

 

 

Retailing
•Retailer Marketing Decisions
  • §Target marketing and positioning
  • §Product assortment, service mix, store’s atmosphere
  • §Price
  • §Promotion
  • §Place (location)
 
 

 

Retailing
•The Future of Retailing
  • §New retail forms and shortening retail life cycles
  •  Wheel-of-retailing concept
  • §Growth of nonstore retailing
  •  Mail-order, television, phone, online shopping
  • §Retail convergence
 
 

 

Retailing
•The Future of Retailing
  • §Rise of megaretailers
  • §Growing importance of retail technology
  • §Global expansion of major retailers
  • §Retail stores as “Communities” or “Hangouts”
 
 

 

Definitions
  • •Wholesaling
§All activities involved in selling goods and services to those buying for resale or business use.
  • •Wholesaling
§A firm engaged primarily in wholesaling activity.
 
 

 

Wholesaling
•Wholesalers add value by performing the following functions:
  • §Selling and promoting
  • §Buying and assortment building
  • §Bulk-breaking
  • §Warehousing
  • §Transportation
 
 

 

Wholesaling
Wholesalers add value by performing the following functions:
  • §Financing
  • §Risk bearing
  • §Marketing information
  • §Management services and advice
 

 

 

Wholesaling
Types of Wholesalers
  • •Merchant Wholesalers
  • •Brokers and Agents
  • •Manufacturers’ and retailers’ branches and offices
 

 

 
  • •Full-service wholesalers
  • §Wholesale merchants
  • §Industrial distributors
  • •Limited-service wholesalers
  • §Cash-and-carry wholesalers
  • §Truck wholesalers (jobbers)
  • §Drop shippers
  • §Rack jobbers
  • §Producer’s cooperatives
  • §Mail-order wholesalers
 

 

 

Wholesaling
Types of Wholesalers
  • •Merchant Wholesalers
  • •Brokers and Agents
  • •Manufacturers’ and retailers’ branches and offices
 

 

 
  • •Brokers
  • §Bring buyers and sellers together and assist  in negotiation
  • •Agents
  • §Manufacturers’ agents
  • §Selling agents
  • §Purchasing agents
  • §Commission merchants
•

 

Wholesaling
Types of Wholesalers
  • •Merchant Wholesalers
  • •Brokers and Agents
  • •Manufacturers’ and retailers’ branches and offices
 

 

 
  • •Sales branches and offices
  • §Branches carry inventory: lumber, auto equipment, parts
  • §Offices do not carry inventory: dry goods
  • •Purchasing officers
  • §Perform roles similar to brokers and agents, however these individuals are employees of the organization

 

Wholesaling
•Wholesaler Marketing Decisions
  • §Target market and positioning
  • Targeting may be made on the basis of size of customer, type of retailer, need for service.
  • §Marketing mix decisions
  • vProduct and service assortment: inventory, line
  • vPricing: usual markup on COG is 20%
  • vPromotion: largely disorganized and unplanned
  • vPlace: location, facilities
 

 

Wholesaling
•Trends in Wholesaling
  • §Price competition is still intense
  • §Successful wholesalers must add value by increasing efficiency and effectiveness
  • §The distinction between large retailers and wholesalers continues to blur
  • §More services will be provided to retailers
  • §Many wholesalers are going global
 
 

 

Chapter 14: Retailing and Wholesaling

 

Study Guide
  • Concepts Check

 

Study Guide
  • Concepts Challenge

 

 
  • Chapter Outline

 

 
  • Video Case

 

 
  • PowerPoint Express - kotler14_exs.PPT            
  • Chapter 14 Power point

 

BACK

Chapter 14: Retailing and Wholesaling

Animated Figure 14-1 , Animated Figure 14-2 .

PowerPoint Express - kotler14_exs.PPT            

Chapter 14 Power point