Retailing and Wholesaling 11. 11-2 ROAD MAP: Previewing the Concepts Explain the roles of retailers...
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Transcript of Retailing and Wholesaling 11. 11-2 ROAD MAP: Previewing the Concepts Explain the roles of retailers...
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Retailing and WholesalingRetailing and Wholesaling
11
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ROAD MAP: Previewing the Concepts
• Explain the roles of retailers and Explain the roles of retailers and wholesalers in the distribution channel.wholesalers in the distribution channel.
• Describe the major types of retailers Describe the major types of retailers and give examples of each.and give examples of each.
• Identify the major types of wholesalers Identify the major types of wholesalers and give examples of each.and give examples of each.
• Explain the marketing decisions facing Explain the marketing decisions facing retailers and wholesalers.retailers and wholesalers.
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What is Retailing?
• Retailing includes all the activities Retailing includes all the activities involved in selling products or involved in selling products or services directly to final consumers services directly to final consumers for their personal, non-business use.for their personal, non-business use.
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Types of Retailers
Retailers are classified based on:
Amount of Service They Offer
Breadth & Depth of Product Lines
Relative Prices Charged
How They Are Organized
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Amount of Service
• Self-Service Retailers:Self-Service Retailers:– Serve customers who are willing to Serve customers who are willing to
perform their own “locate-compare-perform their own “locate-compare-select” process to save money.select” process to save money.
• Limited-Service Retailers:Limited-Service Retailers:– Provide more sales assistance because Provide more sales assistance because
they carry more shopping goods about they carry more shopping goods about which customers need information.which customers need information.
• Full-Service Retailers:Full-Service Retailers:– Usually carry more specialty goods for Usually carry more specialty goods for
which customers like to be “waited on.”which customers like to be “waited on.”
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Product Line Classification
Specialty Stores:Carry narrow product lines with deep assortmentswithin those lines.
Department Stores:Carry a wide variety of product lines—typically clothing, home furnishings, and household goods.Each line is operated as a separate departmentmanaged by specialist buyers or merchandisers.
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Product Line Classification
Supermarket:Large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of food, laundry, and household products.
Convenience Stores:Small stores located near residential areas that are open long hours 7 days a week and carrya limited line of high-turnover convenience goods.
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Web-Based Supermarket
In the battle for “share of stomachs,” Safeway and many large supermarkets have added Web-based sales.
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Product Line Classification
Superstores:Much larger than regular supermarkets and offer a large assortment of routinely purchasedfood products, nonfood items, and services.
Category Killers:Giant specialty stores that carry a very deepassortment of a particular line and is staffedby knowledgeable employees.
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•What type of impact did the What type of impact did the emergence of category killers emergence of category killers have on department stores?have on department stores?
Discussion Question
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Relative Prices Classification
Discount Store:A retail institution that sells standard merchandiseat lower prices by accepting lower margins andselling at higher volume.
Off-Price Retailer:Retailer that buys at less-than-regular wholesaleprices and sells at less than retail. Examples arefactory outlets, independents, and warehouse clubs.
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Relative Prices Classification
Factory Outlet:Off-price retailing operation that is owned and operated by a manufacturer and that normallycarries the manufacturer’s surplus, discontinued,or irregular goods.
Independent Off-Price Retailer:Off-price retailer that is either owned and run byentrepreneurs or is a division of a larger retailoperation.
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Factory Outlets
Factory outlet malls and value-retail centers have blossomed in recent years, making them one of retailing’s hottest growth areas.
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Relative Prices Classification
Warehouse Club:Off-price retailer that sells a limited selection ofbrand-name grocery items, appliances, clothing,and a hodgepodge of other goods at deep discounts to members who pay annual membership fees.
Click Here to Visit Sam's Club
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Organizational Classification
Chain Stores:Two or more outlets that are owned and controlled,have central buying and merchandising, and sell similar lines of merchandise.
Voluntary Chain:A wholesaler-sponsored group of independentretailers that engages in bulk buying and commonmerchandising.
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Organizational Classification
Retailer Cooperative:A group of independent retailers that bands together to set up a jointly owned, centralwholesale operation and conducts jointmerchandising and promotion efforts.
Franchise:A contractual association between a manufacturer, wholesaler, or service organization (a franchiser) and independent businesspeople (franchisees) whobuy the right to own and operate one or moreunits in the franchise system.
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Franchising
Franchisees now command 35% of all retail sales in the U.S. Subway is one of the fastest growing franchises, with nearly 20,000 shops in 74 countries.
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Organizational Classification
Merchandising Conglomerates:A free-form corporation that combines severaldiversified retailing lines and forms under centralownership, along with some integration of theirdistribution and management functions.
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Retailer Marketing Decisions
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Assortment and Services Decisions
Product Assortment:Brand of merchandiseMerchandising events
Services Mix:Different numbers and types of services are key to non-price storedifferentiation
Store Atmosphere:Physical layout and “feel” of the store
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Price, Promotion, & Place 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
Retailers can locate in CBDs, various types ofshopping centers, strip malls, or power centers
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Mall of America
• The Mall of America The Mall of America “megamall” contains:“megamall” contains:– Over 520 specialty Over 520 specialty
storesstores– 49 restaurants49 restaurants– 7-acre indoor 7-acre indoor
theme parktheme park– Underwater World Underwater World
featuring hundreds featuring hundreds of marine of marine specimensspecimens
– A two-story A two-story miniature golf miniature golf course.course.
• Click Here to Visit Click Here to Visit the Mall of Americthe Mall of Americaa
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The Future of Retailing
1.1. New Retail Forms New Retail Forms and Shortening and Shortening Retail Life CyclesRetail Life Cycles
2.2. Growth of Growth of Nonstore Nonstore RetailingRetailing
3.3. Retail Retail ConvergenceConvergence
4.4. Rise of the Rise of the MegaretailersMegaretailers
5.5. Growing Growing Importance of Importance of Retail TechnologyRetail Technology
6.6. Global Expansion Global Expansion of Major Retailersof Major Retailers
7.7. Retail Stores as Retail Stores as “Communities” or “Communities” or “Hangouts”“Hangouts”
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Wholesaling
• Wholesaling includes all activities Wholesaling includes all activities involved in selling goods and involved in selling goods and services to those buying for resale or services to those buying for resale or business use.business use.
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Functions Provided by Wholesalers
Selling & PromotingSelling & Promoting
Buying &Assortment Building
Buying &Assortment Building
Bulk-BreakingBulk-Breaking
WarehousingWarehousing
TransportationTransportation
FinancingFinancing
Risk BearingRisk Bearing
MarketInformation
MarketInformation
ManagementServices & Advice
ManagementServices & Advice
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Types of Wholesalers
• Merchant WholesalersMerchant Wholesalers– Largest group of wholesalersLargest group of wholesalers– Account for 50% of wholesalingAccount for 50% of wholesaling– Two broad categories:Two broad categories:
•Full-service wholesalersFull-service wholesalers
•Limited-service wholesalersLimited-service wholesalers
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Types of Wholesalers
• Brokers and AgentsBrokers and Agents– Do not take title to goodsDo not take title to goods– Perform fewer functionsPerform fewer functions– Brokers bring buyers and sellers togetherBrokers bring buyers and sellers together– Agents represent buyers on more Agents represent buyers on more
permanent basispermanent basis– Manufacturers’ agents are most common Manufacturers’ agents are most common
type of agent wholesalertype of agent wholesaler
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Types of Wholesalers
• Manufacturers’ Sales Branches Manufacturers’ Sales Branches and Officesand Offices– Wholesaling by sellers or buyers Wholesaling by sellers or buyers
themselves rather than through themselves rather than through independent wholesalers.independent wholesalers.
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Wholesaling In Action
Grainger is by far the world’s leading wholesaler of maintenance, repair, and operating supplies.
Click Here to Explore Grainger's Website
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Wholesaler Marketing Decisions
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Must Constantly Improve Services and Reduce CostsMust Constantly Improve Services and Reduce Costs
Distinction Between Large Retailers & Wholesalers is BlurryDistinction Between Large Retailers & Wholesalers is Blurry
Will Continue to Increase the Services Provided to RetailersWill Continue to Increase the Services Provided to Retailers
Wholesalers Are Now Going GlobalWholesalers Are Now Going Global
Trends in Wholesaling
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Rest Stop: Reviewing the Concepts
1.1. Explain the roles of retailers and Explain the roles of retailers and wholesalers in the distribution channel.wholesalers in the distribution channel.
2.2. Describe the major types of retailers Describe the major types of retailers and give examples of each.and give examples of each.
3.3. Identify the major types of wholesalers Identify the major types of wholesalers and give examples of each.and give examples of each.
4.4. Explain the marketing decisions facing Explain the marketing decisions facing retailers and wholesalers.retailers and wholesalers.