Retailing (Concept & Definition)
-
Upload
dcsastudent -
Category
Business
-
view
48.358 -
download
6
description
Transcript of Retailing (Concept & Definition)
Retailing and Retailing and WholesalingWholesaling
Chapter 14Chapter 14
14 - 2
Objectives
• Understand the roles of retailers and Understand the roles of retailers and wholesalers in the marketing wholesalers in the marketing channel.channel.
• Know the major types of retailers.Know the major types of retailers.
• Know the major types of wholesalers.Know the major types of wholesalers.
• Understand the marketing decisions Understand the marketing decisions facing retailers and wholesalers.facing retailers and wholesalers.
14 - 3
• Huge product Huge product assortment assortment
• Prices are 20% – Prices are 20% – 30% below 30% below hardware storeshardware stores
• Obsessed with Obsessed with offering high offering high quality customer quality customer serviceservice
• Lifetime value of Lifetime value of customers: customers: $25,000$25,000
• Well-trained, highly Well-trained, highly motivated salespeople motivated salespeople earn above average earn above average salariessalaries
• Customer problem Customer problem solving is encouragedsolving is encouraged
• Internet site offers Internet site offers many home many home improvement tipsimprovement tips
• One of today’s most One of today’s most successful retailerssuccessful retailers
Home DepotHome Depot
Case Study
14 - 4
Definitions
• RetailingRetailing All activities involved in selling All activities involved in selling
goods or services directly to final goods or services directly to final consumers for their personal, consumers for their personal, nonbusiness use.nonbusiness use.
• RetailerRetailer Business whose sales come Business whose sales come
primarilyprimarily from retailing. from retailing.
14 - 5
Types of RetailersTypes of Retailers
Retailing
• Specialty StoresSpecialty Stores
• Department Department StoresStores
• SupermarketsSupermarkets
• Discount StoresDiscount Stores
• Convenience Convenience StoresStores
• Off-Price Off-Price RetailersRetailers
• SuperstoresSuperstores
14 - 6
Retailing
• Amount of serviceAmount of service
• Product linesProduct lines
• Relative pricesRelative prices
• Organizational Organizational approachapproach
• Self-service retailersSelf-service retailers Customers are willing to Customers are willing to
self-serve to save moneyself-serve to save money Discount storesDiscount stores
• Limited-service retailersLimited-service retailers Most department storesMost department stores
• Full-service retailersFull-service retailers Salespeople assist Salespeople assist
customers in every aspect customers in every aspect of shopping experienceof shopping experience
High-end department storesHigh-end department stores Specialty storesSpecialty stores
Retailers Are Retailers Are Classified By: Classified By:
14 - 7
Retailing
• Amount of serviceAmount of service
• Product linesProduct lines
• Relative pricesRelative prices
• Organizational Organizational approachapproach
• Specialty storesSpecialty stores Narrow product lines with Narrow product lines with
deep assortmentsdeep assortments
• Department storesDepartment stores Wide variety of product Wide variety of product
lineslines
• SupermarketsSupermarkets• Convenience storesConvenience stores
Limited lineLimited line
• SuperstoresSuperstores Food, nonfood, and Food, nonfood, and
servicesservices
• Category killersCategory killers Giant specialty storesGiant specialty stores
Retailers Are Retailers Are Classified By: Classified By:
14 - 8
Retailing
• Amount of serviceAmount of service
• Product linesProduct lines
• Relative pricesRelative prices
• Organizational Organizational approachapproach
• Discount storesDiscount stores Low margins are offset Low margins are offset
by high volumeby high volume
• Off-price retailersOff-price retailers Independent off-price Independent off-price
retailersretailers TJ Maxx, Marshall’sTJ Maxx, Marshall’s
Factory outletsFactory outlets Levi Strauss, ReebokLevi Strauss, Reebok
Warehouse clubsWarehouse clubs Sam’s Club, CostcoSam’s Club, Costco
Retailers Are Retailers Are Classified By: Classified By:
14 - 9
Retailing
• Amount of serviceAmount of service
• Product linesProduct lines
• Relative pricesRelative prices
• Organizational Organizational approachapproach
• Corporate chain storesCorporate chain stores Commonly owned / controlledCommonly owned / controlled
• Voluntary chainsVoluntary chains Wholesaler-sponsored groups Wholesaler-sponsored groups
of independent retailersof independent retailers
• Retailer cooperativesRetailer cooperatives Groups of independent Groups of independent
retailers who buy in bulkretailers who buy in bulk
• Franchise organizationsFranchise organizations Based on something uniqueBased on something unique
• Merchandising conglomeratesMerchandising conglomerates Diversified retailing lines and Diversified retailing lines and
forms under central forms under central ownershipownership
Retailers Are Retailers Are Classified By: Classified By:
14 - 10
• Retailer Marketing DecisionsRetailer Marketing Decisions Target marketing and positioningTarget marketing and positioning Product assortment, service mix, Product assortment, service mix,
store’s atmospherestore’s atmosphere PricePrice PromotionPromotion Place (location)Place (location)
Retailing
14 - 11
• The Future of RetailingThe Future of Retailing New retail forms and shortening New retail forms and shortening
retail life cyclesretail life cycles Wheel-of-retailing conceptWheel-of-retailing concept
Growth of nonstore retailingGrowth of nonstore retailing Mail-order, television, phone, Mail-order, television, phone,
online shoppingonline shopping Retail convergenceRetail convergence
Retailing
14 - 12
• The Future of RetailingThe Future of Retailing Rise of megaretailersRise of megaretailers Growing importance of retail Growing importance of retail
technologytechnology Global expansion of major Global expansion of major
retailersretailers Retail stores as “Communities” Retail stores as “Communities”
or “Hangouts”or “Hangouts”
Retailing
14 - 13
Definitions
• WholesalingWholesaling All activities involved in selling All activities involved in selling
goods and services to those goods and services to those buying for resale or business buying for resale or business use.use.
• WholesalerWholesaler A firm engaged primarily in A firm engaged primarily in
wholesaling activity.wholesaling activity.
14 - 14
• Wholesalers add value by Wholesalers add value by performing the following performing the following functions:functions: Selling and promotingSelling and promoting Buying and assortment buildingBuying and assortment building Bulk-breakingBulk-breaking WarehousingWarehousing TransportationTransportation
Wholesaling
14 - 15
• Wholesalers add value by Wholesalers add value by performing the following performing the following functions:functions: FinancingFinancing Risk bearingRisk bearing Marketing informationMarketing information Management services and adviceManagement services and advice
Wholesaling
14 - 16
Wholesaling
• Merchant Merchant WholesalersWholesalers
• Brokers and Agents Brokers and Agents
• Manufacturers’ and Manufacturers’ and retailers’ branches retailers’ branches and officesand offices
• Full-service wholesalersFull-service wholesalers Wholesale merchantsWholesale merchants Industrial distributorsIndustrial distributors
• Limited-service Limited-service wholesalerswholesalers Cash-and-carry wholesalersCash-and-carry wholesalers Truck wholesalers (jobbers)Truck wholesalers (jobbers) Drop shippersDrop shippers Rack jobbersRack jobbers Producer’s cooperativesProducer’s cooperatives Mail-order wholesalersMail-order wholesalers
Types of Types of WholesalersWholesalers
14 - 17
Wholesaling
• Merchant Merchant WholesalersWholesalers
• Brokers and Agents Brokers and Agents
• Manufacturers’ and Manufacturers’ and retailers’ branches retailers’ branches and officesand offices
• BrokersBrokers Bring buyers and Bring buyers and
sellers together and sellers together and assist in negotiationassist in negotiation
• AgentsAgents Manufacturers’ agentsManufacturers’ agents Selling agentsSelling agents Purchasing agentsPurchasing agents Commission merchantsCommission merchants
Types of Types of WholesalersWholesalers
14 - 18
Wholesaling
• Merchant Merchant WholesalersWholesalers
• Brokers and AgentsBrokers and Agents
• Manufacturers’ and Manufacturers’ and retailers’ branches retailers’ branches and officesand offices
• Sales branches and Sales branches and officesoffices Branches carry inventory: Branches carry inventory:
lumber, auto equipment, lumber, auto equipment, partsparts
Offices do not carry Offices do not carry inventory: dry goodsinventory: dry goods
• Purchasing officersPurchasing officers Perform roles similar to Perform roles similar to
brokers and agents, brokers and agents, however these individuals however these individuals are employees of the are employees of the organizationorganization
Types of Types of WholesalersWholesalers
14 - 19
• Wholesaler Marketing DecisionsWholesaler Marketing Decisions Target market and positioningTarget market and positioning
Targeting may be made on the basis of size Targeting may be made on the basis of size of customer, type of retailer, need for service.of customer, type of retailer, need for service.
Marketing mix decisionsMarketing mix decisionsProduct and service assortment: inventory, Product and service assortment: inventory,
linelinePricing: usual markup on COG is 20%Pricing: usual markup on COG is 20%Promotion: largely disorganized and Promotion: largely disorganized and
unplannedunplannedPlace: location, facilitiesPlace: location, facilities
Wholesaling
14 - 20
• Trends in WholesalingTrends in Wholesaling Price competition is still intensePrice competition is still intense Successful wholesalers must add value Successful wholesalers must add value
by increasing efficiency and by increasing efficiency and effectivenesseffectiveness
The distinction between large retailers The distinction between large retailers and wholesalers continues to blurand wholesalers continues to blur
More services will be provided to More services will be provided to retailersretailers
Many wholesalers are going globalMany wholesalers are going global
Wholesaling