Managing Retailing, Wholesaling, and Market Logistics

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Managing Retailing, Wholesaling, and Market Logistics

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Managing Retailing, Wholesaling, and Market Logistics

  1. 1. Chapter 15 Managing Retailing, Wholesaling, and Market Logistics PowerPoint by Karen E. James Louisiana State University - Shreveport
  2. 2. Objectives <ul><li>Determine the types of organizations in this sector. </li></ul><ul><li>Learn what marketing decisions organizations in this sector make. </li></ul><ul><li>Understand the major trends in this sector. </li></ul>
  3. 3. Retailing <ul><li>Retailing Basics </li></ul><ul><li>Types of retailers </li></ul><ul><li>Marketing decisions </li></ul><ul><li>Retailing trends </li></ul><ul><li>Retail life cycle </li></ul><ul><li>Wheel-of-retailing </li></ul><ul><li>Service levels </li></ul><ul><li>Retail positioning strategies </li></ul><ul><li>Nonstore retailing </li></ul><ul><li>Corporate retailing </li></ul>
  4. 4. Retailing <ul><li>Specialty store </li></ul><ul><li>Department store </li></ul><ul><li>Supermarket </li></ul><ul><li>Discount store </li></ul><ul><li>Convenience store </li></ul><ul><li>Off-price retailer </li></ul><ul><li>Superstore </li></ul>Major Store Retailer Types
  5. 5. Retailing <ul><li>Retail-store types pass through the retail life cycle . </li></ul><ul><li>The wheel-of-retailing describes how new store types emerge. </li></ul><ul><li>Retailers can offer one of four levels of service: </li></ul><ul><ul><li>Self-service, self-selection, limited service, and full service </li></ul></ul>
  6. 6. Retailing <ul><li>Four broad retail positioning strategies include: </li></ul><ul><ul><li>Bloomingdale’s </li></ul></ul><ul><ul><li>Tiffany </li></ul></ul><ul><ul><li>Sunglass Hut </li></ul></ul><ul><ul><li>Wal-Mart </li></ul></ul><ul><li>Non-store retailing has been growing faster than store retailing </li></ul>
  7. 7. Retailing <ul><li>Corporate chain store </li></ul><ul><li>Voluntary chain </li></ul><ul><li>Retailer cooperative </li></ul><ul><li>Consumer cooperative </li></ul><ul><li>Franchise organization </li></ul><ul><li>Merchandising conglomerate </li></ul>Major Types of Retail Organizations
  8. 8. Retailing <ul><li>Retailing Basics </li></ul><ul><li>Types of retailers </li></ul><ul><li>Marketing decisions </li></ul><ul><li>Retailing trends </li></ul><ul><li>Target market </li></ul><ul><li>Product assortment and placement </li></ul><ul><li>Services mix and store atmosphere </li></ul><ul><li>Price </li></ul><ul><li>Promotion </li></ul><ul><li>Place </li></ul>
  9. 9. Retailing <ul><li>General business district </li></ul><ul><li>Regional shopping center </li></ul><ul><li>Community shopping center </li></ul><ul><li>Strip mall (shopping strip) </li></ul><ul><li>Location within a larger store or operation </li></ul>Location Options for Retailers
  10. 10. Retailing <ul><li>Retailing Basics </li></ul><ul><li>Types of retailers </li></ul><ul><li>Marketing decisions </li></ul><ul><li>Retailing trends </li></ul><ul><li>New retail forms </li></ul><ul><li>Intertype competition </li></ul><ul><li>Growth of giant retailers </li></ul><ul><li>Technology </li></ul><ul><li>Global expansion </li></ul><ul><li>Selling experiences </li></ul><ul><li>Competition between store-based and non-store-based retailing </li></ul>
  11. 11. Wholesaling <ul><li>Wholesaling </li></ul><ul><li>Wholesaling basics </li></ul><ul><li>Types of wholesalers </li></ul><ul><li>Marketing decisions </li></ul><ul><li>Wholesaling trends </li></ul><ul><li>Wholesaling excludes manufacturers, farmers, and retailers </li></ul><ul><li>Wholesalers differ from retailers in three key ways </li></ul><ul><li>Wholesalers handle many functions more efficiently than do manufacturers </li></ul>
  12. 12. Wholesaling <ul><li>Selling and promoting </li></ul><ul><li>Buying and assortment building </li></ul><ul><li>Bulk breaking </li></ul><ul><li>Warehousing </li></ul><ul><li>Transportation </li></ul><ul><li>Financing </li></ul><ul><li>Risk bearing </li></ul><ul><li>Market information </li></ul>Wholesaler Functions
  13. 13. Wholesaling <ul><li>Wholesaling </li></ul><ul><li>Wholesaling basics </li></ul><ul><li>Growth and types of wholesalers </li></ul><ul><li>Marketing decisions </li></ul><ul><li>Wholesaling trends </li></ul><ul><li>Wholesalers vary in type and function </li></ul><ul><li>Wholesaling has been growing due to two key factors: </li></ul><ul><ul><li>Many factories are located far from buyers </li></ul></ul><ul><ul><li>An increasing need to adapt product quantities, features, or packages to meet buyer needs </li></ul></ul>
  14. 14. Wholesaling <ul><li>Merchant wholesalers </li></ul><ul><li>Full-service wholesalers </li></ul><ul><li>Limited-service wholesalers </li></ul><ul><li>Brokers & agents </li></ul><ul><li>Brokers </li></ul><ul><li>Agents </li></ul><ul><li>Manufacturers’ and retailers’ branches and offices </li></ul><ul><li>Miscellaneous wholesalers </li></ul>Major Wholesaler Types
  15. 15. Wholesaling <ul><li>Wholesaling </li></ul><ul><li>Wholesaling basics </li></ul><ul><li>Types of wholesalers </li></ul><ul><li>Marketing decisions </li></ul><ul><li>Wholesaling trends </li></ul><ul><li>Target market </li></ul><ul><li>Product assortment and placement </li></ul><ul><li>Price </li></ul><ul><li>Promotion </li></ul><ul><li>Place </li></ul>
  16. 16. Wholesaling <ul><li>Wholesaling </li></ul><ul><li>Wholesaling basics </li></ul><ul><li>Types of wholesalers </li></ul><ul><li>Marketing decisions </li></ul><ul><li>Wholesaling trends </li></ul><ul><li>Direct buying trends initially threatened wholesalers </li></ul><ul><li>Wholesalers have adapted by: </li></ul><ul><ul><li>Adding value </li></ul></ul><ul><ul><li>Reducing costs </li></ul></ul><ul><ul><li>Strengthening relationships with manufacturers </li></ul></ul>
  17. 17. Market Logistics <ul><li>Interrelated Aspects Associated with Market Logistics: </li></ul><ul><ul><li>Physical distribution </li></ul></ul><ul><ul><li>Supply chain management (SCM) </li></ul></ul><ul><ul><li>Value network </li></ul></ul><ul><ul><li>Demand chain planning </li></ul></ul><ul><ul><li>Market logistics </li></ul></ul><ul><ul><li>Integrated logistics systems (ILS) </li></ul></ul>
  18. 18. Market Logistics <ul><li>Key Elements </li></ul><ul><li>Market-logistics objectives </li></ul><ul><li>Market-logistics decisions </li></ul><ul><li>Market logistics lessons </li></ul><ul><li>Logistics involve trade-offs between costs and customer service </li></ul><ul><li>Maximizing profits, not sales, is key </li></ul><ul><li>A total system basis should be considered </li></ul><ul><li>Designing a system that will minimize the cost of achieving objectives should be the outcome </li></ul>
  19. 19. Market Logistics <ul><li>M = T + FW + VW + S </li></ul><ul><li>Where . . . </li></ul><ul><li> M = total market-logistics cost of proposed system; </li></ul><ul><li> T = total freight cost of proposed system; </li></ul><ul><li>FW = total fixed warehouse cost of proposed system; </li></ul><ul><li>VW = total variable warehouse cost of proposed system </li></ul><ul><li> S = total cost of lost sales due to average delivery delay </li></ul>Calculating the Cost of Market-Logistics Systems
  20. 20. Market Logistics <ul><li>Key Elements </li></ul><ul><li>Market-logistics objectives </li></ul><ul><li>Market-logistics decisions </li></ul><ul><li>Market logistics lessons </li></ul><ul><li>Order processing </li></ul><ul><li>Warehousing </li></ul><ul><ul><li>Storage, distribution, automated warehouses </li></ul></ul><ul><li>Inventory </li></ul><ul><ul><li>Determine reorder point, relevant cost comparison, optimal order quantity </li></ul></ul><ul><li>Transportation </li></ul><ul><ul><li>Containerization </li></ul></ul><ul><ul><li>Private vs. contract carriers </li></ul></ul>
  21. 21. Market Logistics <ul><li>Key Elements </li></ul><ul><li>Market-logistics objectives </li></ul><ul><li>Market-logistics decisions </li></ul><ul><li>Market logistics lessons </li></ul><ul><li>A senior V.P. is needed as the single contact point for all logistical elements </li></ul><ul><li>Senior V.P. must maintain close control </li></ul><ul><li>Software and systems are essential for competitively superior logistics performance </li></ul>

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