Retailing Wholesaling

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  • This one is definitely great presentation. I was wondering if an MBA in Retail Management was worth it or not. I found a Business School that offers courses too. Here is the link: http://tinyurl.com/kkt3nds
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Retailing Wholesaling

  1. 1. Retailing and Wholesaling Chapter 14
  2. 2. Objectives <ul><li>Understand the roles of retailers and wholesalers in the marketing channel. </li></ul><ul><li>Know the major types of retailers. </li></ul><ul><li>Know the major types of wholesalers. </li></ul><ul><li>Understand the marketing decisions facing retailers and wholesalers. </li></ul>14-
  3. 3. <ul><li>Huge product assortment </li></ul><ul><li>Prices are 20%–30% below hardware stores </li></ul><ul><li>Obsessed with offering high quality customer service </li></ul><ul><li>Lifetime value of customers: $25,000 </li></ul><ul><li>Well-trained, highly motivated salespeople earn above average salaries </li></ul><ul><li>Customer problem-solving is encouraged </li></ul><ul><li>Internet site offers many home improvement tips </li></ul><ul><li>One of today’s most successful retailers </li></ul>14- c Home Depot
  4. 4. Definitions <ul><li>Retailing </li></ul><ul><ul><li>All activities involved in selling goods or services directly to final consumers for their personal, nonbusiness use. </li></ul></ul>14-
  5. 5. Definitions <ul><li>Retailer </li></ul><ul><ul><li>Business whose sales come primarily from retailing. </li></ul></ul><ul><ul><li>Can be brick and mortar, 100% virtual, or click and mortar </li></ul></ul>14-
  6. 6. BusinessNow 14- ZanyBrainy.com Video Clip ZanyBrainy.com is a click and mortar toy retailer. Click the picture above to play video
  7. 7. 14- How is web retailing different? In your opinion, what “works on the web” that won’t work in a typical store? Discussion Question
  8. 8. Retailers <ul><li>Specialty Stores </li></ul><ul><li>Department Stores </li></ul><ul><li>Supermarkets </li></ul>14- Types of Retailers <ul><li>Discount Stores </li></ul><ul><li>Convenience Stores </li></ul><ul><li>Off-Price Retailers </li></ul><ul><li>Superstores </li></ul>
  9. 9. Retailing <ul><li>Self-service retailers </li></ul><ul><ul><li>Customers are willing to self-serve to save money </li></ul></ul><ul><ul><li>Discount stores </li></ul></ul><ul><li>Limited-service retailers </li></ul><ul><ul><li>Most department stores </li></ul></ul><ul><li>Full-service retailers </li></ul><ul><ul><li>Salespeople assist customers in every way </li></ul></ul><ul><ul><li>High-end department stores </li></ul></ul><ul><ul><li>Specialty stores </li></ul></ul>14- <ul><li>Amount of service </li></ul><ul><li>Product lines </li></ul><ul><li>Relative prices </li></ul><ul><li>Organizational approach </li></ul>Retailers are Classified by:
  10. 10. Retailing <ul><li>Specialty stores </li></ul><ul><ul><li>Narrow product lines with deep assortments </li></ul></ul><ul><li>Department stores </li></ul><ul><ul><li>Wide variety of product lines </li></ul></ul><ul><li>Supermarkets </li></ul><ul><li>Convenience stores </li></ul><ul><ul><li>Limited line </li></ul></ul><ul><li>Superstores </li></ul><ul><ul><li>Sell food, nonfood, and services </li></ul></ul><ul><li>Category killers </li></ul><ul><ul><li>Giant specialty stores </li></ul></ul>14- <ul><li>Amount of service </li></ul><ul><li>Product lines </li></ul><ul><li>Relative prices </li></ul><ul><li>Organizational approach </li></ul>Retailers are Classified by:
  11. 11. 14- Outlet malls and category complete are popular with consumers
  12. 12. Retailing <ul><li>Discount stores </li></ul><ul><ul><li>Low margins are offset by high volume </li></ul></ul><ul><li>Off-price retailers </li></ul><ul><ul><li>Independent off-price retailers </li></ul></ul><ul><ul><ul><li>TJ Maxx, Marshall’s </li></ul></ul></ul><ul><ul><li>Factory outlets </li></ul></ul><ul><ul><ul><li>Levi Strauss, Reebok </li></ul></ul></ul><ul><ul><li>Warehouse clubs </li></ul></ul><ul><ul><ul><li>Sam’s Club, Costco </li></ul></ul></ul>14- <ul><li>Amount of service </li></ul><ul><li>Product lines </li></ul><ul><li>Relative prices </li></ul><ul><li>Organizational approach </li></ul>Retailers are Classified by:
  13. 13. Retailing <ul><li>Corporate chain stores </li></ul><ul><ul><li>Commonly owned/controlled </li></ul></ul><ul><li>Voluntary chains </li></ul><ul><ul><li>Wholesaler-sponsored groups of independent retailers </li></ul></ul><ul><li>Retailer cooperatives </li></ul><ul><ul><li>Groups of independent retailers who buy in bulk </li></ul></ul><ul><li>Franchise organizations </li></ul><ul><ul><li>Based on uniqueness </li></ul></ul><ul><li>Merchandising conglomerates </li></ul><ul><ul><li>Diversified retailing lines under central ownership </li></ul></ul>14- <ul><li>Amount of service </li></ul><ul><li>Product lines </li></ul><ul><li>Relative prices </li></ul><ul><li>Organizational approach </li></ul>Retailers are Classified by:
  14. 14. 14- Figure 14-1: Retailer Marketing Mix Decisions
  15. 15. 14- The product assortment, the services mix, and the store atmosphere are used by retailers to differentiate their business from the competition. Select two retailers from your local area and discuss how each store differs with respect to the three variables above. Discussion Question
  16. 16. <ul><li>Retailer Marketing Mix </li></ul><ul><ul><li>Price </li></ul></ul><ul><ul><ul><li>High markup or high volume? </li></ul></ul></ul><ul><ul><li>Promotion </li></ul></ul><ul><ul><ul><li>Public relations, sales promotions, advertising, direct marketing </li></ul></ul></ul><ul><ul><li>Place </li></ul></ul><ul><ul><ul><li>Location, location, location! </li></ul></ul></ul>Retailing 14-
  17. 17. <ul><li>The Future of Retailing </li></ul><ul><ul><li>New retail forms and shortening retail life cycles </li></ul></ul><ul><ul><ul><li>Wheel-of-retailing concept </li></ul></ul></ul><ul><ul><li>Growth of nonstore retailing </li></ul></ul><ul><ul><ul><li>Mail-order, television, phone, online shopping </li></ul></ul></ul><ul><ul><li>Retail convergence </li></ul></ul>Retailing 14-
  18. 18. <ul><ul><li>Rise of megaretailers </li></ul></ul><ul><ul><li>Growing importance of retail technology </li></ul></ul><ul><ul><li>Global expansion of major retailers </li></ul></ul><ul><ul><li>Retail stores as “Communities” or “Hangouts” </li></ul></ul>Retailing 14- <ul><li>The Future of Retailing Continued </li></ul>
  19. 19. 14- Mall of America hosts over 520 specialty stores, 49 restaurants, and a theme park
  20. 20. Retailing 14- Retailer Communities: Check out Playstation.com Playstation.com
  21. 21. Definitions <ul><li>Wholesaling </li></ul><ul><ul><li>All activities involved in selling goods and services to those buying for resale or business use. </li></ul></ul><ul><li>Wholesaling </li></ul><ul><ul><li>A firm engaged primarily in wholesaling activity. </li></ul></ul>14-
  22. 22. <ul><li>Wholesalers add value by performing the following functions: </li></ul><ul><ul><li>Selling and promoting </li></ul></ul><ul><ul><li>Buying and assortment building </li></ul></ul><ul><ul><li>Bulk-breaking </li></ul></ul><ul><ul><li>Warehousing </li></ul></ul><ul><ul><li>Transportation </li></ul></ul>Wholesaling 14-
  23. 23. <ul><li>Wholesalers add value by performing the following functions: </li></ul><ul><ul><li>Financing </li></ul></ul><ul><ul><li>Risk bearing </li></ul></ul><ul><ul><li>Marketing information </li></ul></ul><ul><ul><li>Management services and advice </li></ul></ul>Wholesaling 14-
  24. 24. Wholesaling <ul><li>Full-service wholesalers </li></ul><ul><ul><li>Wholesale merchants </li></ul></ul><ul><ul><li>Industrial distributors </li></ul></ul><ul><li>Limited service wholesalers </li></ul><ul><ul><li>Cash-and-carry wholesalers </li></ul></ul><ul><ul><li>Truck wholesalers (jobbers) </li></ul></ul><ul><ul><li>Drop shippers </li></ul></ul><ul><ul><li>Rack jobbers </li></ul></ul><ul><ul><li>Producer’s cooperatives </li></ul></ul><ul><ul><li>Mail-order wholesalers </li></ul></ul>14- <ul><li>Merchant Wholesalers </li></ul><ul><li>Brokers and Agents </li></ul><ul><li>Manufacturers’ and retailers’ branches and offices </li></ul>Types of Wholesalers
  25. 25. Wholesaling <ul><li>Brokers </li></ul><ul><ul><li>Bring buyers and sellers together and assist in negotiation </li></ul></ul><ul><li>Agents </li></ul><ul><ul><li>Manufacturers’ agents </li></ul></ul><ul><ul><li>Selling agents </li></ul></ul><ul><ul><li>Purchasing agents </li></ul></ul><ul><ul><li>Commission merchants </li></ul></ul>14- <ul><li>Merchant Wholesalers </li></ul><ul><li>Brokers and Agents </li></ul><ul><li>Manufacturers’ and retailers’ branches and offices </li></ul>Types of Wholesalers
  26. 26. Wholesaling <ul><li>Sales branches and offices </li></ul><ul><ul><li>Branches carry inventory: lumber, auto equipment, parts </li></ul></ul><ul><ul><li>Offices do not carry inventory: dry goods </li></ul></ul><ul><li>Purchasing officers </li></ul><ul><ul><li>Perform roles similar to brokers and agents, however these individuals are employees of the organization </li></ul></ul>14- <ul><li>Merchant Wholesalers </li></ul><ul><li>Brokers and Agents </li></ul><ul><li>Manufacturers’ and retailers’ branches and offices </li></ul>Types of Wholesalers
  27. 27. 14- Figure 14-2: Wholesaler Marketing Mix Decisions
  28. 28. <ul><li>Wholesaler Marketing Decisions </li></ul><ul><ul><li>Targeting may be made on the basis of: </li></ul></ul><ul><ul><ul><li>Size of customer </li></ul></ul></ul><ul><ul><ul><li>Type of retailer </li></ul></ul></ul><ul><ul><ul><li>Need for service </li></ul></ul></ul><ul><ul><li>Positioning </li></ul></ul>Wholesaling 14-
  29. 29. <ul><li>Wholesaler Marketing Decisions </li></ul><ul><ul><li>Marketing mix decisions </li></ul></ul><ul><ul><ul><li>Product and service assortment: inventory, line </li></ul></ul></ul><ul><ul><ul><li>Pricing: usual markup on COG is 20% </li></ul></ul></ul><ul><ul><ul><li>Promotion: largely disorganized and unplanned </li></ul></ul></ul><ul><ul><ul><li>Place: location, facilities </li></ul></ul></ul>Wholesaling 14-
  30. 30. <ul><li>Trends in Wholesaling </li></ul><ul><ul><li>Price competition is still intense </li></ul></ul><ul><ul><li>Successful wholesalers must add value by increasing efficiency and effectiveness </li></ul></ul><ul><ul><li>The distinction between large retailers and wholesalers continues to blur </li></ul></ul>Wholesaling 14-
  31. 31. <ul><li>More Trends in Wholesaling </li></ul><ul><ul><li>More services will be provided to retailers </li></ul></ul><ul><ul><li>Many wholesalers are going global </li></ul></ul>Wholesaling 14- Wholesaler McKesson offers pharmacists a wide range of online resources

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