Chap 13 econ 161

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  • Chap 13 econ 161

    1. 1. Chapter 13 Retailing and Wholesaling
    2. 2. Learning Goals <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>
    3. 3. <ul><li>Current annual sales approximately $260 billion </li></ul><ul><li>Value proposition is “Always Low Prices, Always!” </li></ul><ul><li>Wal-Mart executives spend at least two days a week visiting stores to stay connected with customers </li></ul><ul><li>The first to call employees “associates” to denote the partnership </li></ul><ul><li>Wal-Mart maintains low prices by keeping a sharp eye on costs including “tough” buying practices </li></ul><ul><li>Technological advances in distribution and communications systems help efficiency and lowers costs. </li></ul><ul><li>Lower advertising as a percentage of sales helps keep costs low </li></ul>Case Study Wal-Mart 13 -
    4. 4. Learning Goals <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>
    5. 5. 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><ul><li>Retailer </li></ul><ul><ul><li>Business whose sales come primarily from retailing. </li></ul></ul>
    6. 6. Retailer – The Gap <ul><li>Retailers will often use celebrity spokespeople to endorse their brand </li></ul>Marketing in Action 13 -
    7. 7. 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>Wholesaler </li></ul><ul><ul><li>A firm engaged primarily in wholesaling activity. </li></ul></ul>
    8. 8. Learning Goals <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>
    9. 9. Retailing <ul><li>Specialty Stores </li></ul><ul><li>Department Stores </li></ul><ul><li>Supermarkets </li></ul><ul><li>Discount Stores </li></ul><ul><li>Convenience Stores </li></ul><ul><li>Off-Price Retailers </li></ul>Types of Retailers <ul><li>Superstores </li></ul>
    10. 10. Retailing <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><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>Convenience stores and fast moving shopping goods </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 aspect of shopping experience </li></ul></ul><ul><ul><li>High-end department stores and specialty stores </li></ul></ul>Retailers Are Classified By:
    11. 11. Discussion Question Retailer Level of Service <ul><li>Self service checkout scanners are growing in use. </li></ul><ul><li>What advantages for retailer? Consumer? </li></ul><ul><li>What are the disadvantages? </li></ul>Marketing in Action 13 -
    12. 12. Retailing <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><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>Food, nonfood, and services </li></ul></ul><ul><li>Category killers </li></ul><ul><ul><li>Giant specialty stores </li></ul></ul>Retailers Are Classified By:
    13. 13. Online Grocers – Why are they growing so slowly? Marketing in Action Click on screenshot for website 13 -
    14. 14. Retailing <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><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>Retailers Are Classified By:
    15. 15. Discount Stores Target Corporation <ul><li>First store opened in 1902 </li></ul><ul><li>Currently has 1,147 stores in 47 states. </li></ul><ul><li>Builds brand name to heighten barriers to entry in the market. </li></ul><ul><li>Began a collaboration with Sony in 2002 for Sony to design products specifically for Target. </li></ul><ul><li>Successful in building defensible niche with middle and upper-end customers with low price but high style. </li></ul>Marketing in Action Source: Datamonitor 13 -
    16. 16. Target is low price but high style Marketing in Action Source: Business Week 13 -
    17. 17. Retailing <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><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 something unique </li></ul></ul><ul><li>Merchandising conglomerates </li></ul><ul><ul><li>Diversified retailing lines and forms under central ownership </li></ul></ul>Retailers Are Classified By:
    18. 18. <ul><li>The UPS Store is an example of a popular franchise. See more franchises by clicking on image. </li></ul>Click on screenshot for website with franchises Marketing in Action 13 -
    19. 19. Classifying Retailers <ul><li>How would you categorize Best Buy in terms of </li></ul><ul><ul><li>Amount of service </li></ul></ul><ul><ul><li>Product lines </li></ul></ul><ul><ul><li>Relative prices </li></ul></ul><ul><ul><li>Organizational approach </li></ul></ul>Marketing in Action 13 -
    20. 20. Learning Goals <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>
    21. 21. Wholesaling <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><ul><ul><li>Financing </li></ul></ul><ul><ul><li>Risk bearing </li></ul></ul><ul><ul><li>Market information </li></ul></ul><ul><ul><li>Management services and advice </li></ul></ul>
    22. 22. How might the National Beer Wholesalers Association add value to retailers? Marketing in Action Click on screenshot for website 13 -
    23. 23. Wholesaling <ul><li>Merchant Wholesalers </li></ul><ul><li>Brokers and Agents </li></ul><ul><li>Manufacturers’ and retailers’ branches and offices </li></ul><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>Types of Wholesalers
    24. 24. Wholesaling <ul><li>Merchant Wholesalers </li></ul><ul><li>Brokers and Agents </li></ul><ul><li>Manufacturers’ and retailers’ branches and offices </li></ul><ul><li>Brokers and agents do not take title of the goods. </li></ul><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>Types of Wholesalers
    25. 25. Export trade brokers help manufacturers with overseas distribution and marketing Marketing in Action Click on screenshot for website 13 -
    26. 26. Wholesaling <ul><li>Merchant Wholesalers </li></ul><ul><li>Brokers and Agents </li></ul><ul><li>Manufacturers’ and retailers’ branches and offices </li></ul><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>Types of Wholesalers
    27. 27. Learning Goals <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>
    28. 28. Retailer Marketing Decisions Figure 13.1 13 -
    29. 29. A retailer like Brooks Brothers chooses to locate in very high-end shopping districts. Marketing in Action 13 -
    30. 30. Retailing <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><ul><ul><ul><li>The merging of consumers, products, prices, and retailers </li></ul></ul></ul>
    31. 31. QVC Website Shop online while you watch the show Click on screenshot for website Marketing in Action 13 -
    32. 32. Retailing <ul><li>The Future of Retailing </li></ul><ul><ul><li>Rise of mega retailers </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>
    33. 33. <ul><li>Mall of America is more than just stores. This major tourist attraction includes stores, events and a 30-ride indoor theme park. </li></ul>Click on screenshot for website with information Marketing in Action 13 -
    34. 34. Wholesaler Marketing Decisions Figure 13.2 13 -
    35. 35. Wholesaling <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><ul><ul><li>More services will be provided to retailers </li></ul></ul><ul><ul><li>Many wholesalers are going global </li></ul></ul>
    36. 36. Learning Goals <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>

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