Ch.14

Retailers, Wholesalers, & Direct MarketingIntro to MarketingChapter 14

Evolution of Retailing
Trading Posts
General Stores
Super Markets- 1930’s
Discount Stores- 1950’s
Convenience Food Stores- 1960’s
Off Price Retailers- 1980’s to 1990’s
Internet Retailing

Wheel of Retailing
A new type of retailer gains a competitive foothold by offering customers lower prices than current outlets charge, maintaining profits by eliminating services.
Once established this retailer adds more services and it’s prices rise. Another new retailer comes in with lower prices.

Retailing Strategy
A retailer bases it’s decisions on:
1)Selecting a target market
2)Developing a marketing
strategy which specifies:
Merchandising Strategy
Customer Service Strategy
Pricing Strategy
Location/Distribution Strategy
Promotion Strategy
Store Atmospherics
Targeting Women Shoppers

Selecting a Target Market
Influenced by:
Size of Market
Profit Potential
Demographics or Other Segmentation

Merchandising Strategy
Guides the decision on which items to offer
Category Management
Shelf Space

Customer Service Strategy
To attract & retain customers
Gift wrapping, alterations, returns, bridal registries, delivery, installation, electronic shopping, childcare, lounges, coffee, etc.

Pricing Strategy
Markup
Amount that a retailer adds to a products cost to set the final selling price
Higher markup if more services are offered
Inventory turnover rate
Markdown

Location-Distribution Strategy
Location decision depends on:
Type of merchandise
Financial resource
Characteristics of the target market
Site availability

Location-Distribution Strategy
Planned shopping center: A group of retail stores planned, coordinated, and marketed as a single unit
Five types:
Neighborhood
Community
Regional
Power Center
Lifestyle Center
© PhotoDisc

Promotional Strategy
Location
In-store merchandising
Point of purchase displays
Customer traffic patterns
Sales clerks
Suggestion selling
Uniforms, product knowledge

Combining Shopping with Entertainment

The Disney StoreThe Disney Store Expands from Shopping Centers to Airport Locations
Copyright © 2001 by Harcourt, Inc. All rights reserved.

Store Atmospherics
Physical characteristics & amenities that contribute to the store’s image.
Exterior appearance
Window display, signs, architecture
Interior Layout
Lighting, color, scents, sounds,
Cleanliness, merchandise presentation

Retailers Classified by Form of Ownership
Chain Stores
Volume purchasing allows lower prices than independent stores
Name recognition
Independent Retailers
Personalized service

Classification by Shopping Effort
Convenience
Accessible location, close parking
Long rows
Rapid checkout
Shopping
Consumers compare prices, assortment
Specialty
Defined product lines
Consumers expend considerable effort

Classification by Services Provided
Self service
-Target
Self Selection
- Kroger grocery stores
Full- Service
- Saks Fifth Avenue

Classification by Product Line
Specialty Stores
One product line with considerable
Limited Line Retailers
Few related product lines
Category killers
Huge selection & low prices in single product lines
General Merchandise Retailers
Variety Stores
Department stores
Mass merchandisers
Discount Houses
Off Price Retailers
Hyper Markets & Super Centers

Scrambled Merchandising
A retailer combines dissimilar product lines in an attempt to boost sales volume

Wholesaling Intermediaries
Creating Utility
Providing Services
Buying, selling, storing, transporting, providing marketing information, financing, risk taking

Figure 14.1: Transaction Economies through Wholesaling Intermediaries

Types of Wholesaling Intermediaries
Manufacturer Owned
Sales branches, sales offices, trade fairs, & merchandise marts
Independent
Retailer Owned
eBay Has Expanded the Idea of the Traditional Auction House

Direct Marketing
Direct mail
Sales letters, brochures, video cassettes, catalogs, CD ROM catalogs.
Rely on database technology.
Narrow target market, personalization possible
Telemarketing
Direct Selling
Direct Response
Catalogs, internet, home shopping channels
Can orderly mail, phone, computer
Automatic Merchandising
Vending machines
Internet Retailing

Ch.14

by mhatcher

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