Ch 14 retailing and wholsaling

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Ch 14 retailing and wholsaling

  1. 1. Retailing and Wholesaling <ul><li>Chapter 14 </li></ul><ul><li>PowerPoint slides </li></ul><ul><li>Express version </li></ul><ul><li>Instructor name </li></ul><ul><li>Course name </li></ul><ul><li>School name </li></ul><ul><li>Date </li></ul>Principles of Marketing, Sixth Canadian Edition
  2. 2. Learning Objectives <ul><li>After studying this chapter, you should be able to: </li></ul><ul><ul><li>Explain the roles of retailers and wholesalers in the marketing channel </li></ul></ul><ul><ul><li>Describe the major types of retailers and give examples of each </li></ul></ul><ul><ul><li>Identify the major types of wholesalers and give examples of each </li></ul></ul><ul><ul><li>Explain the marketing decisions facing retailers and wholesalers </li></ul></ul>
  3. 3. Retailing <ul><li>Retailing: all activities involved in selling goods or services directly to final consumers for their personal, non-business use </li></ul><ul><ul><li>Retailing can take place in stores and non-store environments </li></ul></ul><ul><ul><li>Retailers can be classified based on: </li></ul></ul><ul><ul><ul><li>Amount of service offered </li></ul></ul></ul><ul><ul><ul><li>Depth of products lines </li></ul></ul></ul><ul><ul><ul><li>Relative prices charged </li></ul></ul></ul><ul><ul><ul><li>How they are organized </li></ul></ul></ul>
  4. 4. Types of Retailers <ul><li>Amount of service offered: </li></ul><ul><ul><li>Self-service retailers </li></ul></ul><ul><ul><li>Limited-service retailers </li></ul></ul><ul><ul><li>Full-service retailers </li></ul></ul><ul><li>Relative prices charged: </li></ul><ul><ul><li>Discount stores </li></ul></ul><ul><ul><li>Off-price retailers: </li></ul></ul><ul><ul><ul><li>Independents </li></ul></ul></ul><ul><ul><ul><li>Factory outlets </li></ul></ul></ul><ul><ul><ul><li>Warehouse clubs </li></ul></ul></ul><ul><li>Products lines: </li></ul><ul><ul><li>Specialty stores </li></ul></ul><ul><ul><li>Department stores </li></ul></ul><ul><ul><li>Supermarkets </li></ul></ul><ul><ul><li>Convenience stores </li></ul></ul><ul><ul><li>Discount stores </li></ul></ul><ul><ul><li>Off-price retailers </li></ul></ul><ul><ul><li>Superstores </li></ul></ul>
  5. 5. Types of Retailers (continued) <ul><li>Retail organizations: </li></ul><ul><ul><li>Corporate chains </li></ul></ul><ul><ul><li>Voluntary chains </li></ul></ul><ul><ul><li>Retailer cooperatives </li></ul></ul><ul><ul><li>Franchise organizations </li></ul></ul><ul><ul><li>Merchandising conglomerates </li></ul></ul><ul><li>Franchises: contractual association between two businesses, having three characteristics: </li></ul><ul><ul><li>The franchiser owns a trade or service mark, and licenses it for use for royalties </li></ul></ul><ul><ul><li>Franchisees must pay to be part of the system </li></ul></ul><ul><ul><li>Franchisers provide a packaged marketing and operations system </li></ul></ul>
  6. 6. Retailer Marketing Decisions <ul><li>Target markets chosen will affect all other decisions </li></ul><ul><li>Markets chosen and positioning need to be clear </li></ul><ul><li>Cannot hope to be “something for everyone” </li></ul><ul><li>Product variables: </li></ul><ul><ul><li>Assortment </li></ul></ul><ul><ul><li>Services mix </li></ul></ul><ul><ul><li>Atmospherics </li></ul></ul><ul><li>Price decision: </li></ul><ul><ul><li>Markups and volume are inversely related </li></ul></ul>Figure 14.1
  7. 7. Retailer Marketing Decisions (continued) <ul><li>Promotion: retailers will use all five tools to promote themselves </li></ul><ul><ul><li>Advertising, personal selling, sales promotion, public relations, and direct marketing </li></ul></ul><ul><li>Place decision: </li></ul><ul><ul><li>Location is critical to attract the target market </li></ul></ul><ul><ul><li>Central business districts </li></ul></ul><ul><ul><li>Shopping centres </li></ul></ul><ul><ul><ul><li>Regional </li></ul></ul></ul><ul><ul><ul><li>Neighbourhood </li></ul></ul></ul><ul><ul><li>Power centres </li></ul></ul>Figure 14.1
  8. 8. Future of Retailing <ul><li>Wheel of retailing concept: </li></ul><ul><ul><li>New types of retailers begin as low-margin, low-price, and low-status operations, but </li></ul></ul><ul><ul><li>Evolve into higher-priced, higher-service operations, </li></ul></ul><ul><ul><li>Eventually becoming like the conventional retailers they replaced </li></ul></ul><ul><li>Other trends: </li></ul><ul><ul><li>Growth of non-store retailing </li></ul></ul><ul><ul><li>Retailer convergence </li></ul></ul><ul><ul><li>Rise of megaretailers </li></ul></ul><ul><ul><li>Importance of technology </li></ul></ul><ul><ul><li>Global expansion </li></ul></ul><ul><ul><li>Retail stores as communities </li></ul></ul>
  9. 9. Wholesaling <ul><li>Wholesaling: all activities involved in selling goods and services to those buying for resale or business use </li></ul><ul><ul><li>Buy mostly from producers and resell to retailers, industrial consumers and other wholesalers </li></ul></ul><ul><ul><li>Perform some or all of the following functions: </li></ul></ul><ul><ul><ul><li>Selling and promoting </li></ul></ul></ul><ul><ul><ul><li>Buying and assortment building </li></ul></ul></ul><ul><ul><ul><li>Bulk breaking </li></ul></ul></ul><ul><ul><ul><li>Warehousing </li></ul></ul></ul><ul><ul><ul><li>Transportation </li></ul></ul></ul><ul><ul><ul><li>Financing </li></ul></ul></ul><ul><ul><ul><li>Risk bearing </li></ul></ul></ul><ul><ul><ul><li>Market information </li></ul></ul></ul><ul><ul><ul><li>Management services and advice </li></ul></ul></ul>
  10. 10. Types of Wholesalers <ul><li>Merchant wholesalers: </li></ul><ul><ul><li>Full-service wholesalers </li></ul></ul><ul><ul><li>Wholesale merchants </li></ul></ul><ul><ul><li>Industrial distributors </li></ul></ul><ul><ul><li>Limited service wholesalers: </li></ul></ul><ul><ul><ul><li>Cash-and-carry wholesalers </li></ul></ul></ul><ul><ul><ul><li>Truck jobbers </li></ul></ul></ul><ul><ul><ul><li>Drop shippers </li></ul></ul></ul><ul><ul><ul><li>Rack jobbers </li></ul></ul></ul><ul><ul><ul><li>Producers’ cooperatives </li></ul></ul></ul><ul><ul><ul><li>Mail-order wholesalers </li></ul></ul></ul><ul><li>Brokers and agents: </li></ul><ul><ul><li>Brokers </li></ul></ul><ul><ul><li>Agents: </li></ul></ul><ul><ul><ul><li>Manufacturer’s agents </li></ul></ul></ul><ul><ul><ul><li>Selling agents </li></ul></ul></ul><ul><ul><ul><li>Purchasing agents </li></ul></ul></ul><ul><ul><ul><li>Commission merchants </li></ul></ul></ul><ul><li>Manufacturers’ sales branches and offices </li></ul><ul><li>Purchasing offices </li></ul>
  11. 11. Wholesaler Marketing Decisions <ul><li>Wholesalers are challenged by increased competition, demanding customers, new technologies, and more direct-buying by large customers </li></ul><ul><li>Must choose target markets carefully, looking for more profitable customers to build relationships with </li></ul><ul><li>Product lines carried are chosen for profitability </li></ul><ul><li>Price competition squeezes gross margins to very low </li></ul><ul><li>Not promotion -minded </li></ul><ul><li>Locations are more industrial </li></ul>Figure 14.2
  12. 12. Trends in Wholesaling <ul><li>Fierce resistance to price increases </li></ul><ul><li>Consolidation of suppliers </li></ul><ul><li>Survival tactics: </li></ul><ul><ul><li>Focusing on adding value </li></ul></ul><ul><ul><li>Achieving cost efficiencies </li></ul></ul><ul><ul><li>Looking for opportunities to partner with suppliers and customers </li></ul></ul><ul><ul><li>Differentiate by services offered </li></ul></ul><ul><ul><li>Global orientation </li></ul></ul>
  13. 13. In Conclusion… <ul><li>The learning objectives for this chapter were: </li></ul><ul><ul><li>Explain the roles of retailers and wholesalers in the marketing channel </li></ul></ul><ul><ul><li>Describe the major types of retailers and give examples of each </li></ul></ul><ul><ul><li>Identify the major types of wholesalers and give examples of each </li></ul></ul><ul><ul><li>Explain the marketing decisions facing retailers and wholesalers </li></ul></ul>

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