marketing mix (place)- retailing & wholesaling

1. Retailing
• Retailing:
 All activities involved in selling goods or
services directly to final consumers for their
personal, nonbusiness use.
• Most retailing is done by retailers, but
nonstore retailing has recently grown by
leaps and bounds.
 Nonstore retailing includes sales made via the
internet, direct mail, catalogs, telephone, and
other direct sales methods.

2. Types of Retailers
• The different types of retailers can be
classified based on:
The amount of service they offer.
The breadth and depth of product lines.
The relative prices charged.
How they are organized.

3. Types of Retailers
• Classification by the amount of service:
 Self-service retailers:
• Serve customers who are willing to perform their
own “locate-compare-select” process to save
money.
 Limited-service retailers:
• Provide more sales assistance as they carry more
shopping goods about which details are needed.
 Full-service retailers:
• Usually carry more specialty goods for which
customers need or want assistance or advice.

4. Types of Retailers
• Classification by length and breadth of
their product assortments:
 Specialty stores:
• Feature narrow product lines, with deep
assortments (e.g., Radio Shack).
 Department stores:
• Offer a wide variety of product lines of clothing,
home furnishings, household goods (e.g., Macy’s).
 Supermarkets:
• Usually carry a relatively large variety of low-cost,
low-margin groceries and consumables (e.g.,
Kroger, Safeway).

5. Types of Retailers
• Classification by length and breadth of
their product assortments:
 Convenience stores:
• Carry a limited line of high turnover convenience
goods (e.g., Circle K, 7-Eleven).
 Superstores:
• Much larger than regular supermarkets,
superstores offer a large assortment of routinely
purchased food goods, nonfood items, and
services (e.g., Wal-Mart Supercenter, Best Buy).
• Category killers are really giant specialty stores.

6. Types of Retailers
• Relative prices classification:
 Discount stores:
• Sell standard merchandise at lower prices and
margins, in return for higher volume.
 Off-price retailers:
• Buy merchandise at less-than-regular wholesale
prices which are sold at less than retail. Goods
include overruns, irregulars, and leftovers.
• Includes independent off-price retailers, factory
outlets and warehouse/wholesale clubs.

7. Types of Retailers
• Major types of retail organizations
include:
Corporate chain stores:
• Two or more outlets that are commonly
owned and controlled.
Voluntary chain:
• Wholesaler-sponsored group of
independent retailers engaged in group
buying and merchandising.

8. Types of Retailers
• Major types of retail organizations
include:
Retailer cooperative:
• Group of independent retailers who set up
a central buying organization and conduct
joint promotion efforts.
Franchise organization:
• Contractual association between a
franchisor and franchisees.

9. Retailer Marketing Decisions
• Retailer marketing mix:
Product and service assortment
Retail prices
Promotion
Distribution (location)

10. Retailer Marketing Mix Decisions
• Product and service assortment:
 Product assortment should differentiate the
retailer while matching target shoppers’
expectations.
 Services mix can help differentiate one
retailer from another (e.g., Home Depot’s
“how-to” classes for do-it-yourselfers).
 Store atmosphere is important as a unique
store experience can move customers to buy.
• Experiential retailing.

11. Retailer Marketing Mix Decisions
• Price decisions:
The price policy must fit with the target
market and positioning, the product and
service assortment, and the competition.
• Price promotions vs. EDLP
• “High-low” pricing

12. Retailer Marketing Mix Decisions
• Promotion decisions:
Retailers can use any or all of the
promotion tools—advertising, personal
selling, sales promotion, public relations,
and direct marketing—to reach
consumers.

13. Retailer Marketing Mix Decisions
• Place (distribution) decisions:
Location is the key to success.
Retailers can locate in:
• Central business districts.
• Regional shopping centers.
• Community shopping centers.
• Strip malls (neighborhood shopping center).
• Power centers.
• Lifestyle centers.

14. Wholesaling
• Wholesaling:
Includes all activities involved in selling
goods and services to those buying for
resale or business use.
• Wholesalers add value for producers
by performing one or more channel
functions.

15. Wholesaling
• Financing
• Risk bearing
• Market
information
• Management
services and
advice
• Selling and promoting
• Buying and assortment
building
• Bulk-breaking
• Warehousing
• Transportation
Functions performed by wholesalers:

16. Types of Wholesalers
• Merchant Wholesaler: an independently
owned wholesaler business that takes title
to the merchandise it handles.
 Largest group of wholesalers.
 Account for 50% of wholesaling.
 Two broad categories:
• Full-service wholesalers.
• Limited-service wholesalers.

17. Types of Wholesalers
• Brokers and agents:
 Do not take title to goods.
 Perform only a few functions.
 Specialize by product line or customer type.
• Brokers bring buyers and sellers together.
• Agents represent buyers on a more
permanent basis.
 Manufacturers’ agents are the most common
type of agent wholesaler.

18. Types of Wholesalers
• Manufacturers’ sales branches
and offices:
Involves wholesaling by sellers or
buyers themselves rather than through
independent wholesalers.

19. Trends in Wholesaling
• Need for ever greater efficiency.
• Demands for lower prices.
• Winnowing out of suppliers who are not
adding value based on cost and quality.
• Distinction between large retailers and
wholesalers continues to blur.
• Wholesalers will continue to increase the
services provided to retailers.
• Wholesalers are now going global.