12-1

Chapter 12

Retailing and Wholesaling

12-2

Road Map: Previewing the Concepts

Explain the roles of retailers and wholesalers in the distribution channel.Describe the major types of retailers and give examples of each.Identify the major types of wholesalers and give examples of each.Explain the marketing decisions facing retailers and wholesalers.

12-3

What is Retailing?

Includes all the Activities Involved in Selling Goods or Services Directly to Final Consumers for Their Personal, Nonbusiness Use.

12-4

RetailingRetailing can be done in stores (store retailing) or out of a store (nonstore retailing) such as:

Direct mail,Catalogs,Telephone,Home shopping shows, Internet.

12-5

Amount of Service

Self-Service, Limited-Service andFull-Service Retailer

Amount of Service

Self-Service, Limited-Service andFull-Service Retailer

Product LineLength and Breadth of the Product

Assortment

Product LineLength and Breadth of the Product

Assortment

Relative PricesPricing Structure that is Used

by the Retailer

Relative PricesPricing Structure that is Used

by the Retailer

Retail OrganizationsIndependent, Corporate, or

ContractualOwnership Organization

Classification of Retailing

12-6

Self-Service Self-Service RetailersRetailers

Provide Few or No Services to Shoppers

i.e. Best Buy

Limited-ServiceLimited-ServiceRetailersRetailers

Provide Only a Limited Number of Services

to Shoppers i.e. SearsFull-ServiceFull-Service

RetailersRetailers

Retailers that Provide a Full Range of Services

to Shoppersi.e. Neiman Marcus

Classification of Retailing:Amount of Service

12-7

Specialty Stores

Department Stores

Supermarkets

Convenience Stores

Superstores

Discount Stores

Narrow Product Line, Deep Assortment i.e. The Limited or

Athlete’s FootWide Variety of Product Lines i.e. Clothing, Home Furnishings i.e. Saks

Fifth AvenueWide Variety of Food, Laundry, & Household Products i.e. KrogerLimited Line of High-Turnover

Convenience Goods i.e. 7-ElevenLarge Assortment of Routinely

Purchased Food, Nonfood Products i.e. Target

Standard Merchandise at Lower Pricesi.e. Wal-Mart

Off-Price RetailersChanging Collection of Higher-Quality

Goods at a Reduced Price i.e. T.J. Maxx

Classification of Retailing:Product Line (Tab. 12-1)

Store Description

12-8

Giant superstores called category killers are an emerging trend. Answer the following questions:

How is a category killer different from other types of retailers? Why has this form of retailing grown so rapidly?

12-9

Voluntary Chain

Franchise Organizations

RetailerCooperatives

Merchandising Conglomerates

Classification of Retailing:Retail Organization

Corporate Chain

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Retailer Marketing Decisions (Fig. 12-1)

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Consider the following thought question, format an answer, pair with the student on your right, share your thoughts with one another, and respond to questions from the instructor.

How do retailers establish a position in the marketplace?

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Product Assortment• Brand of Merchandise• Merchandising Events• Product Differentiation StrategiesServices Mix

Key Tool of Nonprice Competition

for Setting One Store Apart From

AnotherStore’s Atmosphere• Physical Layout• “Feel” That Suits the Target Market and Moves Customers to Buy

Product Assortment and Services Decisions

12-13

Price Decisions

Target Market,

Product & Service

Assortment,Competition

Place Decisions

Shopping Centers, Central

Business Districts, Power

Centers, or Online

Shopping

Promotion Decisions

Using Advertising,

Personal Selling, Sales Promotion,

Public Relations, &

Direct Marketing to

Reach Customers

Retailer’s Price, Promotion, and Place Decisions

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Mall of AmericaThe Mall of America “megamall” contains more than:

520 specialty stores,49 restaurants, 7-acre indoor theme park, Underwater World featuring hundreds of marine specimens,And a two-story miniature golf course.

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The Future of RetailingNew Retail Forms and Shortening Retail Life-CyclesGrowth of Nonstore RetailingIncreasing Intertype CompetitionRise of the Megaretailers

Growing Importance of Retail TechnologyGlobal Expansion of Major RetailersRetail Stores as “Communities” or “Hangouts”

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What is Wholesaling?

Includes all the activities Involved in Selling Goods and Services to Those Buying for Resale or Business Use.

12-17

WholesalerFunctions

ManagementServices & Advice

ManagementServices & Advice Selling & PromotingSelling & Promoting

MarketInformation

MarketInformation

Buying &Assortment Building

Buying &Assortment Building

Risk BearingRisk Bearing Bulk-BreakingBulk-Breaking

TransportationTransportation

FinancingFinancing WarehousingWarehousing

Wholesalers are Often Better at Performing One or More of the Following Channel Functions:

Why are Wholesalers Used?

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Types of Wholesalers

Manufacturers’ Sales Branches and OfficesWholesaling by Sellers or

Buyers Themselves Rather Than Through

Independent Wholesalers.

Merchant WholesalerIndependently Owned

Business that Takes Title to the

Merchandise it Handles.

Agents & BrokersThey Don’t Take Title

to the Goods, and TheyPerform Only a Few

Functions.

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Wholesaler Marketing Decisions (Fig. 12-2)

12-20

Must Constantly Improve Their Services and Reduce CostsMust Constantly Improve Their Services and Reduce Costs

Distinction Between Large Retailers and Wholesalers BlursDistinction Between Large Retailers and Wholesalers Blurs

Wholesalers Will Continue to Increase the Services ProvidedWholesalers Will Continue to Increase the Services Provided

Wholesalers Are Beginning to Go GlobalWholesalers Are Beginning to Go Global

Trends in Wholesaling

12-21

Rest Stop: Reviewing the Concepts

Explain the roles of retailers and wholesalers in the distribution channel.Describe the major types of retailers and give examples of each.Identify the major types of wholesalers and give examples of each.Explain the marketing decisions facing retailers and wholesalers.