retailing and wholesaling

Retailing and Wholesaling

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Retailing

• Retailing• All activities involved in selling goods or services

directly to final consumers for their personal, non-business use.

• Retailer• Business whose sales come primarily from

retailing.

Table 13.1Major Store Retailer Types

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Retailing

• Amount of service

• Product lines

• Relative prices

• Organizational approach

• Self-service retailers• Customers are willing to self-

serve to save money• Discount stores

• Limited-service retailers• Most department stores

• Full-service retailers• Salespeople assist customers

in every aspect of shopping experience

• High-end department stores• Specialty stores

Retailers Are Classified By:

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Retailing


• Product lines

• Relative prices


• Specialty stores• Narrow product lines with

deep assortments

• Department stores• Wide variety of product lines

• Supermarkets

• Convenience stores• Limited line

• Superstores• Food, nonfood, and services

• Category killers• Giant specialty stores


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Retailing


• Product lines

• Relative prices


• Discount stores• Low margins are offset by

high volume

• Off-price retailers• Independent off-price

retailers• Mydin, EconSave.

• Factory outlets• Bata, Reebok

• Warehouse clubs• Sam’s Club, Costco


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Retailing


• Product lines

• Relative prices


• Corporate chain stores• Commonly owned / controlled

• Voluntary chains• Wholesaler-sponsored groups

of independent retailers

• Retailer cooperatives• Groups of independent

retailers who buy in bulk

• Franchise organizations• Based on something unique

• Merchandising conglomerates• Diversified retailing lines and

forms under central ownership


Price policy must fit the target market and positioning, product and service assortment, and competition

Retailer Marketing DecisionsPrice Decision

• High markup on lower volume

• Low markup on higher volume

Retailing

High-low pricing involves charging higher prices on an everyday basis, coupled with frequent sales and other price promotions

Everyday low price (EDLP) involves charging constant, everyday low prices with few sales or discounts

Retailer Marketing DecisionsPrice Decision

Retailing

Growth of non-store retailing includes:

• Mail order

• Television

• Phone

• Online

The Future of RetailingNew Retail Forms and Shortening Retail Life Cycles

Retailing

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Wholesaling

• Wholesaling• All activities involved in selling goods and

services to those buying for resale or business use.

• Wholesaling• A firm engaged primarily in wholesaling activity.

Selling and promoting

Buying assortment building

Bulk breaking

Warehousing

Transportation

Financing

Risk bearing

Market information

Management services and advice

WholesalingWholesaling includes all activities involved in selling goods and services to those buying for resale or

business use

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Wholesaling

• Merchant Wholesalers

• Brokers and Agents • Manufacturers’ and

retailers’ branches and offices

• Full-service wholesalers• Wholesale merchants• Industrial distributors

• Limited-service wholesalers• Cash-and-carry wholesalers• Truck wholesalers (jobbers)• Drop shippers• Rack jobbers• Producer’s cooperatives• Mail-order wholesalers

Types of Wholesalers

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Wholesaling




• Brokers• Bring buyers and sellers

together and assist in negotiation

• Agents• Manufacturers’ agents• Selling agents• Purchasing agents• Commission merchants


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Wholesaling




• Sales branches and offices• Branches carry inventory:

lumber, auto equipment, parts

• Offices do not carry inventory: dry goods

• Purchasing officers• Perform roles similar to

brokers and agents, however these individuals are employees of the organization


Promotion StrategyTopic 8

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Topic Outline

• The promotion mix.

• Integrated marketing communications.

• A view of the communication process.

• The promotion mix is the specific blend of advertising, public relations, personal selling, and direct-marketing tools that the company uses to persuasively communicate customer value and build customer relationships

The Promotion Mix

The Promotion Mix

Major Promotion Tools

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Marketing Communication / Promotion Mix

Any paid form of nonpersonal presentation and promotion by an identified sponsor

Personal presentation to make sales and build customer relationships

Building good relations with publics by obtaining favorable

unpaid publicity

Direct connections with carefully

targeted individual customers to

obtain immediate response and

cultivate lasting relationships

Short-term incentives to encourage purchase or sale of

a product or service

Advertising

Direct Marketing

Public Relations Sales Promotion

Personal Selling

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Setting the Promotional Mix

• Advertising

• Personal Selling

• Sales Promotion

• Public Relations

• Direct Marketing

• Reaches large, geographically dispersed audiences, often with high frequency

• Low cost per exposure, though overall costs are high

• Consumers perceive advertised goods as more legitimate

• Dramatizes company/brand

• Builds brand image; may stimulate short-term sales

• Impersonal; one-way communication

• Major media types: Newspaper, Radio, TV, magazines, direct mail, outdoor, Internet

Promotion Tools

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• Advertising


• Sales Promotion



• Most effective tool for building buyers’ preferences, convictions, and actions

• Personal interaction allows for feedback and adjustments

• More effective than advertising in complex selling situation

• Relationship-oriented• Buyers are more attentive• Sales force represents a long-term

commitment• Most expensive of the promotional

tools• The sales force works to produce

customer satisfaction and company profit.

Promotion Tools

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• Advertising


• Sales Promotion



• May be targeted at the trade or ultimate consumer

• Makes use of a variety of formats: premiums, coupons, contests, etc.

• Attracts attention, offers strong purchase incentives, dramatizes offers, boosts sagging sales

• Stimulates quick response

• Short-lived

• Not effective at building long-term brand preferences

Promotion Tools

15 - 24

Consumer Promotion Tools

Sales Promotion

• Samples

• Cash Refunds (Rebates)

• Price packs (cents-off deals)

• Advertising Specialties

• Premiums

• Patronage Rewards

• Point-of-Purchase Communications

• Contests, Games, and Sweepstakes

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Trade Promotion Tools

Sales Promotion

• Discounts (price off, off-list, and off invoice)

• Allowances• Advertising allowances• Display allowances

• Free goods

• Push money

• Specialty advertising items

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Business Promotion Tools

Sales Promotion

• Includes many of the same tools used in consumer and trade promotions

• Two additional tools:• Conventions and trade shows• Sales contests

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• Advertising


• Sales Promotion



• Highly credible• Often the most underused element in

the promotional mix

• Many forms: news stories, news features, events and sponsorships, etc.

• Reaches many prospects missed via other forms of promotion

• Good public relations can be a powerful brand-building tool

• Advantages:• Strong impact on public

awareness at lower cost than advertising

• Greater credibility than advertising

Promotion Tools

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Public Relations Tools

Public Relations

• News• Speeches• Corporate Identity

Materials • Mobile

Marketing

• Special Events• Written Materials• Audiovisual

Materials• Public Service

Activities

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Public Relations Functions/Events

Public Relations

• Press Relations

• Product Publicity

• Public Affairs

• Lobbying• Investor

Relations• Development

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• Advertising


• Sales Promotion



• Many forms: Telephone marketing, direct mail, online marketing, etc.

• Four distinctive characteristics:

• Nonpublic• Immediate• Customized• Interactive

• Well-suited to highly targeted marketing efforts

Promotion Tools

Direct Marketing• Benefits of Direct Marketing

to Buyers• Convenient• Easy to use• Private• Access to a wealth of

information• Immediate • Interactive

• Benefits of Direct Marketing to Sellers

• Powerful tool for building relationships

• Allows for targeting of small groups or individuals with customized offers in a personalized fashion

• Offers access to buyers that couldn’t be reached via other channels

• Low-cost, effective alternative for reaching specific markets

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Forms of Direct Marketing

Direct Marketing

• Face-to-Face Selling

• Telemarketing• Direct-Mail

Marketing

• Catalog Marketing• Kiosk Marketing• Online Marketing

• Direct-Response TV Marketing

15 - 33

• Promotion Mix Strategies• Push strategy: trade promotions and personal

selling efforts push the product through the distribution channels.

• Pull strategy: producers use advertising and consumer sales promotions to generate strong consumer demand for products.


Promotion Mix Strategies

Setting the Total Promotion Budget and Mix

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• Integrated Marketing Communications• The concept under which a company carefully

integrates and coordinates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its products.

• IMC implementation often requires the hiring of a MarCom manager.

Integrated Marketing Communications

A View of the Communication Process

The Communication Process

retailing and wholesaling

Documents

low price image

everyday low prices

price policy

wholesaling retailing

growth of nonstore retailing

major store retailer

service assortment

frequent sales