1. Retailing

2. What is Retailing?

• Retailing includes all the activities involved in selling products or services directly to final consumers for their personal, non-business use.

3. Types of Retailers Retailers are classified based on: Amount of Service They Offer Breadth & Depth of Product Lines Relative Prices Charged How They Are Organized

4. 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 because they carry more shopping goods about which customers need information.

• Full-Service Retailers:

• • Usually carry more specialty goods for which customers like to be waited on.

5. Product Line Classification Specialty Stores: Carry narrow product lines with deep assortments within those lines, e.g jewelry, Books stores ,sports goods Department Stores: Carry a wide variety of product linestypically clothing, home furnishings, and household goods. Each line is operated as a separate department managed by specialist buyers or merchandisers. E.g- akbarallys Single line-shopper stop Limited line- raymonds Super speciality-all brands

6. Product Line Classification Supermarket: Large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of food, laundry, and household products. e.g- foodland & garware Convenience Stores: Small stores located near residential areas that are open long hours 7 days a week and carry a limited line of high-turnover convenience goods.

7. Web-Based Supermarket In the battle for share of stomachs, Safeway and many large supermarkets have added Web-based sales.

8. Product Line Classification Superstores: Much larger than regular supermarkets and offer a large assortment of routinely purchased food products, nonfood items, and services. Offer dry cleaning, shoe repair Category Killers: Giant specialty stores that carry a very deep assortment of a particular line and is staffed by knowledgeable employees. e.g toys R U, home depot

9.

• What type of impact did the emergence of category killers have on department stores?

Discussion Question

10. Relative Prices Classification

• Discount Store:

• A retail institution that sells standard merchandise

• at lower prices by accepting lower margins and

• selling at higher volume. e.g walmart, big bazaar

• Sells goods at discounted price

• Carries national brands

• Operational costs r min. as self service & no frills

• Location in low rent areas, it draws customers

• from distant areas

11.

• Off-Price Retailer:

• Retailer that buys at less-than-regular wholesale

• prices and sells at less than retail. Examples are

• factory outlets, independents, and warehouse

• clubs.

Factory Outlet: Off-price retailing operation that is owned and operated by a manufacturer and that normally carries the manufacturers surplus, discontinued, or irregular goods. Independent Off-Price Retailer: Off-price retailer that is either owned and run by entrepreneurs or is a division of a larger retail operation.

12. Factory Outlets Factory outlet malls and value-retail centers have blossomed in recent years, making them one of retailings hottest growth areas.

13. Relative Prices Classification Warehouse Club: Off-price retailer that sells a limited selection of brand-name grocery items, appliances, clothing, at deep discounts to members who pay annual membership fees.

14. Organizational Classification Chain Stores: Two or more outlets that are owned and controlled, have central buying and merchandising, and sell similar lines of merchandise. Voluntary Chain: A wholesaler-sponsored group of independent retailers that engages in bulk buying and common merchandising.

15. Organizational Classification Retailer Cooperative: A group of independent retailers that bands together to set up a jointly owned, central wholesale operation and conducts joint merchandising and promotion efforts. Franchise: A contractual association between a manufacturer, wholesaler, or service organization (a franchiser) and independent businesspeople (franchisees) who buy the right to own and operate one or more units in the franchise system.

16. Franchising Franchisees now command 35% of all retail sales in the U.S. Subway is one of the fastest growing franchises, with nearly 20,000 shops in 74 countries.

17. Retailer Marketing Decisions

18. Price, Promotion, & Place Decisions Price policy must fit its target market and positioning, product and service assortment, and competition Can use any or all of the promotion toolsadvertising, personal selling, sales promotion, public relations, and direct marketingto reach consumers Location-road infrastructure,power and public transport Visibility-ability to see the store,parking lo

19. Mall of America

• The Mall of America megamall contains:

• • Over 520 specialty stores

• • 49 restaurants

• • 7-acre indoor theme park

• • Underwater World featuring hundreds of marine specimens

• • A two-story miniature golf course.

20. Business model

• Low margin-high turnover

• • High operational efficiency

• • Economic drivers- high inventory turnover, low operating cost

• • Operating drivers- merchandise ,cost, sales productivity mgmt.

21. Trends in retailing

• New retails forms& combinations-gas stations include food stores

• Shorter life span

• Electronic age-non store retailing via mail, tv, phones

• Intertype competition-discount store vs deptt. Store

• Deptt. Stores gave way to malls

• Technology-Pcs for forecast, control inventory costs, scanning systems.

• Unique formats & strong brand positioning. Mc, gap

• Establishments provide people to congregate e.g tea shops, caf coffee day, book stores, pubs

22. Wholesaling

• Wholesaling includes all activities involved in selling goods and services to those buying for resale or business use.

• Difference b/w wholesalers & retailers

• • Less attention to promos, atmosphere, location then retailers

• • Transactions are larger ,cover large trade area

• • Govt. dealing will be different

23. Functions Provided by Wholesalers Selling & Promoting Buying & Assortment Building Bulk-Breaking Warehousing Transportation Financing Risk Bearing Market Information Management Services & Advice

24. Types of Wholesalers

• Merchant Wholesalers- independently owned business take title to merchandise they handle

• • Largest group of wholesalers

• • Account for 50% of wholesaling

• • Two broad categories:

• • • Full-service wholesalers

• • • Limited-service wholesalers

• • • • Cash n carry ,truck wholesalers, drop shippers, rack jobbers ,producers cooperatives, mail order wholesalers

25. Types of Wholesalers

• Brokers

• • Do not take title to goods, Perform fewer functions

• • Brokers bring buyers and sellers together

• • Paid by party who hired them

• • Do not carry inventory, no finance, risk

• • E.g food brokers, real estate, insurance

• Agents

• • Agents represent buyers or sellers on more permanent basis

• • Manufacturers agents written agreement on

• • • Pricing

• • • territories

• • • delivery, order procedure

• • Apparel, furniture, electrical goods

26. Types of Wholesalers

• Manufacturers Sales Branches and Offices

• • Wholesaling by sellers or buyers themselves rather than through independent wholesalers.

27. Wholesaling In Action

• Grainger is by far the worlds leading wholesaler of maintenance, repair, and operating supplies.

• 200,000 products,520 branches

• Satellite network

• Online ordering

28. Wholesaler Marketing Decisions

29.

30. Trends in Wholesaling Must Constantly Improve Services and Reduce Costs Distinction Between Large Retailers & Wholesalers is Blurry Will Continue to Increase the Services Provided to Retailers Wholesalers Are Now Going Global

31. 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.