KM
no1knows
13_-_retailing_and_wholesaling.ppt13
Review of Last Class…
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Pricing Strategies
- New-Product Pricing Strategies
- Product Mix Pricing Strategies
- Price Adjustment Strategies
- Price Changes
Topic Outline
Check this
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Marketing Channels: Delivering Customer Value
- Supply Chains and the Value Delivery Network
- The Nature and Importance of Marketing Channels
- Channel Behavior and Organization
- Channel Design Decisions
- Channel Management Decisions
- Public Policy and Distribution Decisions
- Marketing Logistics and Supply Chain Management
Topic Outline
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Chapter 13- slide *
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
Chapter Thirteen
Retailing and Wholesaling
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Today’s Class
- Retailing (Chapter 13)
- Check Grade Sheet
- “Keven’s Career Path” Mini-Lecture
- In-Class Writing Exercise
- Next Class: Midterm II
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Retailing and Wholesaling
- Retailing
- Retailer Marketing Decisions
- The Future of Retailing
- Wholesaling
Topic Outline
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Retailing includes all the activities in selling products or services directly to final consumers for their personal, non-business use
Retailers are businesses whose sales come primarily from retailing
Retailing
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Retailing
- Amount of service
- Self-service
- Limited service
- Full service
Types of Retailers
Self-service retailers serve customers who are willing to perform their own locate-compare-select process to save money. They include: Wal-Mart and Supermarkets.
Limited service retailers provide more sales assistance because they carry more shopping goods about which customers need more information. Examples include Sears and JC Penney.
Full-service retailers assist customers in every phase of the shopping process, resulting in higher costs that are passed on to the customer as higher prices. Includes department stores and specialty stores
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Retailing
Product Line
Note to Instructor
Discussion Question
What are examples of these types of stores?
It might be difficult, depending on their geographic region, to find examples of superstores. Ask them where they would rather shop for a computer, a department store like Wal-Mart or a category killer like Best Buy? Why?
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Retailing
Types of Retailers
Relative Prices
Note to Instructor
Discount stores sell standard merchandise at lower prices by accepting lower margins and selling higher volume.
Independent off-price retailers either are owned and run by entrepreneurs or are divisions of larger retail corporations.
Off-price retailers buy at less-than-regular wholesale prices and charge customers less than retail.
Factory outlets are producer-operated stores. The link on this slide is to a Premium Factory Outlet mall. Students are probably familiar with these types of shopping locations.
Warehouse clubs are large warehouse-like facilities with few frills and offer ultra-low prices.
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Retailing
Types of Retailers
Organizational Approach
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Retailing
Corporate chains are two or more outlets that are commonly owned and controlled
- Size allows them to buy in large quantities at lower prices and gain promotional economies
- Sears
- CVS
Types of Retailers
Organizational Approach
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Retailing
Voluntary chains are wholesale-sponsored groups of independent retailers that engage in group buying and common merchandising
- IGA
- Western Auto
Types of Retailers
Organizational Approach
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Retailing
Retailer cooperatives is a group of independent retailers that band together to set up a joint-owned, central wholesale operation and conduct joint merchandising and promotion effort
- Ace Hardware
- Associated Grocers
Types of Retailers
Organizational Approach
Note to Instructor
This link is to the homepage for Ace Hardware. Students are likely to be familiar with the brand but not know that many stores are individually owned and operated (although they might know this phrase). You can view the site for information specific to owners.
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Retailing
Types of Retailers
Organizational Approach
Franchise organizations are based on some unique product or service; on a method of doing business; or on the trade name, good will, or patent that the franchisor has developed
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Retailing
- Merchandising conglomerates are corporations that combine several retailing forms under central ownership
- Limited Brands
Types of Retailers
Organizational Approach
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Retailing
Retailer Marketing Decisions
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Retailing
Segmentation targeting, differentiation, and positioning involves the definition and profile of the market so the other retail marketing decisions can be made
Retailer Marketing Decisions
Note to Instructor
This is a good time to visit the Web site for Trader Joe’s. Ask the students who they target and how they position their business. You can also ask students how this is different that Whole Foods which is discussed in the text.
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Retailing
Product assortment and service decisions include:
- Product assortment
- Services mix
- Store atmosphere
Retailer Marketing Decisions
Product Assortment and Service
Note to Instructor
Product assortment should differentiate the retailer while matching target shoppers’ expectations. Offers merchandise that no other competitor carries:
Private or national brands
Merchandising events
Highly targeted product assortment
Services mix should also serve to differentiate the retailer from the competition with customer support.
Store atmosphere is the physical layout that makes moving around the store hard or easy.
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Retailing
Price policy must fit the target market and positioning, product and service assortment, and competition
Retailer Marketing Decisions
Price Decision
- High markup on lower volume
- Low markup on higher volume
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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 Decisions
Price Decision
Note to Instructor
Discussion Question
Why would a retailer engage in high-low pricing?
In most cases it is to increase store traffic, clear out unsold merchandise, create a low price image, or attract customers who will buy other goods at full price.
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Retailing
Retailer Marketing Decisions
Promotion Decision
Note to Instructor
Ask students for examples of retailers that advertise heavily. They might even be able to mention a local retailer whose ads they seem to constantly see on television. Local furniture stores and car dealers invest heavily on local television.
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Retailing
Central business districts are located in cities and include department and specialty stores, banks, and movie theaters
Shopping center is a group of retail businesses planned, developed, owned, and managed as a unit
Retailer Marketing Decisions - Place Decision
Note to Instructor
Central business districts are declining. Students might even be able to cite examples in their home town where shopping centers are being built but central business districts are failing to thrive. Shopping centers can be:
Regional shopping centers
Community shopping centers
Neighborhood shopping centers
Power center
Lifestyle centers
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Retailing
Retailers have to consider:
- Non-store retailing
- Retail convergence
- Megaretailers
- Retail technology
- Global expansion
- Retail stores as communities
The Future of Retailing
Note to Instructors
Discussion Question
Are there retailers (coffee shops, restaurants) where you tend to hang out with their friends or to sit for a long time? How does the retailer creates this environment? Is it good for the retailer?
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Retailing
Wheel-of-retailing concept states that many new types of retailing forms begin as low-margin, low-price, low-status operations, and challenge established retailers. As they succeed they upgrade their facilities and offer more services, increasing their costs and forcing them to increase prices, eventually becoming the retailers they replaced.
The Future of Retailing
New Retail Forms and Shortening Retail Life Cycles
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Retailing
Growth of non-store retailing includes:
- Mail order
- Television
- Phone
- Online
The Future of Retailing
New Retail Forms and Shortening Retail Life Cycles
Note to Instructor
Discussion Question
What percent of your purchases are online? Why is it low for some types of products?
It might be surprising to see that for certain categories it is very high but for others it remains low. You can ask why they differ by category. It might include shipping costs, need to try the product, size, impulse purchase, etc.
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Retailing
Retail convergence involves the merging of consumers, producers, prices, and retailers, creating greater competition for retailers and greater difficulty differentiating offerings
The Future of Retailing
New Retail Forms and Shortening Retail Life Cycles
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Retailing
The rise of megaretailers involves the rise of mass merchandisers and specialty superstores, the formation of vertical marketing systems, and a rash of retail mergers and acquisitions
- Superior information systems
- Buying power
- Large selection
The Future of Retailing
New Retail Forms and Shortening Retail Life Cycles
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Retailing
Growing importance of retail technology provides better forecasts, inventory control, electronic ordering, transfer of information, scanning, online transaction processing, improved merchandise handling systems, and the ability to connect with customers
The Future of Retailing
New Retail Forms and Shortening Retail Life Cycles
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Five-Minute Drill
- Identify a New Retail Opportunity…
- Why it Will Work
- Target Customer
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Wholesaling
Wholesaling includes all activities involved in selling goods and services to those buying for resale or business use
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Wholesaling
Selling and promoting involves the wholesaler’s sales force helping the manufacturer reach many smaller customers at lower cost
Buying assortment building involves the selection of items and building of assortments needed by their customers, saving the customers work
Wholesaling
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Wholesaling
Bulk breaking involves the wholesaler buying in larger quantity and breaking into smaller lots for its customers
Warehousing involves the wholesaler holding inventory, reducing its customers’ inventory cost and risk
Wholesaling
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Wholesaling
Transportation involves the wholesaler providing quick delivery due to its proximity to the buyer
Financing involves the wholesaler providing credit and financing suppliers by ordering earlier and paying on time
Wholesaling
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Wholesaling
Risk bearing involves the wholesaler absorbing risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence
Market information involves the wholesaler providing information to suppliers and customers about competitors, new products, and price developments
Wholesaling
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Wholesaling
Management services and advice involves wholesalers helping retailers train their sales clerks, improve store layouts, and set up accounting and inventory control systems
Wholesaling
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Wholesaling
Types of Wholesalers
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Wholesaling
Merchant wholesalers is the largest group of wholesalers and include:
- Full-service wholesalers who provide a full set of services
- Limited service wholesalers who provide few services and specialized functions
Types of Wholesalers
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Wholesaling
Brokers and agents do not take title, perform a few functions, and specialize by product line or customer type
- Brokers bring buyers and sellers together and assist in negotiations
- Agents represent buyers or sellers
Types of Wholesalers
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Wholesaling
Manufacturers’ sales branches and offices is a form of wholesaling by sellers or buyers themselves rather than through independent wholesalers
Types of Wholesalers
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Wholesaling
Wholesaler Marketing Decisions
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Wholesaling
Target market and positioning decisions
- Size of customer
- Type of customer
- Need for service
Wholesaler Marketing Decisions
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Wholesaling
Marketing mix decisions
- Product
- Price
- Promotion
- Place
Wholesaler Marketing Decisions
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Wholesaling
Challenges
- Resistance to price increases
- Lack of suppliers
- Changing customer needs
- Adding value by increasing efficiency and effectiveness
Trends in Wholesaling
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BA 310
Keven’s Career Path Mini-Lecture
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In-Class Writing Exercise
- What Do You “Collect?”
- One Thing You Can Do to Improve Your “Collection”
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Next Class…
- Midterm II
- Chapters 7-13
- 50 Questions (Multiple Choice)
- 60 Minutes
- Good Luck!
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