Managing Wholesaling, Retailing

15 Managing Retailing, Wholesaling, and Logistics
Chapter Questions
What major types of marketing intermediaries occupy this sector? What marketing decisions do these marketing https://mail.google.com/mail/u/0/?ui=2&ik= intermediaries make? 5c009fcb21&view=att&th=143fd603486167 81&attid=0.1&disp=safe&realattid=7fd5be3 What are86fc7f35d_0.1&zw the major trends with marketing intermediaries? What does the future hold for private label brands?
Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e.
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Retailing
Retailing includes all the activities in selling goods or services directly to final consumers for personal, non-business use. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing. Any organization selling to final consumers whether it is a manufacturer, wholesaler, or retailer is doing retailing. It doesnt matter how the goods or services are sold (in person, by mail, telephone, vending machine, or on the Internet) or where (in a store, on the street, or in the consumers home). With about 6,000 products across 8 categories, Croma is the first large-format consumer electronics 15-3 Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the United States edition of Marketing Management, 14e. durables retailer with a pan-India presence.
Table 15.1 Major Retailer Types
Specialty store Department store Supermarket Convenience store
Discount store Off-price retailer Superstore Catalog showroom
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Specialty stores carry a narrow product line. Department stores carry several product lines. Supermarkets are large, low-cost, low-margin, highvolume, self-service store designed to meet total needs for food and household products. Convenience stores are small stores in residential area, often open 24/7, limited line of high-turnover convenience products plus takeout. Drug stores carry prescription and pharmacies, health and beauty aids, other personal care, small durable, miscellaneous items. Discount stores are standard or specialty 15-5 Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from merchandise; low-price, low-margin, high-volume the United States edition of Marketing Management, 14e.
Extreme value or hard-discount store carry a more restricted merchandise mix than discount stores but at even lower prices. Off-price retailers carry leftover goods, overruns, irregular merchandise sold at less than retail. Superstores are huge selling spaces, routinely purchased food and household items, plus services. Category killers carry a deep assortment in one category. 15-6 Copyright 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from
the United States edition of Marketing Management, 14e.
Hypermarkets are huge stores that combine supermarket, discount, and warehouse retailing. Catalog showrooms include a broad selection of high-markup, fast-moving, brandname goods sold by catalog at a discount.
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Levels of Retail Service
Self service Self selection Limited service Full service
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Retailers meet widely different consumer preferences for service levels and specific services. They position themselves as offering one of four levels of service. Self-service is the cornerstone of all discount operations. Many customers are willing to carry out their own locate-compare-select process to save money.
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Self-selection means that customers find their own goods, although they can ask for assistance. Limited service means these retailers carry more shopping goods and services such as credit and merchandise-return privileges. With full service, salespeople are ready to assist in every phase of the locate-compareselect process. Customers who like to be waited on prefer this type of store.
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Nonstore Retailing
1. Direct selling, also called multilevel selling and network marketing, is a multibillion-dollar industry, with hundreds of companies selling door-to-door or at home sales parties. 2. Direct marketing has roots in direct-mail and catalogue marketing; it includes telemarketing, television direct-response marketing, and electronic shopping. As people become more accustomed to shopping on the Internet, they are ordering a greater variety of goods and services from a wider range of Web sites. In the United States, online sales were estimated to be $210 billion in 2009, with travel being the biggest category ($80 billion). 15-11
3. Automatic vending offers a variety of merchandise, including impulse goods such as soft drinks, coffee, candy, newspapers, magazines, and other products such as hosiery, cosmetics, hot food, and paperbacks. Vending machines are found in factories, offices, large retail stores, gasoline stations, hotels, restaurants, and many other places. 4. Buying service is a storeless retailer serving a specific clienteleusually employees of large organizationswho are entitled to buy from a list of retailers that have agreed to give discounts in return for membership.
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Nonstore Retailing
Direct selling Direct marketing Automatic vending Buying service
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Table 15.2 Major Types of Corporate Retail Organizations
Corporate chain store Voluntary chain Retailer cooperative Consumer cooperative Franchise organization Merchandising conglomerate
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Franchising System
The franchisor owns a trade or service mark and licenses it to franchisees in return for royalty payments The franchisee pays for the right to be part of the system The franchisor provides its franchisees with a system for doing business
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Changes in the Retail Environment
New retail forms and combinations Competition between store-based and nonstore-based retailing Growth of giant retailers Decline of middle market retailers Growing investment in technology Global profile of major retailers Growth of shopper marketing
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Retailers Marketing Decisions
Target market Product assortment Procurement Prices Services
Store atmosphere Store activities Store experiences Communications Location
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Retailer Services Mix
Prepurchase services Postpurchase services Ancillary services
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Store Atmosphere and Experiences

Store atmosphere refers to the look and physical layout of the store, which make it hard or easy to move around
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Helping Stores to Sell
Keep shoppers in the store Honor the transition zone Dont make them hunt Make merchandise available to the reach and touch Note that men do not ask questions Remember women need space Make checkout easy
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Location Decision
Central business districts Regional shopping centers Community shopping centers Shopping strips Location within a larger store
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Private Label Brands
Private labels are ubiquitous Consumer accepts private labels Private-label buyers come from all socioeconomic strata Private labels are not a recessionary phenomenon Consumer loyalty shifts from manufacturers to retailers
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Wholesaling Functions
Selling and promoting Buying and assortment building Bulk breaking Warehousing
Transportation Financing Risk bearing Market information Management services and counseling
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Major Wholesaler Types
Merchant Full-service Limited-service Brokers and agents Manufacturers Specialized
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Supply Chain Management

Supply chain management starts before physical distribution and means strategically procuring the right inputs (raw materials, components, and capital equipment); converting them efficiently into finished products; and dispatching them to the final destinations.
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Market Logistics Planning
Deciding on the companys value proposition to its customers Deciding on the best channel design and network strategy Developing operational excellence Implementing the solution
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What Are Integrated Logistics Systems?

An integrated logistics system (ILS) includes materials management, material flow systems, and physical distribution, aided by information technology.
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Market Logistics
Sales forecasting Distribution scheduling Production plans Finished-goods inventory decisions Packaging
In-plant warehousing Shipping-room processing Outbound transportation Field warehousing Customer delivery and servicing
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Market Logistics Decisions
How should orders be handled? Where should stock be located? How much stock should be held? How should goods be shipped?
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Figure 15.1 Determining Optimal Order Quantity
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Transportation Factors
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For Review
What major types of marketing intermediaries occupy this sector? What marketing decisions do these marketing intermediaries make? What are the major trends with marketing intermediaries? What does the future hold for private label brands?
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15 Managing Retailing, Wholesaling, and Logistics

Table 15.1 Major Retailer Types

Specialty store Department store Supermarket Convenience store

Discount store Off-price retailer Superstore Catalog showroom

the United States edition of Marketing Management, 14e.

Levels of Retail Service

Self service Self selection Limited service Full service

Direct selling Direct marketing Automatic vending Buying service

Table 15.2 Major Types of Corporate Retail Organizations

Changes in the Retail Environment

Retailers Marketing Decisions

Target market Product assortment Procurement Prices Services

Store atmosphere Store activities Store experiences Communications Location

Retailer Services Mix

Prepurchase services Postpurchase services Ancillary services

Store Atmosphere and Experiences

Helping Stores to Sell

Private Label Brands

Major Wholesaler Types

Merchant Full-service Limited-service Brokers and agents Manufacturers Specialized

Supply Chain Management

Market Logistics Planning

What Are Integrated Logistics Systems?

Market Logistics Decisions

Figure 15.1 Determining Optimal Order Quantity

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