13-1

13-1

PRINCIPLES OF MARKETING
Eighth Edition
Philip Kotler and Gary Armstrong

Chapter
Chapter 13
13
Retailing
Retailing and
and
Wholesaling
Wholesaling

Copyright 1999 Prentice Hall

What
What is
is Retailing?
Retailing?
13-2
13-2

All the activities involved in selling goods

or services directly to final consumers for
their personal, nonbusiness use.

Retailers - businesses whose sales come

primarily from retailing.

Retailers can be classified as:

Store retailers such as Home Depot, Sears,
Walmart
Nonstore retailers such as the mail, telephone,
and Internet.
Copyright 1999 Prentice Hall
 Copyright 1999 Prentice Hall
Retail
Retail Organizations
Organizations
Independent,
Independent,Corporate,
Corporate, or
or Contractual
Contractual
Ownership
OwnershipOrganization
Organization
Relative
Relative Prices
Prices
Pricing
PricingStructure
Structurethat
thatisisUsed
Used
by
bythe
the Retailer
Retailer
Product
Product Line
Line
Length
Lengthand
andBreadth
Breadthof
ofthe
theProduct
Product
Assortment
Assortment
Amount
Amount of
of Service
Service
Self-Service,
Self-Service,Limited-Service
Limited-Service and
and
Full-Service
Full-ServiceRetailers
Retailers
13-3
Stores
13-3
Classification of
Classification Retail Stores
of Retail
Classification
Classification By
By Product
Product Line
Line
13-4
13-4

Store Type Length and Breadth of Product

Assortment
Specialty
SpecialtyStores
Stores Narrow
NarrowProduct
ProductLine,
Line,Deep
DeepAssortment
Assortment

Department Wide
WideVariety
Varietyof
ofProduct
ProductLines
Linesi.e.
i.e.Clothing,
Clothing,
DepartmentStores
Stores Home
Home Furnishings, & HouseholdItems
Furnishings, & Household Items
Supermarkets Wide
WideVariety
Varietyof
ofFood,
Food,Laundry,
Laundry,&&Household
Household
Supermarkets Products
Products
Convenience Limited
LimitedLine
Lineof
ofHigh-Turnover
High-TurnoverConvenience
Convenience
ConvenienceStores
Stores Goods
Goods
Superstores Large
LargeAssortment
Assortmentof ofRoutinely
RoutinelyPurchased
Purchased
Superstores Food
Food & Nonfood Products, PlusServices
& Nonfood Products, Plus Services
Category Giant
GiantSpecialty
SpecialtyStore
Storethat
thatCarries
CarriesaaVery
Very
CategoryKillers
Killers Deep Assortment of a Particular Line
Deep Assortment of a Particular Line
Hypermarkets
Hypermarkets Huge
HugeSuperstores
Superstores

Copyright 1999 Prentice Hall

 Copyright 1999 Prentice Hall
Retailer
Retailer
Cooperatives
Cooperatives
Voluntary
Voluntary Franchise
Organizations Franchise
Chains
Chains Organizations
Retail Organizations
Corporate
Corporate Merchandising
Merchandising
Chains
Chains Conglomerates
Conglomerates
Organization
Organization
13-5
13-5
Classification By
Classification Retail
By Retail
 Copyright 1999 Prentice Hall
Continuous
Continuous Higher
Higher
Relationship
Relationship Response
Response
Marketing
Marketing
Immediate
Immediate Testing
Testing
Direct
Direct
Orders
Orders of
of
Characteristics
Characteristics
Customized
Customized Key
Key Response
Response
Offer
Offer Measurement
Measurement
Targeted
Targeted
Individuals Privacy
Privacy
Individuals Marketing
Marketing
13-6
Direct
13-6
of Direct
Characteristics of
Characteristics
 Copyright 1999 Prentice Hall
Home
Home &
& Office
Office Parties
Parties
Online
Online Shopping
Shopping
TV
TV Shopping
Shopping Shows
Shows
Catalogs
Catalogs &
& Direct
Direct Mail
Mail
Automatic
Automatic Vending
Vending
Direct
Direct Selling
Selling
Direct
Direct Marketing
Marketing
Purchases, and May Account for 33% of All Sales by 2000.
Nonstore Retailing Accounts for More Than 14% of All Consumer
13-7
Retailing
13-7
Types of
Types NonStore Retailing
of NonStore
Retailer
Retailer Marketing
Marketing Decisions
13-8
Decisions
13-8

Retailer
RetailerMarketing
Marketing
Mix
Mix
Retailer
Retailer Strategy
Strategy
Product and
Service
Target Market Assortment

Retail Store Prices

Positioning

Promotion

Place (Location)

Copyright 1999 Prentice Hall

 Copyright 1999 Prentice Hall
Stores
StoresAtmosphere
Atmosphere
Physical
PhysicalLayout
Layout
Feel
FeelThat
ThatSuits
Suitsthe
theTarget
TargetMarket
Market
and
andMoves
MovesCustomers
CustomerstotoBuy
Buy
Services
ServicesMix
Mix
Key
KeyTool
Toolof
ofNonprice
NonpriceCompetition
Competition
for
forSetting
SettingOne
OneStore
StoreApart
ApartFrom
From
Another.
Another.
Product
ProductAssortment
AssortmentDecisions
Decisions
Width
Widthand
andDepth
DepthofofAssortment
Assortment
Quality
Qualityof
ofProducts
Products
Product
ProductDifferentiation
DifferentiationStrategies
Strategies
Decisions
Services Decisions
Services
13-9
Retailers
Click Product
add and
13-9
Retailers
Click Product
to add
to title Assortment and
title Assortment
Click
Click to
to add
Retailers
Retailersadd title
Price,
Price, Promotion,
Promotion, and
title and
13-10
13-10

Place
Place Decisions
Decisions

Price
Price Decisions
Decisions
Target
Target Market
Market
Product
Product &
& Services
Services Assortment
Assortment
Competition
Competition

Promotion
Promotion Decisions
Decisions
Using
Using Advertising,
Advertising, Personal
Personal Selling,
Selling,
Sales
Sales Promotion
Promotion and
and Public
Public
Relations
Relations to
to Reach
Reach Customers.
Customers.

Place
Place Decisions
Decisions
Shopping
Shopping Centers,
Centers, CentralCentral Business
Business
Districts,
Districts, Power
Power Centers,
Centers, or or Outlet
Outlet
Copyright 1999 Prentice Hall
Malls. Location!
The
The Wheel
Wheel of
of Retailing
Retailing
13-11
13-11

High Margin
High Price
High Status

11
33
22
22 33 Low Margin
Low Price
Low Status
11
11 11== Discount
Discount
22== Superstore
Superstore
22 33 44 33== Warehouse
WarehouseClub
Club
44== Combination
CombinationStore
Store

Copyright 1999 Prentice Hall

 Copyright 1999 Prentice Hall
Retail
Retail Stores
Stores as
as Communities
Communities
or
or Hangouts
Hangouts
Global
Global Expansion
Expansion of
of Major
Major Retailers
Retailers
Growing
Growing Importance
Importance of
of
Retail
Retail Technology
Technology
Rise
Rise of
of Megaretailers
Megaretailers
Increasing
Increasing Intertype
Intertype Competition
Competition
Growth
Growth of
of Nonstore
Nonstore Retailing
Retailing
New
New Retail
Retail Forms
Forms and
and Shortening
Shortening
Retail
Retail Lifecycles
Lifecycles
13-12
Retailing
13-12
The Future
The of Retailing
Future of
What
What is
is Wholesaling?
Wholesaling?
13-13
13-13

All the activities involved in

selling goods and services to
those buying for resale or
business use.

Wholesaler - those firms

engaged primarily in wholesaling
activity.

Copyright 1999 Prentice Hall

 Copyright 1999 Prentice Hall
Transporting
Transporting
Warehousing
Warehousing Financing
Financing
Bulk
BulkBreaking
Breaking
Functions Risk
RiskBearing
Bearing
Buying
Buyingand
and Market
Market
Wholesaler
Assortment
AssortmentBuilding
Building Information
Information
Selling
Sellingand
and Management
Management
Promoting
Promoting Services
Services&&Advice
Advice
or More of the Following Channel Functions:
Wholesalers are Often Better at Performing One
13-14
13-14
are Wholesalers
Why are
Why Used?
Wholesalers Used?
Types
Types of
of Wholesalers
Wholesalers
13-15
13-15

Merchant
Merchant
Wholesaler Brokers/
Brokers/ Agents
Agents
Wholesaler
They
TheyDont
DontTake
TakeTitle
Titleto
to
Independently
IndependentlyOwned
Owned the
theGoods,
Goods,and
andThey
They
Business
BusinessthatthatTakes
Takes Perform
PerformOnly
OnlyaaFew
Few
Title
Titleto
tothe
the Functions.
Functions.
Merchandise
Merchandise
ititHandles.
Handles.
Manufacturers
Manufacturers
Sales
Sales Branches
Branches
and
and Offices
Offices
Wholesaling
Wholesalingby
bySellers
Sellers
or
orBuyers
BuyersThemselves
Themselves
Rather
RatherThan
ThanThrough
Through
Independent
Independent
Wholesalers.
Wholesalers.

Copyright 1999 Prentice Hall

Wholesaler
Wholesaler Marketing
Marketing Decisions
13-16
Decisions
13-16

Wholesaler
WholesalerMarketing
Marketing
Mix
Mix
Wholesaler
Wholesaler Strategy
Strategy
Product and
Service
Target Market
Assortment

Retail Store
Prices
Positioning

Promotion

Place (Location)

Copyright 1999 Prentice Hall

 Copyright 1999 Prentice Hall
Global
GlobalExpansion
Expansion
Vertical
VerticalIntegration
IntegrationWill
WillRemain
RemainStrong
Strong
Surviving
SurvivingWholesalers
WholesalersWill
Will Grow
Grow Larger
Larger
Through
ThroughAcquisitions
Acquisitionsand
and Mergers
Mergers
Increasing
Increasing Consolidations
ConsolidationsWill
WillReduce
Reduce
Number
Number of
ofWholesalers
Wholesalers
Must
MustLearn
LearntotoCompete
CompeteEffectively
EffectivelyOver
Over
Wider
Wider and
andMore
MoreDiverse
DiverseAreas
Areas
Wholesaling Developments to Consider
13-17
Wholesaling
13-17
in Wholesaling
Trends in
Trends