Retail Institutions

Marketing 7

Ownership

IndependentRetailers

IndependentRetailers

Chain StoresChain Stores

FranchisesFranchises

ClassificationClassificationof of

OwnershipOwnership

ClassificationClassificationof of

OwnershipOwnership

Types of Retailing

1. Food Retailer

2. General Merchandise Retailers

3. Nonstore Retailers

4. Service Retailing

Food Retailers

• Conventional Supermarkets– Is a self service food store offering groceries, meat and has a size of

under 20,000 square feet.

• Superstores – Are large supermarkets (20,000to 50,000sq ft)

• Supercenters– Are a combination of a supermarket and a general merchandise

discount store under one roof (150,000 sq ft)

• Warehouse Supermarkets– Are discount food retailers that offe merchandise in a no frills

environment

• Convenience Stores– Provides a limited variety and assortment of merchandise at a

convenient location in a 3,000 to 8,000 sq ft store with speedy check out

General Merchandise Retail Stores

• Department stores

• Discount Stores

• Specialty Stores

• Category Specialists / Killers

• Home Improvement Centers

• Warehouse Clubs

• Off Retailers Retailers

Catalogue retailing communicates via a catalogue (!) – history in rural communities – growth is slowing

Direct-mail communicates using letters/brochures – history in rural communities

Direct Sell retailing communicates through personal, face-to-face contact- stagnant growth

TV Home Shopping communicates via TV(!) – growth is stagnant

Vending Machines – growth is stagnant

Status of non-electronic non-store retailing

Shopping Comparison – Major Marketing Difference for Customer Relationship

(from retailer’s perspective)

In-store visit• Only captures

customer information if the customer buys something

• If the customer walks out of the store, no way of re-connecting with them

On-line visit• Can see which

items/categories a customer views, even if they do not buy anything

• Can get back in touch with the customer with suggested merchandise based on customer’s on-line journey through their site

What Can You Buy Now on the Internet?

Not much and it isn’t easy

Successful Internet retailers

­ Dell, Gateway Computers ( + software)

­ Amazon.Com

­ Travel Services

­ Gifts - 1-800-FLOWERS

­ Niche Products – Beauty products, wine

Factors Affecting the Diffusion of an Innovation

• Ease with which the innovation can be tried out– On-line access

• Perceived risks of adoption– Security, Privacy

• Perceived benefits compared to present alternatives (going to store or buying from catalogs)

Internet Applications for Store-based Retailers

• Building Brand Name and Store Image– Limited Reach and Frequency– Rational Versus Emotional Appeals– Managing Virtual Communities

• Pre-Shopping Information

• Selling Merchandise

Store-based Retailers Vs. Electronic Retail Entrepreneurs

• Knowledge of Retailing– Assortment Planning

– Distribution Systems

• Reputation

• Customer Database

• Convenient Locations for Picking Up, Returning

• Established Vendor Relationships

Winners and Losers

• Catalog Retailers Are Well Positioned

• Most Vendors Will Not Be Able to Effectively Selling Directly to Consumers

• Store-Based Retailers Have Strong Potential But Need to Exploit the Unique Benefits of Internet – Personalization – “Mass Customization”

Wholesaling

• the activity of selling to buyers for resale or to further their own business operations.

• It refers to the marketing activities associated with selling products to purchasers that resell the products, use them to make another product, or use them to conduct business activities.

Categories and Types of Wholesalers

• Categories– Merchant wholesalers

• Take title to products they resell, earnings from mark up

– Agents, Brokers, Commission Merchants

• Do not take title to products they resell earnings from commissions

– Manufacturers’ sales branches and offices

• Producer owned, to survive must add to producer profitability

• Types– Full service: General

Merchandise, limited line, rack jobbers

– Limited Functions: truck jobbers, drop shippers, cash and carry, catalog wholesalers

– Manufacturers’ agents, import & export agents, brokers, commission merchants, auction companies

– Sales branches