Chapter Eleven Retailing and Wholesaling. Roadmap: Previewing the Concepts Copyright 2007, Prentice Hall, Inc.11-2 1.Explain the roles of retailers and

Chapter Eleven

Retailing and Wholesaling

Copyright 2007, Prentice Hall, Inc. 11-2

Roadmap: Previewing the Concepts

1. Explain the roles of retailers and wholesalers in the distribution channel.

2. Describe the major types of retailers and give examples of each.

3. Identify the major types of wholesalers and give examples of each.

4. Explain the marketing decisions facing retailers and wholesalers.


Whole Foods Market Has 170 stores worldwide

with $4 billion in sales vs. 5000 stores and sales of $285 billion for Wal-Mart.

Offers organic, natural, and gourmet foods.

Positions itself AWAY from Wal-Mart: “Whole Foods, Whole People, Whole Planet.”

Whole Foods Market – Finding Its Whole Foods Market – Finding Its NicheNiche

Case StudyCase Study

Marketing Efforts Web site reinforces the

company’s positioning. Caters to health conscious,

affluent, liberal, educated consumer base.

Both in-store and online shopping is a customer experience.

Cares about employees, customers, & community.


What Is Retailing?

Retailing:– includes all the activities involved in

selling products or services directly to final consumers for their personal, non-business use.

Most retailing is done by retailers, but nonstore retailing has recently grown by leaps and bounds.


Types of Retailers

Retailers are classified based on:– Amount of service they offer– Breadth and depth of product lines– Relative prices charged– How they are organized


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.”


Major Store Retailer Types

Specialty stores Department stores Supermarkets

– Category Killers Convenience stores Discount stores Off-price retailers Superstores


Relative Prices Classification

Discount stores Off-price retailers

– Independent off-price retailers – Factory outlets

• Factory outlet malls• Value-retail centers

– Warehouse club


Organizational Classification

Corporate chain stores Voluntary chain Retailer cooperative Franchise Merchandising conglomerates


Retailer Marketing Decisions

Retailer Strategy:– Target market– Retail store positioning

• Until retailers define and profile their markets, retailers cannot make meaningful decisions related to the retailer marketing mix.


Retailer Marketing Decisions

Retailer Marketing Mix:– Product assortment and services– Price– Promotion– Place (location)


Assortment and Service Decisions

Product assortment– Should differentiate the retailer while

matching target shoppers’ expectations

Services mix Store atmosphere

– Physical layout can help/hinder shopping– Experiential retailing helps sell goods– Unusual, exciting shopping environments

are becoming more common


Price and Promotion Decisions

Price policy must fit its target market and positioning, product and service assortment, and competition.

Can use any or all of the promotion tools—advertising, personal selling, sales promotion, public relations, and direct marketing—to reach consumers.


Place Decisions

Retailers can locate in central business districts, various types of shopping centers, strip malls, or power centers.

Location is key to success.


The Future of Retailing

1. New Retail Forms and Shortening Retail Life Cycles

2. Growth of Nonstore Retailing

3. Retail Convergence

4. Rise of the Megaretailers

5. Growing Importance of Retail Technology

6. Global Expansion of Major Retailers

7. Retail Stores as “Communities” or “Hangouts”


Wholesaling

Wholesaling:– includes all activities involved in selling

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

Wholesalers add value for producers by performing one or more channel functions.


Functions Provided by Wholesalers

Financing Risk bearing Market

information Management

services and advice

Selling and promoting

Buying and assortment building

Bulk-breaking Warehousing Transportation


Types of Wholesalers

Merchant Wholesalers– Largest group of wholesalers– Account for 50% of wholesaling– Two broad categories:

• Full-service wholesalers• Limited-service wholesalers



Brokers and Agents– Do not take title to goods– Perform fewer functions– Brokers bring buyers and sellers together– Agents represent buyers on more

permanent basis– Manufacturers’ agents are most common

type of agent wholesaler



Manufacturers’ Sales Branches and Offices– Wholesaling by sellers or buyers

themselves rather than through independent wholesalers.


Wholesaler Marketing Decisions

Wholesaler Strategy:– Target market– Service positioning

Wholesaler Marketing Mix:– Product assortment and services– Price– Promotion– Place (location)


Trends in Wholesaling

Fierce resistance to price increases. Winnowing out of suppliers who are

not adding value based on cost and quality.

Distinction between large retailers and wholesalers is blurry.

Will continue to increase the services provided to retailers.

Wholesalers are now going global.


Rest Stop: Reviewing the Concepts

1. Explain the roles of retailers and wholesalers in the distribution channel.

2. Describe the major types of retailers and give examples of each.

3. Identify the major types of wholesalers and give examples of each.

4. Explain the marketing decisions facing retailers and wholesalers.

Documents

Chapter Eleven Retailing and Wholesaling. Roadmap: Previewing the Concepts Copyright 2007, Prentice Hall, Inc.11-2 1.Explain the roles of retailers and