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Chapter 18

Chapter 18. Managing Retailing, Wholesaling, and Logistics. Learning Objectives. What major types of marketing intermediaries occupy this sector? What major changes are occurring in the modern retail marketing environment with respect to competitive market structure and technology?

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Chapter 18

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  1. Chapter 18 Managing Retailing, Wholesaling, and Logistics

  2. Learning Objectives • What major types of marketing intermediaries occupy this sector? • What major changes are occurring in the modern retail marketing environment with respect to competitive market structure and technology? • What marketing decisions do marketing intermediaries make? • What does the future hold for private label brands? • What are some of the important issues in wholesaling?? • What are some important issues in logistics?

  3. Retailing • Retailing • All the activities in selling goods or services directly to final consumers for personal, nonbusiness use • Retailer/retail store • Any business enterprise whose sales volume comes primarily from retailing

  4. Types of retailers • Store retailers, nonstore retailers, and retail organizations

  5. Types of retailers • Store retailers: • Specialty store • Department store • Supermarket • Convenience store • Drug store • Discount store • Extreme value or hard-discount store • Off-price retailer • Superstore • Catalog showroom

  6. Types of retailers • Levels of service for store retailers • Self-service • Self-selection • Limited service • Full service

  7. Types of retailers • Nonstore retailing • Direct marketing • Direct selling • Automatic vending • Buying services

  8. Types of retailers • Corporate retailing and franchising

  9. Corporate Retailing and Franchising • Franchises are distinguished by three characteristics: • 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

  10. The Modern Retail Marketing Environment • Competitive retail market structure • New retail forms and combinations • Growth of giant retailers • Growth of intertype competition • Emergence of fast retailing • Decline of middle-market retailers

  11. The Modern Retail Marketing Environment • Role of technology • Retailers use technology for business operations, to enhance the consumer shopping experience inside the store, and Internet/social media strategies

  12. Marketing Decisions • Target market • Channels • Product assortment • Procurement • Prices • Services • Store atmosphere • Store activities and experiences • Communications • Location

  13. Product Assortment • Develop product differentiation • Feature exclusive national brands • Feature private-label merchandise • Feature distinctive-merchandise events • Feature ever-changing merchandise • Feature the latest merchandise first • Offer merchandise-customizing services • Offer a highly targeted assortment

  14. Services • Retailers must decide on the services mix to offer customers: Prepurchase services Postpurchase services Ancillary services

  15. Location Central business districts Regional shopping centers Community shopping centers Stand-alone stores Location within a larger store Shopping strips

  16. Private Labels • A private-label brand is a brand that retailers and wholesalers develop • Role of private labels • Private-label success factors

  17. Wholesaling • Wholesaling includes all the activities in selling goods or services to those who buy for resale or business use

  18. Major wholesaler types Merchant wholesalers Full-service wholesalers Specialized wholesalers Limited-service wholesalers Manufacturers’/ retailers’ branches/offices Brokers and agents

  19. Wholesaler functions • Selling and promoting • Buying and assortment building • Bulk breaking • Warehousing • Transportation • Financing • Risk bearing • Market information • Management services and counseling

  20. Market Logistics • Supply chain management (SCM) • Market logistics • Integrated logistics systems (ILS) • Lean manufacturing

  21. Market logistics planning • Deciding on company’s value proposition • Selecting best channel design and network strategy • Developing operational excellence • Implementing solution

  22. Market-Logistics Decisions • Order processing: how should we handle orders? • Warehousing: where should we locate our stock? • Inventory: how much stock should we hold? • Transportation: how should we ship goods?

  23. Figure 18.1Optimal Ordering Quantity

  24. Transportation • Containerization • Piggyback, fishyback, trainship, and airtruck • Private vs. contract vs. common carriers

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