Chapter 12

1. Chapter 12 Retailing and Wholesaling

2. Road Map: Previewing the Concepts • Explain the roles of retailers and wholesalers in the distribution channel. • Describe the major types of retailers and give examples of each. • Identify the major types of wholesalers and give examples of each. • Explain the marketing decisions facing retailers and wholesalers.

3. What is Retailing? Retailing Includes all the Activities Involved in Selling Goods or Services Directly to Final Consumers for Their Personal, Nonbusiness Use.

4. Retailing • Retailing can be done in stores (store retailing) or out of a store (nonstore retailing) such as: • Direct mail, • Catalogs, • Telephone, • Home shopping shows, • Internet.

5. Retail Organizations Independent, Corporate, or Contractual Ownership Organization Amount of Service Self-Service, Limited-Service and Full-Service Retailer Classification of Retailing Product Line Length and Breadth of the Product Assortment Relative Prices Pricing Structure that is Used by the Retailer

6. Classification of Retailing:Amount of Service Self-Service Retailers Provide Few or No Services to Shoppers i.e. Best Buy Limited-Service Retailers Provide Only a Limited Number of Services to Shoppers i.e. Sears Full-Service Retailers Retailers that Provide a Full Range of Services to Shoppers i.e. Neiman Marcus

7. Specialty Stores Narrow Product Line, Deep Assortment i.e. The Limited or Athlete’s Foot Department Stores Wide Variety of Product Lines i.e. Clothing, Home Furnishings i.e. Saks Fifth Avenue Supermarkets Wide Variety of Food, Laundry, & Household Products i.e. Kroger Convenience Stores Limited Line of High-Turnover Convenience Goods i.e. 7-Eleven Superstores Large Assortment of Routinely Purchased Food, Nonfood Products i.e. Target Discount Stores Standard Merchandise at Lower Prices i.e. Wal-Mart Off-Price Retailers Changing Collection of Higher-Quality Goods at a Reduced Price i.e. T.J. Maxx Classification of Retailing:Product Line (Tab. 12-1) Store Description

8. Discussion Question • Giant superstores called category killers are an emerging trend. Answer the following questions: • How is a category killer different from other types of retailers? • Why has this form of retailing grown so rapidly?

9. Classification of Retailing:Retail Organization Corporate Chain Merchandising Conglomerates Voluntary Chain Franchise Organizations Retailer Cooperatives

10. Retailer Marketing Decisions (Fig. 12-1)

11. Interactive Student Assignments • Consider the following thought question, format an answer, pair with the student on your right, share your thoughts with one another, and respond to questions from the instructor. • How do retailers establish a position in the marketplace?

12. Product Assortment • Brand of Merchandise • Merchandising Events • Product Differentiation Strategies Services Mix Key Tool of Nonprice Competition for Setting One Store Apart From Another • Store’s Atmosphere • Physical Layout • “Feel” That Suits the Target Market • and Moves Customers to Buy Product Assortment and Services Decisions

13. Price Decisions Target Market, Product & Service Assortment, Competition Promotion Decisions Using Advertising, Personal Selling, Sales Promotion, Public Relations, & Direct Marketing to Reach Customers Place Decisions Shopping Centers, Central Business Districts, Power Centers, or Online Shopping Retailer’s Price, Promotion, and Place Decisions Location, Location, Location!

14. Mall of America • The Mall of America “megamall” contains more than: • 520 specialty stores, • 49 restaurants, • 7-acre indoor theme park, • Underwater World featuring hundreds of marine specimens, • And a two-story miniature golf course.

15. New Retail Forms and Shortening Retail Life-Cycles Growth of Nonstore Retailing Increasing Intertype Competition Rise of the Megaretailers Growing Importance of Retail Technology Global Expansion of Major Retailers Retail Stores as “Communities” or “Hangouts” The Future of Retailing

16. What is Wholesaling? Wholesaling Includes all the activities Involved in Selling Goods and Services to Those Buying for Resale or Business Use.

17. Why are Wholesalers Used? Wholesalers are Often Better at Performing One or More of the Following Channel Functions: Management Services & Advice Selling & Promoting Market Information Buying & Assortment Building Wholesaler Functions Bulk-Breaking Risk Bearing Financing Warehousing Transportation

18. Merchant Wholesaler Independently Owned Business that Takes Title to the Merchandise it Handles. Manufacturers’ Sales Branches and Offices Wholesaling by Sellers or Buyers Themselves Rather Than Through Independent Wholesalers. Agents & Brokers They Don’t Take Title to the Goods, and They Perform Only a Few Functions. Types of Wholesalers

19. Wholesaler Marketing Decisions (Fig. 12-2)

20. Must Constantly Improve Their Services and Reduce Costs Distinction Between Large Retailers and Wholesalers Blurs Wholesalers Will Continue to Increase the Services Provided Trends in Wholesaling Wholesalers Are Beginning to Go Global

21. Rest Stop: Reviewing the Concepts • Explain the roles of retailers and wholesalers in the distribution channel. • Describe the major types of retailers and give examples of each. • Identify the major types of wholesalers and give examples of each. • Explain the marketing decisions facing retailers and wholesalers.