Chapter 13 Retailing and e-distribution - PowerPoint PPT Presentation

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Presentation prepared by Robin Roberts, Griffith University and Mike Spark, Swinburne University of Technology. Chapter 13 Retailing and e-distribution. Chapter Objectives. Understand the purpose and function of retailers in the marketing channel Identify major types of retailers

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Chapter 13 retailing and e distribution

Presentation prepared by Robin Roberts, Griffith University and Mike Spark, Swinburne University of Technology

Chapter 13 retailing and e distribution

Chapter 13Retailing and e-distribution

Chapter objectives

Chapter Objectives

  • Understand the purpose and function of retailers in the marketing channel

  • Identify major types of retailers

  • Explore strategic issues in retailing

  • Recognise the various forms of non-store retailing

  • Understand the characteristics of e-distribution

  • Examine the major types of franchising and the benefits and weaknesses of franchising

Retailing versus e tailing in the florist industry

Retailing versus e-tailing in the florist industry



Roses Only



Retailing includes all transactions in which buyers are the ultimate consumers, who intend to consume the product through personal, family or household use.


  • are organisations

  • add value

  • and create utility

Major types of retail stores

Major types of retail stores

  • Many types of retail stores exist

  • Classified by breadth of products

  • Two general categories include:

    • General-merchandise retailers

    • Specialty retailers

General merchandise retailers

General-merchandise retailers

Department Stores

  • large retail organisations

  • wide product mixes

    Discount Stores

  • self-service, general-merchandise stores

  • brand name and private brand products

  • low prices


  • large, self-service stores

  • food and non food product ranges

General merchandise retailers cont d

General-merchandise retailers (cont’d)


  • giant retail outlets

  • food and nonfood products

  • most routine consumer products


  • combines supermarket and discount

    Warehouse Clubs

  • large-scale, members-only

  • combining cash-and-carry wholesaling with discount retailing

General merchandise retailers cont d1

General-merchandise retailers (cont’d)

Warehouse Showrooms

  • large on-premise inventories

  • minimal services

    Catalog Showrooms

  • form of warehouse showroom

  • products are stored out of buyers’ reach

    Convenience Stores

  • Small stores in convenient locations

  • long opening hours

  • frequently purchased items

Chapter 13 retailing and e distribution

Specialty retailers

Specialty retailers emphasise narrow and deep assortments

There are 3 main types:

  • Traditional Specialty Retailers

  • Category Killers

  • Off-price retailers

Chapter 13 retailing and e distribution

Specialty retailers (cont’d)

Traditional Specialty Retailers

  • narrow product mix

  • deep product lines

  • higher costs and higher margins

  • more product selection

  • product expertise

  • high levels of personal service

Chapter 13 retailing and e distribution

Specialty retailers (cont’d)

Category Killers

  • concentrate on a major product categories

  • compete on low prices and availability

    Off-Price Retailers

  • buy seconds, overruns, returns and off-season merchandise

  • charge less than department stores for comparable merchandise

  • offer fewer customer services

Strategic issues in retailing

Strategic issues in retailing

Consumer purchases may result from social and

psychological influences

Consumers shop for various reasons, retailers

must do more….

Factors affecting location

  • Intended target market trading area

  • Types of products being sold

  • Suitability of site for customer access

  • Customer characteristics

  • Location of competitive retail operations

Strategic issues in retailing cont d

Strategic issues in retailing (cont’d)

Types of Locations

  • Central business district (CBD)

  • Free-standing structures

  • Neighbourhood

  • Community

  • Regional

    Emerging types

    • Factory outlet centres

    • Miniwarehouse centres

    • Non-anchored centres

What factors should aldi consider when selecting locations for its new stores

What factors should Aldi consider when selecting locations for its new stores?



Today Tonight footage courtesy of Seven Network

Types of traditional shopping centres

Types of traditional shopping centres

  • Neighborhood Shopping Centres

    • several small convenience and

    • specialty stores

  • Community Shopping Centres

    • one or more department stores

    • some specialty and convenience stores

  • Regional Shopping Centres

    • home to large department stores

    • widest product mix

    • deepest product lines

Types of emerging or non traditional shopping centres

Types of emerging or non-traditional shopping centres

  • Factory Outlet Centres

    • feature discount and factory outlets

    • carrying traditional brand names

  • Miniwarehouse Centres

    • loosely planned centres that lease to retailers running stores out of warehouse bays

  • Non-anchored Centres

    • do not have traditional ‘anchors’

    • combine off-price and category killer stores in a ‘power centre’ format

Strategic issues in retailing cont d1

Strategic issues in retailing (cont’d)

Retail positioning

  • Identifying an unserved or underserved market segment

  • a strategy that distinguishes the retailer from others in the minds of consumers in that segment

    Store image

  • Atmospherics

  • Interior layout

  • Exterior storefront and entrance design

Strategic issues in retailing cont d2

Strategic issues in retailing (cont’d)

Scrambled merchandising

  • addition of unrelated products and product lines to an existing product mix

  • particularly fast-moving items that can be sold in volume

    Intent of scrambled merchandising:

    • one-stop shopping focus

    • Generate customer traffic

    • Realise higher profit margins

    • Increase impulse purchases

Strategic issues in retailing cont d3

Strategic issues in retailing (cont’d)

The wheel of retailing

A hypothesis holding that new

retailers usually enter the market as

low-status, low-margin, low-price

operators but eventually evolve into

high-cost, high price merchants

The wheel of retailing

The Wheel of Retailing

Non store retailing

Non-store retailing

Non-store retailing is the selling of

products outside of the confines of a

retail facility

Three factors spurring growth:

  • Consumers

  • poorly informed sales force

  • Impact of older generation

Direct marketing

Direct marketing

Direct marketing— use of telecommunications

and non-personal media to introduce products

  • Catalogue marketing

  • Direct-response marketing

  • Telemarketing

  • Television home shopping

  • Online retailing

Direct marketing1

Direct marketing

Catalogue Marketing

A type of marketing in which an organisation provides a catalogue from which customers can place orders by mail, telephone and the internet

Direct marketing cont d

Direct marketing (cont’d)

  • Direct-response marketingA type of marketing that occurs when a retailer advertises a product and makes it available through mail or telephone orders

  • TelemarketingThe performance of marketing-related activities by telephone

Direct marketing cont d1

Direct marketing (cont’d)

  • Television home shoppingCan buy them by calling a toll-free number and paying with a credit card

  • Online retailingMakes products available to buyers through computer connections

Direct selling

Direct selling

  • Direct sellingThrough face-to-face sales presentations at home or in the workplace

  • Benefits

    • Convenience of time and place of presentation

    • Personal attention to customer

  • Limitations

    • High costs make it the most expensive form of selling

    • Negative consumer view of direct selling

Automatic vending

Automatic vending

  • Automatic vendingUse of machines to dispense a product and used for small, routinely-purchased products

  • Benefits

    • continuous and efficient service

  • Limitations

    • high costs of equipment

    • possible frequent servicing and repairs

    • impersonal means of selling

E distribution


The role of e-distribution is to make the

products available at the right time, at

the right place, in the right quantities

  • IT advances are allowing close synchronisation and cooperation between external suppliers and the firm and

  • internally between the manufacturing and customer contact operations

B2b e distribution

B2B e-distribution

B2B e-distribution has benefited from

organisational resources available to build

technologically advanced networks among

manufacturers and supply chain members.


  • secure Web-based networks that connect companies with their customers and suppliers

  • B2B e-marketing infrastructures make the whole channel process more efficient

E tailing


  • The Internet is becoming a major retail venue.

  • Security remains an issue which stops customers from using the online purchasing facilities.

  • As encryption technology improves, the trust and confidence of customers will make this an escalating opportunity for satisfying customer needs, particularly for information-based products and trading.



A form of licensing in which a franchiser in exchange for a financial commitment, grants a franchisee the right to market its product in accordance with the franchiser’s standards.



Retail franchises fall into three major categories:

  • Manufacturer authorises number of retail stores

    • Trucks, cars, shoes, paint, petrol

  • Producer licences to sell a given product to retailers

    • Soft drink industry

  • Franchiser supplies brands names, techniques or services

    • McDonalds, Gloria Jeans, Greens

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