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Chapter 12. Retailing and Wholesaling. 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.

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Chapter 12 l.jpg

Chapter 12

Retailing and Wholesaling


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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.


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What is Retailing?

Retailing

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


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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.


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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


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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


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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


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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?


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Classification of Retailing:Retail Organization

Corporate

Chain

Merchandising

Conglomerates

Voluntary

Chain

Franchise

Organizations

Retailer

Cooperatives



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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?


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  • 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


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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!


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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.


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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


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What is Wholesaling?

Wholesaling

Includes all the activities Involved in Selling Goods and Services to Those Buying for Resale or Business Use.


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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


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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



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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


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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.


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