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Chapter 13 Retailing and e-distribution

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

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 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

Specialty retailers

Specialty retailers emphasise narrow and deep assortments

There are 3 main types:

  • Traditional Specialty Retailers
  • Category Killers
  • Off-price retailers

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

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

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