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Managing Retailing, Wholesaling and Market Logistics & Managing Marketing Efforts . Chapter 9 & 10. Objective of Chapter 9. Understand the roles of retailers and wholesalers in the marketing channel. Know the major types of retailers. Know the major types of wholesalers.
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Managing Retailing, Wholesaling and Market Logistics & Managing Marketing Efforts Chapter 9 & 10
Objective of Chapter 9 • Understand the roles of retailers and wholesalers in the marketing channel. • Know the major types of retailers. • Know the major types of wholesalers. • Understand the marketing decisions facing retailers and wholesalers. • Logistics Marketing Decisions
Definitions • Retailing • All activities involved in selling goods or services directly to final consumers for their personal, nonbusiness use.
Definitions • Retailer • Business whose sales come primarily from retailing. • Can be brick and mortar, 100% virtual, or click and mortar
BusinessNow ZanyBrainy.com Video Clip ZanyBrainy.com is a click and mortar toy retailer. Click the picture above to play video
Discussion Question How is web retailing different? In your opinion, what “works on the web” that won’t work in a typical store?
Specialty Stores Department Stores Supermarkets Retailers Types of Retailers Discount Stores Convenience Stores Off-Price Retailers Superstores
Self-service retailers Customers are willing to self-serve to save money Discount stores Limited-service retailers Most department stores Full-service retailers Salespeople assist customers in every way High-end department stores Specialty stores Factors of Retailers Classification Retailers are Classified by: Amount of service Product lines Relative prices Organizational approach
Specialty stores Narrow product lines with deep assortments Department stores Wide variety of product lines Supermarkets Convenience stores Limited line Superstores Sell food, nonfood, and services Category killers Giant specialty stores Factors of Retailers Classification Retailers are Classified by: Amount of service Product lines Relative prices Organizational approach
Discount stores Low margins are offset by high volume Off-price retailers Independent off-price retailers TJ Maxx, Marshall’s Factory outlets Levi Strauss, Reebok Warehouse clubs Sam’s Club, Costco Factors of Retailers Classification Retailers are Classified by: Amount of service Product lines Relative prices Organizational approach
Corporate chain stores Commonly owned/controlled Voluntary chains Wholesaler-sponsored groups of independent retailers Retailer cooperatives Groups of independent retailers who buy in bulk Franchise organizations Based on uniqueness Merchandising conglomerates Diversified retailing lines under central ownership Factors of Retailers Classification Retailers are Classified by: Amount of service Product lines Relative prices Organizational approach
Figure 14-1: Retailer Marketing Mix Decisions
Discussion Question The product assortment, the services mix, and the store atmosphere are used by retailers to differentiate their business from the competition. Select two retailers from your local area and discuss how each store differs with respect to the three variables above.
Retailing • Retailer Marketing Mix • Price • High markup or high volume? • Promotion • Public relations, sales promotions, advertising, direct marketing • Place • Location, location, location!
Retailing • The Future of Retailing • New retail forms and shortening retail life cycles • Wheel-of-retailing concept • Growth of nonstore retailing • Mail-order, television, phone, online shopping • Retail convergence
Retailing • Rise of megaretailers • Growing importance of retail technology • Global expansion of major retailers • Retail stores as “Communities” or “Hangouts” The Future of Retailing Continued
Mall of America hosts over 520 specialty stores, 49 restaurants, and a theme park
Retailing Retailer Communities: Check out Playstation.com Playstation.com
Definitions • Wholesaling • All activities involved in selling goods and services to those buying for resale or business use. • Wholesaler • A firm engaged primarily in wholesaling activity.
Wholesaling • Wholesalers add value by performing the following functions: • Selling and promoting • Buying and assortment building • Bulk-breaking • Warehousing • Transportation
Wholesaling • Wholesalers add value by performing the following functions: • Financing • Risk bearing • Marketing information • Management services and advice
Full-service wholesalers Wholesale merchants Industrial distributors Limited service wholesalers Cash-and-carry wholesalers Truck wholesalers (jobbers) Drop shippers Rack jobbers Producer’s cooperatives Mail-order wholesalers Factors of Wholesalers Classification Wholesalers are Classified by: Merchant Wholesalers Brokers and Agents Manufacturers’ and retailers’ branches and offices
Brokers Bring buyers and sellers together and assist in negotiation Agents Manufacturers’ agents Selling agents Purchasing agents Commission merchants Factors of Wholesalers Classification Wholesalers are Classified by: Merchant Wholesalers Brokers and Agents Manufacturers’ and retailers’ branches and offices
Sales branches and offices Branches carry inventory: lumber, auto equipment, parts Offices do not carry inventory: dry goods Purchasing officers Perform roles similar to brokers and agents, however these individuals are employees of the organization Factors of Wholesalers Classification Wholesalers are Classified by: Merchant Wholesalers Brokers and Agents Manufacturers’ and retailers’ branches and offices
Figure 14-2: Wholesaler Marketing Mix Decisions
Wholesaling • Wholesaler Marketing Decisions • Targeting may be made on the basis of: • Size of customer • Type of retailer • Need for service • Positioning
Wholesaling • Wholesaler Marketing Decisions • Marketing mix decisions • Product and service assortment: inventory, line • Pricing: usual markup on COG is 20% • Promotion: largely disorganized and unplanned • Place: location, facilities
Wholesaling • Trends in Wholesaling • Price competition is still intense • Successful wholesalers must add value by increasing efficiency and effectiveness • The distinction between large retailers and wholesalers continues to blur
Wholesaling • More Trends in Wholesaling • More services will be provided to retailers • Many wholesalers are going global Wholesaler McKesson offers pharmacists a wide range of online resources
Market Logistics Decisions INVENTORY ORDER PROCESSING How should orders be handled? How should goods be shipped? How much stock should be held? Where should stock be located? WAREHOUSING TRANSPORTATION
KEYS TO DIFFERENTIATED DISTRIBUTION • Inventory – decision-making as to when and how much to order. • Transportation – delivery of goods to warehouses, dealers and customers. • Order Processing - shorten order-to-payment cycle; • Warehousing – Stocking locations of finished goods until they are sold;
Managing Total Marketing Efforts Chapter # 10
The goal of this chapter is to examine how firms organize, implement, evaluate, and control marketing activities.
Organizing the Marketing Department If a company can have an excellent marketing department, and even then fails in marketing, why? It depends how other departments of the company views customers. If they are pointing to the marketing department and say “ they do the marketing”. Its mean the company has not implemented effective marketing. Effecting marketing can only be possible when all employees realize their job is to create, serve, and satisfy customer.
Organizing the Marketing Department Modern marketing departments can be organized in a number of different ways: 1-Functional Organization 2-Geographic Organization 3-Product or Brand management Organization 4-Market Management Organization.
Organizing the Marketing Department 1- Functional Organization: The most common form of marketing organization consists of functional specialist reporting to a marketing vice president, who coordinates their activities. You must have the appropriate organization to effectively execute the four Ps of the marketing mix. When a company is small, multiple functions are often assigned to one person (i.e., PR and Advertising, etc.). Later, as the company grows there becomes too much work for one person and the company must attain a team of specialist to manage the greater efficiency. At this point the organization must either train existing staff or hire externally.
Functional Organization Marketing Administration Managers: Updates the status of sales orders and coordinates deliveries from the point of production and distribution. Directs preparation of accounting records. Recommends budgets to management. May confer (talk) with customers and customer representatives to evaluate and promote possibilities for improved and expanded marketing. Advertising and Sales Promotion Manager: Plan and prepare advertising and promotional material to increase sales of products or services, working with customers, company officials, sales departments and advertising agencies.Inspect layouts (out come) and advertising copy and edit scripts, audio and video tapes, and other promotional material.
Functional Organization Sales Manager: sales managers direct a company's sales program. They assign sales territories, set goals, and establish training programs for their sales representatives. Sales managers may also advise their sales representatives on ways to improve their sales performance, achieve goals and obtain expected quotas (targets). Marketing Research Manager: Market researchers collect and analyze information. They analyze consumer opinions and collect data from a variety of sources to enable organizations to make informed decisions. New products Manager: The Product Manager is responsible for the product planning and execution throughout the product lifecycle, including: gathering and prioritizing product and customer requirements, defining the product vision, and working closely with engineering, sales, and support to ensure revenue and customer satisfaction goals are met. The Product Manager's job also includes ensuring that the product supports the company's overall strategy & goal
Functional Organization Selecting the most appropriate research methodology and techniques Designing qualitative and quantitative research plans for products in all stages of the Product Life Cycle Designing research questionnaires. Interpreting data, writing reports, and making actionable recommendations Quantitative research focuses on gathering and analyzing information using techniques such as questionnaires and electronic data collection. Qualitative research focuses on people's attitudes and motivation, using methods such as focus groups and in-depth interviews.
Organizing the Marketing Department 2- Geographic Organization: A company selling in the national market often organize its sales force on geographic lines. Such as the national sales manager may supervise regional sales manager, who each supervise a few zonal/branch managers, supported by sales officers, sales supervisors and sales persons.
Organizing the Marketing Department 3- Product/Brand Management Organization: Companies producing a variety of products often establish a product management organization. The product-management organization does not replace the functional management organization, but serves as another layer of management. A product manager supervises product category managers, who in turn supervise specific product managers.
Organizing the Marketing Department 4- Market- Management Organization: Many companies sell their product to many different markets. Canon sells its fax machines to consumers, business, and government markets. When customers fall into different user groups with distinct buying preferences and practices, a market management organization is desirable. Customer-management Organization: Companies can organize themselves to understand and deal with individual customers rather than with mass-market.
Marketing Implementation, Evaluation and control Marketing implementation: is the process of turning plans into action describing who does what, when, and how. Effective implementation requires skills in allocating, monitoring, organizing, and interacting at all levels of the marketing effort. A brilliant strategic marketing plan counts for little if not implemented properly. Strategy addresses the what, and why of marketing activities, implementation addresses the who, where, when and how. Evaluation and control: Markets have the altering behavior , its means the needs and wants of target customers changes rapidly. After successfully implementation of companies marketing plans, it must be evaluated and controlled.
Marketing Implementation, Evaluation and control Strategic Control: Each company should periodically (regular time intervals) reassess its strategic approach to the marketplace with a good marketing audit. Marketing Audit is a fundamental part of the marketing planning process. It is conducted not only at the beginning of the process, but also at a series of points during the implementation of the plan. The marketing audit considers both internal and external influences on marketing planning, as well as a review of the plan itself. There are a number of tools and audits that can be used, for example SWOT analyses for the internal environment, as well as the external environment. Other examples include PEST and Five Forces Analyses, which focus solely on the external environment.