Chapter 15
Managing Retailing,
Wholesaling, and
Market Logistics
PowerPoint by Karen E. James
Louisiana State University - Shreveport
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 0 in Chapter 15
Objectives
 Determine the types of
organizations in this sector.
 Learn what marketing decisions
organizations in this sector make.
 Understand the major trends in
this sector.
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 1 in Chapter 15
Retailing
Retailing Basics
 Retail life cycle
 Wheel-of-retailing
 Types of retailers
 Service levels
 Marketing
decisions
 Retail positioning
strategies
 Retailing trends
©2003 Prentice Hall, Inc.
 Nonstore retailing
 Corporate retailing
To accompany A Framework for Marketing Management, 2nd Edition
Slide 2 in Chapter 15
Retailing
Major Store Retailer Types
 Specialty store
 Discount store
 Department
store
 Convenience
store
 Supermarket
 Off-price retailer
 Superstore
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 3 in Chapter 15
Retailing
 Retail-store types pass through the
retail life cycle.
 The wheel-of-retailing describes how
new store types emerge.
 Retailers can offer one of four levels
of service:
– Self-service, self-selection, limited
service, and full service
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 4 in Chapter 15
Retailing
 Four broad retail positioning
strategies include:
– Bloomingdale’s
– Tiffany
– Sunglass Hut
– Wal-Mart
 Non-store retailing has been growing
faster than store retailing
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 5 in Chapter 15
Retailing
Major Types of Retail Organizations
 Corporate
chain store
 Consumer
cooperative
 Voluntary
chain
 Franchise
organization
 Retailer
cooperative
 Merchandising
conglomerate
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 6 in Chapter 15
Retailing
Retailing Basics
 Types of retailers
 Marketing
decisions
 Retailing trends
 Target market
 Product assortment
and placement
 Services mix and
store atmosphere
 Price
 Promotion
 Place
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 7 in Chapter 15
Retailing
Location Options for Retailers
 General business
district
 Strip mall
(shopping strip)
 Regional
shopping center
 Location within a
larger store or
operation
 Community
shopping center
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 8 in Chapter 15
Retailing
Retailing Basics
 Types of retailers
 New retail forms
 Intertype competition
 Growth of giant
retailers
 Marketing
decisions
 Technology
 Retailing trends
 Competition between
store-based and nonstore-based retailing
©2003 Prentice Hall, Inc.
 Global expansion
 Selling experiences
To accompany A Framework for Marketing Management, 2nd Edition
Slide 9 in Chapter 15
Wholesaling
Wholesaling
 Wholesaling basics
 Types of
wholesalers
 Marketing decisions
 Wholesaling trends
©2003 Prentice Hall, Inc.
 Wholesaling excludes
manufacturers, farmers,
and retailers
 Wholesalers differ from
retailers in three key
ways
 Wholesalers handle
many functions more
efficiently than do
manufacturers
To accompany A Framework for Marketing Management, 2nd Edition
Slide 10 in Chapter 15
Wholesaling
Wholesaler Functions
 Selling and
promoting
 Buying and
assortment
building
 Bulk breaking
©2003 Prentice Hall, Inc.
 Warehousing
 Transportation
 Financing
 Risk bearing
 Market information
To accompany A Framework for Marketing Management, 2nd Edition
Slide 11 in Chapter 15
Wholesaling
Wholesaling
 Wholesaling basics
 Growth and types
of wholesalers
 Marketing decisions
 Wholesaling trends
©2003 Prentice Hall, Inc.
 Wholesalers vary in type
and function
 Wholesaling has been
growing due to two key
factors:
– Many factories are located
far from buyers
– An increasing need to
adapt product quantities,
features, or packages to
meet buyer needs
To accompany A Framework for Marketing Management, 2nd Edition
Slide 12 in Chapter 15
Wholesaling
Major Wholesaler Types
 Merchant
wholesalers
 Full-service
wholesalers
 Limited-service
wholesalers
 Brokers & agents
©2003 Prentice Hall, Inc.
 Brokers
 Agents
 Manufacturers’ and
retailers’ branches
and offices
 Miscellaneous
wholesalers
To accompany A Framework for Marketing Management, 2nd Edition
Slide 13 in Chapter 15
Wholesaling
Wholesaling
 Wholesaling basics
 Target market
 Product assortment
and placement
 Types of
wholesalers
 Price
 Marketing decisions
 Place
 Promotion
 Wholesaling trends
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 14 in Chapter 15
Wholesaling
Wholesaling
 Wholesaling basics
 Types of
wholesalers
 Marketing decisions
 Wholesaling trends
©2003 Prentice Hall, Inc.
 Direct buying trends
initially threatened
wholesalers
 Wholesalers have
adapted by:
– Adding value
– Reducing costs
– Strengthening
relationships with
manufacturers
To accompany A Framework for Marketing Management, 2nd Edition
Slide 15 in Chapter 15
Market Logistics
 Interrelated Aspects Associated with
Market Logistics:
– Physical distribution
– Supply chain management (SCM)
– Value network
– Demand chain planning
– Market logistics
– Integrated logistics systems (ILS)
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 16 in Chapter 15
Market Logistics
Key Elements
 Market-logistics
objectives
 Market-logistics
decisions
 Market logistics
lessons
©2003 Prentice Hall, Inc.
 Logistics involve tradeoffs between costs and
customer service
 Maximizing profits, not
sales, is key
 A total system basis
should be considered
 Designing a system that
will minimize the cost of
achieving objectives
should be the outcome
To accompany A Framework for Marketing Management, 2nd Edition
Slide 17 in Chapter 15
Market Logistics
Calculating the Cost of
Market-Logistics Systems
M = T + FW + VW + S
Where . . .
M = total market-logistics cost of proposed system;
T = total freight cost of proposed system;
FW = total fixed warehouse cost of proposed system;
VW = total variable warehouse cost of proposed system
S = total cost of lost sales due to average delivery delay
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 18 in Chapter 15
Market Logistics
Key Elements
 Market-logistics
objectives
 Market-logistics
decisions
 Market logistics
lessons
©2003 Prentice Hall, Inc.
 Order processing
 Warehousing
– Storage, distribution,
automated warehouses
 Inventory
– Determine reorder point,
relevant cost comparison,
optimal order quantity
 Transportation
– Containerization
– Private vs. contract
carriers
To accompany A Framework for Marketing Management, 2nd Edition
Slide 19 in Chapter 15
Market Logistics
Key Elements
 Market-logistics
objectives
 Market-logistics
decisions
 Market logistics
lessons
©2003 Prentice Hall, Inc.
 A senior V.P. is needed
as the single contact
point for all logistical
elements
 Senior V.P. must
maintain close control
 Software and systems
are essential for
competitively superior
logistics performance
To accompany A Framework for Marketing Management, 2nd Edition
Slide 20 in Chapter 15