V I SUA L
Retailing and Wholesaling
Describe the benefits that retailing provides
for consumers.
shopping centre, or strip location. A variation of the strip location is the power
centre, which is a strip location with multiple national anchor stores.
retailing All activities involved in selling, renting, and providing goods and services to ultimate consumers for personal, family, or household use
Figure 11-1
Which company best represents which utilities?
The Bay
www.hbc.com
When a purchase is made at The Bay, customers
have different options to pay. Customers can use
an HBC credit card or an HBC MasterCard, along
with an HBC Rewards card and double their HBC
Rewards points.
Raulph Lauren
www.ralphlauren.com
Ralph Lauren offers the "Create Your Own"
collection (at www.ralphlauren.com), which allows
customers to create their own custom shirt by
selecting from up to 15 styles, 17 shirt styles, 2
logo locations, 5 font styles, 10 logo colours, and
5 sizes. The shirts are delivered in two weeks.
Lee Valley Tools Ltd.
www.leevalley.ca
Sales associates at Lee Valley Tools Ltd. are very
knowledgeable about the use of tools and conduct
in-store seminars for gardeners and woodworkers.
Toys “ R” Us
www.toysrus.com
A distinctive toy store with a backwards R, this
company is what every kid dreams about. Unlike
most stores, which reduce their space assigned to
toys after the holiday season, a huge selection of
toys is always available at Toys “ R” Us.
Time
Place
Can you
match
them?
Form
Information
Classify retail outlets by forms of ownership.
l
l
l
l
l
l
Explain the importance of target market selection and
positioning for retailers.
The first task in developing a retail strategy is to define the target market and
positioning of the retail store.
4
intertype competition Competition
between very dissimilar types of retail
outlets
level of service The degree of service
provided to the customer by self-, limited-, and full-service retailers
ts and services m
duc
ix
Variety and assortment
Sales functions and assistance
Customer service
Guarantees and exchanges
Product-service trade-offs
Personal selling
Advertising
t Marke
Displays, signage
rge
Image, quality, and
Public relations
value
Catalogues
Consumers
Markups
Telephone sales
Markdowns
and follow-up
nf
Shrinkage
Website
n
o
r m a ti o
Direct marketing
Database
marketing
Store location
Logistics
Size, layout
Format
Number of stores
Phy
sic al lo i o n m ix
cat
multichannel retailers Use a combination of traditional store formats and nonstore formats such as catalogues, television, and online retailing
off-price retailing Selling brand-name merchandise at lower than regular prices
Possession
form of ownership Distinguishes retail outlets on the basis of whether individuals, corporate chains, or contractual systems own the outlet
l
depth of product line The size of the
assortment of each item a store carries
Retailing mix
Pro
merchandise mix How many different types of products a store carries and in
what assortment
Retailing outlets can be classified along several dimensions: the form of ownership, level of service, or merchandise mix.
3
community shopping centre Retail
location that typically has one primary
store and 20 to 40 smaller
The retailing mix
t
BMO, one of Canada’s chartered banks, reaches
retail customers through its almost 900 branches;
a worldwide ABM network; and its online
banking services.
central business district The oldest
retail setting, the community’s downtown
area
Figure 11–5
i
l
BMO (Bank of Montreal)
www.bmo.com
breadth of product line The variety of
different items a store carries
il p r i c i n g m i x
Retailing provides customer value in the form of various utilities: time, place,
form, information, and possession. Economically, retailing is important in
terms of the people employed and money exchanged in retail sales.
2
CA R D
R eta
l
STU DY
Ta
1
11
AU D I O
munications mix
Com
chapter
&
power centre Large shopping strip with multiple anchor stores, a convenient
location, and a supermarket
regional shopping centres Consist of 50 to 150 stores that typically attract
customers who live within a 5- to 15-kilometre range; often containing two or
three anchor stores outlets, serving a population of consumers within a 2- to
5-kilometre drive
retailing mix The goods and services, physical distribution, and communications
tactics chosen by a store
scrambled merchandising Offering several unrelated products lines in a single
retail store
shrinkage Breakage and theft of merchandise by customers and employees
strip location A cluster of stores serving people who live within a 5- to 10-minute drive
5
Outline the retail marketing mix and its four variables.
The retailing mix consists of goods and services, retail pricing, physical location, and communications.
The product P in retailing includes level of service, merchandise mix, and
store atmosphere.
Stores vary in the level of service they provide. Three levels are self-service,
limited service, or full service.
Retail outlets vary in terms of the breadth and depth of their merchandise
lines. Breadth refers to the number of different items carried, and depth refers
to the assortment of each item offered.
In retail pricing, retailers must decide on the markup. Off-price retailers offer
brand-name merchandise at lower than regular prices.
Retail store location is an important retail mix decision. The common alternatives are the central business district, regional shopping centre, community
l
Discuss non-store retailing and its role in the retail world.
Non-store retailing includes automatic vending, television home shopping,
online retailing, and direct marketing (direct mail and catalogue retailing, telemarketing, and direct selling).
telemarketing Using the telephone to interact with and sell directly to
consumers
6
l
Describe why consumers shop and buy online, what they
purchase, and how marketers influence online purchasing
behaviour.
Online retailing allows consumers to search for, evaluate, and purchase products and services online. The increasing sales and number of people purchasing online suggest that the profile of the online consumer is becoming more
and more like the profile of the consumer of the traditional marketplace.
l
Consumers refer to six reasons they shop and buy online: convenience, choice,
customization, communication, cost, and control.
Figure 11–7
Why do consumers shop and buy online?
Figure 11–8
Estimated percentage of online retail sales by product/service category:
2007 and 2012
2007: Percent of Online Retail Sales
36%
Convenience
Choice
19%
Customization
8%
7%
4%
1%
8
7
l
Explain how retailers use the mobile channel.
Retailers are becoming increasingly aware of the value of smartphoneequipped customers. Retailers are looking at mobile as another important customer touch point. Cellphones, smartphones, and other handheld devices are
a convenient way for customers to gather more information about a retailer’s
products or even conduct transactions on a mobile basis.
Apparel, footwear, and accessories
12%
Housewares and household goods
12%
8%
6%
Recreation (toys, games, sporting goods)
3%
Control
10%
8%
Media (software, books, music, video)
6%
3%
Cost
33%
Computer hardware and consumer electronics
10%
Communication
2012: Percent of Online Retail Sales
Automobiles and accessories
14%
7
Product/service category
Travel reservations (air, car, lodging)
Specialty gifts, flowers, and greetings
Food and beverage
4%
1%
Office supplies
3%
Health and beauty products
3%
Describe the types of wholesalers and the functions they
perform.
l
Many retailers depend on the numerous types of intermediaries that engage in
wholesaling activities.
l The main difference between the various types of wholesalers lies in whether
or not they take title to the items they sell.
brokers Independent firms or individuals whose main function is to bring buyers
and sellers together to make sales
manufacturers’ agents Work for several producers and carry non-competitive,
complementary merchandise in an exclusive territory
merchant wholesalers Independently owned firms that take title to the merchandise they handle
selling agents Represent a single producer and are responsible for the entire
marketing function of that producer