CHAPTER
RETAILING AND
MULTICHANNEL
MARKETING
McGraw-Hill/Irwin
16
Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
Retailing and Multichannel Marketing
LEARNING OBJECTIVES
LO1 Discuss the four factors manufacturers should consider as
they develop their strategy for working with retailers.
LO2 Outline the considerations associated with choosing retail
partners.
LO3 List the three levels of distribution intensity.
LO4 Describe the various types of retailers.
LO5 Describe the components of a retail strategy.
LO6 Identify the benefits of stores.
LO7 Identify the benefits of multichannel retailing.
LO8 Detail the challenges of multichannel retailing.
16-2
Barbie Megastore
Imaginechina via AP Images
16-3
Factors for Establishing
a Relationship with Retailers
16-4
Choosing Retail Partners
Channel Structure
Degree of vertical
integration
Manufacturers
brand
Power of
manufacturer and
retailer
©M Hruby
16-5
Choosing Retail Partners
Customer Expectations
16-6
Choosing Retail Partners
Channel Member Characteristics
Larger firms
Less likely to use
supply chain
intermediaries
Can gain more
control, be more
efficient, and
save money.
16-7
Choosing Retail Partners
Intensive
©Jeff Greenberg/PhotoEdit
Distribution Intensity
Selective
©Susan Van Etten/PhotoEdit
Exclusive
16-8
Distribution Intensity
Why might
Birkenstock choose
an exclusive
distribution
intensity?
Courtesy Birkenstock USA
16-9
Check Yourself
1.
What issues should manufacturers
consider when choosing retail
partners?
2.
What is the difference between
intensive, exclusive, and selective
levels of distribution intensity?
16-10
Courtesy wwwadbustersorg
Retailer’s Reaction?
How do you expect
retailers would
respond to this?
16-11
Types of Retailers
16-12
Food Retailers
Supermarket
Limited
nonfood
Supercenter
Warehouse
Club
Includes
Limited
discount store assortment
Wal-Mart,
Differentiates
Meijer,
different
K-Mart,
types of foods
Target
Convenience
Store
Limited
variety
Little service
Includes:
Good
Costco, Sams, locations
BJ’s
Peapod Website
16-13
General Merchandise Retailers
Department Stores
Full-line Discount
Specialty
Drugstores
Category Specialist
Extreme value
Off-Price
•Broad variety and deep assortment
•Broad variety at low prices
•Limited merchandise with service in small store
•Specialty for pharmaceutical and heath
•Discount with narrow but deep assortment
•Full line, limited, very low prices
•Inconsistent assortment of brand name at low prices
16-14
Kmart and Sears
16-15
GNC Private Brands
Courtesy GNC Corporation
Courtesy GNC Corporation
16-16
Check Yourself
1.
What strategies distinguish the different
types of food retailers?
2.
What strategies distinguish the different
types of general merchandise retailers?
3.
Are organizations that provide services
to consumers considered to be retailers?
16-17
Developing a Retail Strategy
Using the Four P’s: Product
AP Photo/David Kohl
Providing the right mix of
merchandise and services
16-18
Price
Courtesy DDB - London
Price defines the value of both the merchandise and the service provided
Build-a-Bear Workshop Commercial
16-19
Courtesy Bass Pro Shops
AP Photo/MarkHumphrey
Promotion
Retailers use a wide variety
of promotions, both within
their retail environment and
through mass media
16-20
Place
©M Hruby
Convenience is a key
ingredient to success
The McGraw-Hill Companies, Inc/
Jill Braaten, photographer
16-21
Wal-Mart Faces Biggest
Civil Rights Suits
16-22
Benefits of Stores for Consumers
Browsing
Touching and Feeling
Personal Service
Cash and Credit
Entertainment and Social Interaction
Instant Gratification
Risk Reduction
16-23
Benefits of the Internet
and Multichannel Retailing
Deeper and Broader
Selection
Personalization
Gain Insights into Consumer
Shopping Behavior
Increase Customer
Satisfaction and Loyalty
Expand Market Presence
16-24
Courtesy LL Bean
How does the Internet Improve
Multichannel Shopping?
16-25
Retailers can do more online…
Zafu Website
16-26
Perceived Risk in Internet Shopping
Courtesy Zafu
16-27
Effective Multichannel Marketing
Integrated
CRM
Brand
Image
Pricing
Supply
Chain
16-28