CHAPTER TWELVE
Retailers, Wholesalers,
and Their Strategy
Planning
For use only with
Perreault and McCarthy
texts.
© 2006 McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin
www.mhhe.com/fourps
When we finish this lecture you should
1. Understand how retailers plan their marketing
strategies.
2. Know about the many kinds of retailers that
work with producers and wholesalers as
members of channel systems.
3. Understand the differences among the
conventional and nonconventional retailers—
including Internet merchants and others who
accept the mass-merchandising concept.
4. Understand scrambled merchandising and the
“wheel of retailing.”
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
When we finish this lecture you should
5. See why size or belonging to a chain can be
6.
7.
8.
9.
important to a retailer.
Know what progressive wholesalers are doing
to modernize their operations and marketing
strategies.
Know the various kinds of merchant
wholesalers and agent middlemen and the
strategies that they use.
Understand why retailing and wholesaling
have developed in different ways in different
countries.
See why the Internet is impacting both
retailing and wholesaling.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Wholesalers and Retailers Plan Their Strategies
Must Select Target
Markets and Marketing
Mixes Carefully
Marketers Must
Understand Retailer/
Wholesaler Evolution
Retailing Deals with
Final Customers
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Planning a Retailer’s Strategy
Convenience
Product Selection
Key Factors
Affecting
Consumers’
Retail Choice
Fairness in Dealings
Helpful Information
Prices
Social Image
Shopping Atmosphere
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Exhibit 12-1
Conventional Retailers – Try to Avoid Price Competition
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Exhibit 12-1
Expand Assortment & Service – To Compete at a High Price
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Exhibit 12-1
Evolution of Mass-Merchandising Retailers
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Exhibit 12-1
Some Retailers Focus on Added Convenience
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Vending Machines Are Convenient
+
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Shop at Home in a Variety of Ways
+
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Interactive Exercise: Types of Retail Outlets
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Exhibit 12-1
Retailing on the Internet
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Exhibit 12-2
Online vs. In-Store Shopping
+
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Competitive Effects Influence Other Retailers
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Retailing Types Are Explained by Consumer Needs Filled
+
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Why Retailers Evolve and Change
The “Wheel of Retailing” Keeps on Rolling!
AND
Scrambled
Merchandising
= Higher Profits
Product Life
Cycle Applies
to Retailing
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Ethical Issues
May Arise
Exhibit 12-4
Retailer Size and Profits
+
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
An Example of a Large Retail Chain
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Big Chains Are Building Market Clout
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Differences in Retailing in Different Nations
Mass-Marketing
Requires Mass
Markets
New Ideas Spread
Some Countries
Block Change
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
What Is a Wholesaler?
Changing With the Times
Producing Products, Not
Chasing Orders
Progressive Wholesalers
Adapt
Goodbye to Some?
Ethical Issues?
New Strategies Needed To
Survive
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Exhibit 12-5
Wholesalers Add Value in Different Ways
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Exhibit 12-6
Types of Wholesalers
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Types of Merchant Wholesalers
Limited Function
Service
• Cash and
Carry
• General
merchandise
• Single line
(or generalline)
Types of
Merchant
Wholesalers
• Drop
Shippers
• Truck
• RackJobbers
• Specialty
• Catalog
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Agent Middlemen Are Strong on Selling
Manufacturer’s
Agents
Brokers
Types of
Agent
Middlemen
Auction
Companies
Selling Agents
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
What Will Happen to Retailers and
Wholesalers in the Future?
Improved
Logistics
Efficiency
Increasing
Competition
New Internet
Applications
Marketers
and
Consumers
Can Expect
New WebBased Retailers
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Development
of Specialized
Intermediaries
Key Terms
• Retailing
• General stores
• Single-line stores
• Limited-line stores
• Specialty shop
• Department stores
• Mass-merchandising
•
•
concept
Supermarkets
Discount houses
• Mass-merchandisers
• Supercenters
• Hypermarkets
• Convenience (food)
•
•
•
•
stores
Automatic vending
Door-to-door selling
Telephone and directmail retailing
Wheel of retailing
theory
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Key Terms
•
•
•
•
•
•
•
•
•
Scrambled
merchandising
Corporate chain
Cooperative chains
Voluntary chains
Franchise operation
Wholesaling
Wholesalers
Manufacturers’ sales
branches
Merchant wholesalers
• Service wholesalers
• General merchandise
•
•
•
•
•
wholesalers
Single-line (or
general-line)
wholesalers
Specialty wholesalers
Limited-function
wholesalers
Cash-and-carry
wholesalers
Drop-shippers
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Key Terms
• Truck wholesalers
• Rack jobbers
• Catalog wholesalers
• Agent middlemen
• Manufacturer’s agents
• Export agents
• Import agents
• Brokers
• Export brokers
• Import brokers
• Selling agents
•
•
Combination export
manager
Auction companies
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin