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Learning Objectives
LEARNING OBJECTIVES

What are the issues manufacturers consider when choosing
retail partners?

What types of retailers are available for distributing
products?

How do manufacturers and retailers work together to
develop a strategy?

Why is multichannel marketing becoming such a prevalent
channel strategy?
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Apple Store
What makes the Apple
store so successful?
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Factors for Establishing a
Relationship with Retailers
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Choosing Retail Partners
Channel Structure
Degree of
vertical
integration
Manufacturers
brand
Power of
manufacturer
and retailer
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Choosing Retail Partners
Customer Expectations
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Choosing Retail Partners
Distribution Intensity
Selective
Exclusive
Intensive
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Limited Distribution
Why might Birkenstock
choose a limited
distribution intensity?
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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?
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Retailer’s Reaction?
How do you expect
retailers would
respond to this?
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Types of Retailers
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Food Retailers
Supermarket
Limited
nonfood
Differentiates
different types
of foods
Supercenter
Warehouse
Club
Convenience
Store
Includes
discount store
Limited
assortment
Limited variety
Wal-Mart,
Meijer,
K-Mart, Target
Little service
Includes:
Costco, Sams,
BJ’s
Good locations
Peapod Website
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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
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GNC Private Brands
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Check Yourself
1.
What are the different types of food
retailers? What differences mark their
strategies?
2.
What are the different types of general
merchandise retailers? What differences
mark their strategies?
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Facilitating Retail Strategy
Using the Four P’s: Product
Providing the right mix of
merchandise and services
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Price
Price defines the value of both the
merchandise and the service provided
Build-a-Bear Workshop Commercial
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Promotion
Retailers use a wide variety
of promotions, both within
their retail environment and
through mass media
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Place
Convenience is a key
ingredient to success
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Exploring Multiple Channel Options:
Benefits of Different Channels
Stores
Catalogs
Internet
Browsing
Convenience
Broader selection
Touching and feeling
Information
More information
Personal service
Safety
Personalization
Cash and credit
Touch and feel attributes
Entertainment and social
interaction
Instant gratification
Risk reduction
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Internet Channel
Broader
Selection
More
information
•Global
•Virtual communities
Personalization
•Customer service
•Personalized offerings
Touch and Feel
•Brands
•Gifts
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Technology
Services
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How does the Internet Improve
Multichannel Shopping?
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Retailers can do more online…
H&M’s (CSR) Website
Lands End Website
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Perceived Risk in Internet Shopping
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Evolution toward Multichannel
Marketing
Overcome the
limitations of an
existing format
Expanding market
presence
Goals for
Retailers
Increasing share of
wallet
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Insights into
customer’s shopping
behaviors
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Capabilities for Multichannel
Retailing
Disintermediation
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Glossary
Category specialists are discount stores that offer a
narrow but deep assortment of merchandise.
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Glossary
Convenience stores provide a limited variety and
assortment of merchandise at a convenient
location in 2,000-3,000 square foot stores with
speedy checkout.
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Glossary
A conventional supermarket is a self-service food
store offering groceries, meat, and produce with
limited sales of nonfood items, such as health and
beauty aids and general merchandise.
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Glossary
Department stores are retailers that carry a broad
variety and deep assortment, offer customer
services, and organize their stores into distinct
departments for displaying merchandise.
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Glossary
Disintermediation occurs when a manufacturer
sells directly to consumers, bypassing retailers.
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Glossary
Drugstores are specialty stores that concentrate on
pharmaceuticals and health and personal
grooming merchandise.
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Glossary
An exclusive distribution policy is when
manufacturers grant exclusive geographic
territories to one or very few retail customers so
no other customers in the territory can sell a
particular brand.
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Glossary
Extreme value retailers are small, full-line discount
stores that offer a limited merchandise
assortment at very low prices.
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Glossary
Full-line discount stores are retailers that offer a
broad variety of merchandise, limited service, and
low prices.
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Glossary
An intensive distribution strategy is designed to get
products into as many outlets as possible.
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Glossary
Multichannel retailers are retailers that use some
combination of stores, catalogs, and the Internet
to sell merchandise.
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Glossary
Off-price retailers offer an inconsistent assortment
of brand name merchandise at low prices.
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Glossary
Selective distribution uses a few selected
customers in a territory.
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Glossary
Specialty stores concentrate on a limited number of
complementary merchandise categories and
provide a high level of service in relatively small
stores.
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Glossary
Supercenters are large stores that combine a
supermarket with a full-line discount store.
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Glossary
Warehouse clubs are large retailers that offer a
limited and irregular assortment of food and
general merchandise with little service at low
prices for ultimate consumers and small
businesses.
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