Chapter 12
Retailing and Wholesaling
12-1
Road Map: Previewing the Concepts
Explain the roles of retailers and
wholesalers in the distribution channel.
Describe the major types of retailers and
give examples of each.
Identify the major types of wholesalers and
give examples of each.
Explain the marketing decisions facing
retailers and wholesalers.
12-2
What is Retailing?
Includes all
the Activities
Involved in Selling
Goods or Services
Directly to Final
Consumers for Their
Personal,
Nonbusiness Use.
12-3
Retailing
Retailing can be done in
stores (store retailing)
or out of a store
(nonstore retailing) such
as:
Direct mail,
Catalogs,
Telephone,
Home shopping shows,
Internet.
12-4
Classification of Retailing
Amount of Service
Self-Service, Limited-Service and
Full-Service Retailer
Product Line
Length and Breadth of the Product
Assortment
Relative Prices
Pricing Structure that is Used
by the Retailer
Retail Organizations
Independent, Corporate, or
Contractual
Ownership Organization
12-5
Classification of Retailing:
Amount of Service
Limited-Service
Self-Service
Retailers
Retailers
Provide Only a Limited
Provide Few or No
Number of Services
Services to
to Shoppers
Shoppers
Full-Service
i.e. Sears
i.e. Best Buy
Retailers
Retailers that Provide a
Full Range of Services
to Shoppers
i.e. Neiman Marcus
12-6
Classification of Retailing:
Product Line (Tab. 12-1)
Store
Specialty Stores
Department Stores
Supermarkets
Convenience Stores
Superstores
Discount Stores
Off-Price Retailers
Description
Narrow Product Line, Deep Assortment i.e.
The Limited or Athlete’s Foot
Wide Variety of Product Lines i.e. Clothing,
Home Furnishings i.e. Saks Fifth Avenue
Wide Variety of Food, Laundry, & Household
Products i.e. Kroger
Limited Line of High-Turnover Convenience
Goods i.e. 7-Eleven
Large Assortment of Routinely Purchased
Food, Nonfood Products i.e. Target
Standard Merchandise at Lower Prices
i.e. Wal-Mart
Changing Collection of Higher-Quality
Goods at a Reduced Price i.e. T.J. Maxx
12-7
Giant superstores called category killers
are an emerging trend. Answer the
following questions:
How is a category killer different from
other types of retailers?
Why has this form of retailing grown so
rapidly?
12-8
Classification of Retailing:
Retail Organization
Corporate
Chain
Merchandising
Conglomerates
Voluntary
Chain
Franchise
Organizations
Retailer
Cooperatives
12-9
Retailer Marketing Decisions
(Fig. 12-1)
12-10
Consider the following thought
question, format an answer, pair with
the student on your right, share your
thoughts with one another, and respond
to questions from the instructor.
How do retailers establish a position in the
marketplace?
12-11
Product Assortment and
Services Decisions
Product Assortment
• Brand of Merchandise
• Merchandising Events
• Product Differentiation Strategies
Services Mix
Key Tool of Nonprice Competition
for Setting One Store Apart From
Another
Store’s Atmosphere
• Physical Layout
• “Feel” That Suits the Target Market
and Moves Customers to Buy
12-12
Retailer’s Price, Promotion,
and Place Decisions
Price
Decisions
Target
Market,
Product &
Service
Assortment,
Competition
Promotion
Decisions
Using
Advertising,
Personal Selling,
Sales Promotion,
Public Relations,
& Direct
Marketing to
Reach Customers
Place
Decisions
Shopping
Centers, Central
Business
Districts, Power
Centers, or
Online
Shopping
12-13
Mall of America
The Mall of America
“megamall” contains more
than:
520 specialty stores,
49 restaurants,
7-acre indoor theme
park,
Underwater World
featuring hundreds of
marine specimens,
And a two-story
miniature golf course.
12-14
The Future of Retailing
New Retail Forms
and Shortening
Retail Life-Cycles
Growth of Nonstore
Retailing
Increasing Intertype
Competition
Rise of the
Megaretailers
Growing Importance
of Retail Technology
Global Expansion of
Major Retailers
Retail Stores as
“Communities” or
“Hangouts”
12-15
What is Wholesaling?
Includes all
the activities Involved
in Selling Goods and
Services to Those
Buying for Resale or
Business Use.
12-16
Why are Wholesalers Used?
Wholesalers are Often Better at Performing One or More of
the Following Channel Functions:
Management
Services & Advice
Market
Information
Risk Bearing
Selling & Promoting
Wholesaler
Functions
Financing
Buying &
Assortment Building
Bulk-Breaking
Warehousing
Transportation
12-17
Types of Wholesalers
Merchant Wholesaler
Independently Owned
Business that Takes Title to the
Merchandise it Handles.
Manufacturers’ Sales
Branches and Offices
Wholesaling by Sellers or
Buyers Themselves
Rather Than Through
Independent
Wholesalers.
Agents & Brokers
They Don’t Take Title to
the Goods, and They
Perform Only a Few
Functions.
12-18
Wholesaler Marketing Decisions
(Fig. 12-2)
12-19
Trends in Wholesaling
Must Constantly Improve Their Services and Reduce Costs
Distinction Between Large Retailers and Wholesalers Blurs
Wholesalers Will Continue to Increase the Services Provided
Wholesalers Are Beginning to Go Global
12-20
Rest Stop: Reviewing the Concepts
Explain the roles of retailers and
wholesalers in the distribution channel.
Describe the major types of retailers and
give examples of each.
Identify the major types of wholesalers and
give examples of each.
Explain the marketing decisions facing
retailers and wholesalers.
12-21