Chapter 13
Retailing and Wholesaling
1
What is Retailing?
Includes all
the activities Involved
in Selling Goods or
Services Directly to
Final Consumers for
Their Personal,
Nonbusiness Use.
2
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.
3
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
4
Classification of Retailing:
Amount of Service
Self-Service
Retailer
Provide Few or No
Services to
Shoppers
i.e. Best Buy
Limited-Service
Retailers
Provide Only a Limited
Number of Services
to Shoppers
i.e. Sears
Full-Service
Retailers
Retailers that Provide a
Full Range of Services
to Shoppers
i.e. Neiman Marcus
5
Classification of Retailing:
Product Line (Tab. 13.1)
Store
Specialty Stores
Department Stores
Supermarkets
Convenience Stores
Superstores
Discount Stores
Off-Price Retailers
Warehouse Clubs
Description
Narrow Product Line, Deep Assortment i.e.
The Limited or Athlete’s Foot
Wide Variety of Product Lines i.e. Clothing,
Home Furnishings, 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. Toys R Us
Standard Merchandise at Lower Prices
i.e. Wal-Mart
Changing Collection of Higher-Quality
Goods at a Reduced Price i.e. T.J. Maxx
Limited Selection of Brand-Name Grocery
Items, Appliances, Etc. i.e. Sam’s Club
6
Classification of Retailing:
Relative Prices
Higher Prices and Offer Higher-Quality Goods
and Customer Service
Regular Prices and Offer Normal-Quality Goods
and Customer Service
Low Prices and Offer Lower-Quality Goods
and Customer Service
Discount
Stores
“Off-Priced”
Retailers
Catalog
Showrooms
7
Classification of Retailing:
Retail Organization
Corporate
Chain
Merchandising
Conglomerates
Voluntary
Chain
Franchise
Organizations
Retailer
Cooperatives
8
Retailer Marketing Decisions
(Fig. 13.1)
Retailer
Strategy
Target Market
Retail Store
Positioning
Retailer
Marketing Mix
Product and service
assortment
Prices
Promotion
Target Market and Positioning Decision
Target has positi oned itself as
an “upscale discounte r,” and
is jokingly referred to by a
Fre nc h-sounding nick name ,
Tar-zhay.
Place (location)
Wh y do people like it?
Wh at posi tion has e ach of th ese
Gap-owne d companies tak en:
•Gap?
•Banana R epubl ic?
•Old Navy?
9
Product Assortment and
Services Decisions
Product Assortment
• Width and Depth of Assortment
• Quality of Products
• 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
10
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, or
Power Centers,
or Online
Shopping
11
The Future of Retailing
New Retail Forms and Shortening Retail Lifecycle
Growth of Nonstore Retailing
Increasing Intertype Competition
Rise of Megaretailer
Growing Importance of Retail Technology
Global Expansion of Major Retailers
Retail Stores as “Communities” or “Hangouts”
12
The Wheel of Retailing
High Margin
High Price
High Status
1
3
2
1
2
3
4
Low Margin
Low Price
Low Status
2
1 = Discount
2 = Superstore
3 = Warehouse Club
4 = Combination Store
3
1
13
Discussion Connections
Online retailers provide an alternative to
shopping the old fashioned way.
Discuss the differences in shopping for
books and music at www.Amazon.com vs.
Barnes & Noble Booksellers.
Discuss the differences in shopping for
groceries at www.peapod.com vs. your
local grocery store.
Which do you prefer and why?
14
What is Wholesaling?
All the activities involved in selling goods and
services to those buying for resale or business
use.
Wholesaler - those firms engaged primarily in
wholesaling activity.
Wholesalers buy mostly from producers and sell
mostly to:
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Retailers,
Industrial consumers, and
Other wholesalers.
15
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 and
Promoting
Wholesaler
Functions
Financing
Buying and
Assortment Building
Bulk Breaking
Warehousing
Transportation
16
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.
Brokers/ Agents
They Don’t Take Title to
the Goods, and They
Perform Only a Few
Functions.
17
Wholesaler Marketing
Decisions (Fig. 13.2)
Wholesaler
Strategy
Wholesaler
Marketing Mix
Target Market
Product and service
assortment
Service
Positioning
Prices
Promotion
Place (location)
18
Trends in Wholesaling
Consolidation within the Industry is Reducing # of Wholsalers
Distinction Between Large Retailers and Wholesalers Blurs
Wholesalers Will Continue to Increase the Services Provided
Wholesalers Are Beginning to Go Global
19
Review of Concept
Connections
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.
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