All the activities involved in selling goods or services
directly to final consumers for their personal, nonbusiness
use.
- businesses whose sales come primarily
from retailing.
Retailers can be classified as:
Store retailers such as Home Depot, Sears, Walmart
Nonstore retailers such as the mail, telephone, and
Internet.
Amount of Service
Self-Service, Limited-Service and
Full-Service Retailers
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
Self service retailers:
serve customers who are willing to perform their
own process to save time or money such as
supermarkets.
 Limited service retailers:
such as Sears provide more sales assistance because
they carry more shopping goods about which
customers need information. Their increased
operating costs result in higher prices
 Full service retailers :
salespeople assist customers in every phase of the
shopping process. Full service stores usually carry
more specialty goods for which customers need or
want assistance or advice.
*Result in higher operating costs ,
which is passed along to customers as higher prices.
Store Type Product
Length and Breadth of Assortment
Specialty Stores
Narrow Product Line, Deep Assortment
Department Stores
Wide Variety of Product Lines i.e. Clothing, Home
Furnishings, & Household Items
Supermarkets
Wide Variety of Food, Laundry, & Household Products
Convenience Stores
Limited Line of High-Turnover Convenience Goods
Superstores
Category Killers
Hypermarkets
Large Assortment of Routinely Purchased Food &
Nonfood Products, Plus Services
Giant Specialty Store that Carries a Very Deep
Assortment of a Particular Line
Huge Superstores
Types of Retailers Relative Prices
Discount
stores
Off-price
retailers
Factory
outlets
Warehouse
clubs
Discount store:
a retail operation that sells standard merchandise at lower
prices by accepting low margins and selling at higher
volume.
 Off price retailer:
a retailer that buys at less than regular wholesale prices
and sells at less than retail
The three main types of the off price retailers are
independents, factory outlets and warehouse divisions of
larger retail corporations
Independent off price retailer:
an off price retailer that is either independently owned
and run or is a division of a larger retail corporation.
 Factory outlet:
which is owned and operated by a manufacturer and that
normally carries the manufacturer’s surplus, discontinued or
irregular goods.
 Warehouse club:
which sells a limited selection of brand name grocery items, clothing or
other goods at deep discounts to members who pay annual
membership fees
Merchandising
Conglomerates
Franchise
Organizations
Retail
Organizations
Voluntary
Chains
Retailer
Cooperatives
Corporate chains are two or more outlets that are commonly
owned and controlled
Size allows them to buy in large quantities at lower prices and gain
promotional economies
selling similar lines of merchandise, highly skilled employees.
Sears
 Voluntary chains are wholesale-sponsored groups of
independent retailers that engage in group buying and
common merchandising
IGA
Western Auto
Retailer cooperatives is a group of independent retailers that band
together
to set up a joint-owned, central wholesale operation and conduct joint
merchandising and promotion effort
Ace Hardware
Associated Grocers
 Franchise organizations are based on some unique product or
service; on
a method of doing business; or on the trade name, good will, or patent
that the franchisor has developed
Contractual association between franchiser (manufacturers,
wholesalers, service organizations) and franchisee who are
authorized to use the brand name. McDonalds ….
 Merchandising conglomerates are corporations that combine
several retailing forms under central ownership
Limited Brands
Several diversified retailing lines with integration in management and
distribution.
Features of corporate retailing
1-Greater purchasing power
2-Achieve economies of scale
3-Wider brand recognition
4-Better trained employees
Nonstore Retailing Accounts for More Than 14% of All Consumer
Purchases , and May Account for 33% of All Sales by 2000.
Direct Marketing
Direct Selling
Automatic Vending
Catalogs & Direct Mail
TV Shopping Shows
Online Shopping
Home & Office Parties
Targeted
Individuals
Privacy
Response
Measurement
Testing
Higher
Response
Key
Characteristics
of
Direct
Marketing
Customized
Offer
Immediate
Orders
Continuous
Relationship
Retailer Strategy
Target Market
Retailer Marketing
Mix
-Product and Service
Assortment
-Retail Prices
Retail Store
Positioning
-Promotion
-Place (Location)
Create Value for Targeted Retail Customers
Product Assortment Decisions
-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
Prepurchase services
Postpurchase services
Ancillary services
Price Decisions
Target Market
Product & Services Assortment
Competition
Promotion Decisions
Using Advertising, Personal Selling,
Sales Promotion and Public Relations to
Reach Customers.
Place Decisions
Shopping Centers, Central Business
Districts, Power Centers, or Outlet
Malls. Location!
* General business districts
* Regional shopping centers
* Community shopping centers
* Strip malls
* Location within a larger store
Number of people passing by
% who enter store
% of those who buy
Average amount
spent per sale
1-Listen to the customers.
2-Treat employees as partners.
3-Big sign reading (Satisfaction guaranteed), (we sell for less).
5-Customers often welcome by greeter
6-Low price and speed stock replenishment.
7-Expanded their stories outside of US
New Retail Forms and Shortening
Retail Lifecycles
Growth of Nonstore Retailing
Increasing Intertype Competition
Rise of Megaretailers
Growing Importance of
Retail Technology
Global Expansion of Major Retailers
 New retail forms has been emerged.
 New retailers are facing shorter life span, they are rapidly copied
and lose novelty. It is familiar in our areas.
Growth of non store retailing.
 Competition is increasing between different types of stores, like
Discount stores, Catalog showrooms, Department stores. All are
competing the same customers.
 All retailers now moving to one of 2 poles, either mass
merchandiser, or as specialty retailer. Super power retailers
emerging.
Department stores - one stop shopping convenience.
Gradually they gave up to Malls where customers can
find every thing.
Technology became critical, Retailers using computers to
manage better Inventory, Ordering, etc..
Retailers with unique formats and strong positioning are
moving to other countries, Like
McDonalds. 18% of US retailers moved out, 40% of
Europeans, and 31% of Far East.
Wholesaling includes all activities involved in selling goods and services to
those buying for resale or business use
Selling and promoting
Buying assortment building
Bulk breaking
Warehousing
Transportation
Financing
Risk bearing
Market information
Management services and advice
Selling and promoting
involves the wholesaler’s sales force helping the manufacturer reach
many smaller customers at lower cost
Buying assortment
building involves the selection of items and building of assortments
needed by their customers, saving the customers work
Bulk breaking
involves the wholesaler buying in larger quantity and breaking into
smaller lots for its customers
Warehousing
involves the wholesaler holding inventory, reducing its customers’
inventory cost and risk
Transportation
involves the wholesaler providing quick delivery due to its proximity
to the buyer
Financing
involves the wholesaler providing credit and financing suppliers by
ordering earlier and paying on time
Risk bearing
involves the wholesaler absorbing risk by taking title and bearing the
cost of theft, damage, spoilage, and obsolescence
Market information
involves the wholesaler providing information to suppliers and
customers about competitors, new products, and price
developments
Management services and advice
involves wholesalers helping
retailers train their sales clerks,
improve store layouts, and set up
accounting and inventory control
systems
Merchant
Wholesaler
Brokers/ Agents
Independently Owned
Business that Takes
Title to the
Merchandise
it Handles.
They Don’t Take Title to
the Goods, and They
Perform Only a Few
Functions.
Manufacturers’
Sales Branches
and Offices
Wholesaling by Sellers
or Buyers Themselves
Rather Than Through
Independent
Wholesalers.
Merchant wholesalers
is the largest group of wholesalers and include:
Full-service wholesalers who provide a full set of services
 Limited service wholesalers who provide few
services and specialized functions
Brokers and agents do not take title, perform a few functions,
and specialize by product line or customer type
Brokers bring buyers and sellers together and assist in negotiations
Agents represent buyers or sellers
Manufacturers’ sales branches and offices is a form of wholesaling
by sellers or buyers themselves rather than through
independent wholesalers
Wholesaler Marketing Decisions
Wholesaling Developments to Consider
Must Learn to Compete Effectively Over
Wider and More Diverse Areas
Increasing Consolidations Will Reduce
Number of Wholesalers
Surviving Wholesalers Will Grow Larger
Through Acquisitions and Mergers
Vertical Integration Will Remain Strong
Global Expansion
Wholesaler Marketing Decisions
1-Target market and positioning decisions
2-Size of customer
3-Type of customer
4-Need for service
Wholesaler Marketing Decisions
Challenges
 Resistance to price increases
 Lack of suppliers
 Changing customer needs
 Adding value by increasing efficiency and effectiveness
*It involves, Planning, Implementing, and controlling
the physical flow of materials and final goods till
from points of origin to points of use.
* Market logistics starts from the point of sales
forecasting which planning for other activities depend
on such as scheduling distribution, production and
inventory levels.
Getting the right goods to the right places at the right time
for the least cost.
1-Market logistics decisions must be based on
profit maximizing rather than cost consideration
2-Electronic links among all parties should be
established
3-Logistics goals should match or exceed
competitors’ service standards.
M = T+FW+VW+S
M = Total market – logistics cost of proposed system
T = Total freight cost of proposed system
FW = Total fixed warehouse cost of proposed system
VW = Total variable Warehouse cost (include inventory).
S = Total cost of lost sales due to average delivery
delay under proposed system.
Four major decision must be made:
•Order Processing “system of ordering”
• Warehousing ”where should stocks be located”
• Inventory “how much stock should be held”
• Transportation “how should goods be shipped”
Market logistics decisions must be based on
profit maximizing rather than cost
consideration
 Electronic links among all parties should
be established
 Logistics goals should match or exceed
competitors’ service standards.
1-How should orders be handled?
2-Where should stock be located?
3-How much stock should be held?
4-How should goods be shipped?