Managing Retailing, Wholesaling
and Market Logistics
&
Managing Marketing Efforts
Chapter 9 & 10
Objective of Chapter 9
Understand the roles of retailers and
wholesalers in the marketing channel.
Know the major types of retailers.
Know the major types of wholesalers.
Understand the marketing decisions
facing retailers and wholesalers.
Logistics Marketing Decisions
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Definitions
Retailing
 All activities involved
in selling goods or
services directly to
final consumers
for their personal,
nonbusiness use.
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Definitions
Retailer
 Business whose
sales come
primarily from
retailing.
 Can be brick and
mortar, 100%
virtual, or click
and mortar
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BusinessNow
ZanyBrainy.com Video Clip
ZanyBrainy.com
is a click and
mortar toy
retailer.
Click the picture above to play video
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Discussion Question
How is web
retailing
different? In
your opinion,
what “works
on the web”
that won’t work
in a typical
store?
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Retailers
Types of Retailers
Specialty Stores
Discount Stores
Department
Convenience
Stores
Stores
Supermarkets
Off-Price Retailers
Superstores
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Factors of Retailers Classification
Retailers are
Classified by:
Amount of
service
Product lines
Relative prices
Organizational
approach
Self-service retailers
 Customers are willing to
self-serve to save money
 Discount stores
Limited-service retailers
 Most department stores
Full-service retailers
 Salespeople assist
customers in every way
 High-end department
stores
 Specialty stores
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Factors of Retailers
Classification
Retailers are
Classified by:
Specialty stores
 Narrow product lines with
deep assortments
Department stores
Amount of
service
Product lines
Relative prices
Organizational
approach
 Wide variety of product
lines
Supermarkets
Convenience stores
 Limited line
Superstores
 Sell food, nonfood, and
services
Category killers
 Giant specialty stores
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Outlet malls
and category
complete are
popular with
consumers
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Factors of Retailers
Classification
Retailers are
Classified by:
Discount stores
Amount of
service
Product lines
Relative prices
Organizational
approach
Off-price retailers
 Low margins are offset
by high volume
 Independent off-price
retailers
 TJ Maxx, Marshall’s
 Factory outlets
 Levi Strauss, Reebok
 Warehouse clubs
 Sam’s Club, Costco
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Factors of Retailers
Classification
Retailers are
Classified by:
Amount of
service
Product lines
Relative prices
Organizational
approach
Corporate chain stores
 Commonly owned/controlled
Voluntary chains
 Wholesaler-sponsored
groups of independent
retailers
Retailer cooperatives
 Groups of independent
retailers who buy in bulk
Franchise organizations
 Based on uniqueness
Merchandising
conglomerates
 Diversified retailing lines
under central ownership
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Figure 14-1:
Retailer Marketing Mix
Decisions
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Discussion Question
The product assortment, the services
mix, and the store atmosphere are
used by retailers to differentiate their
business from the competition.
Select two retailers from your local area
and discuss how each store differs with
respect to the three variables above.
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Retailing
Retailer Marketing Mix
 Price

High markup or high volume?
 Promotion

Public relations, sales promotions,
advertising, direct marketing
 Place

Location, location, location!
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Retailing
The Future of Retailing
 New retail forms and
shortening retail life cycles

Wheel-of-retailing concept
 Growth of nonstore retailing

Mail-order, television, phone,
online shopping
 Retail convergence
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Retailing
The Future of Retailing Continued
 Rise of megaretailers
 Growing importance
of retail technology
 Global expansion of
major retailers
 Retail stores as
“Communities” or
“Hangouts”
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Mall of America hosts over 520 specialty
stores, 49 restaurants, and a theme park
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Retailing
Retailer Communities: Check out Playstation.com
Playstation.com
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Definitions
Wholesaling
 All activities involved in selling goods
and services to those
buying for resale
or business use.
Wholesaler
 A firm engaged
primarily in
wholesaling activity.
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Wholesaling
Wholesalers add value
by performing the
following functions:
 Selling and promoting
 Buying and assortment
building
 Bulk-breaking
 Warehousing
 Transportation
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Wholesaling
Wholesalers add
value by performing
the following
functions:




Financing
Risk bearing
Marketing information
Management services
and advice
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Factors of Wholesalers
Classification
Wholesalers are
Classified by:
Merchant
Wholesalers
Brokers and
Agents
Manufacturers’
and retailers’
branches and
offices
Full-service wholesalers
 Wholesale merchants
 Industrial distributors
Limited service
wholesalers
 Cash-and-carry
wholesalers
 Truck wholesalers
(jobbers)
 Drop shippers
 Rack jobbers
 Producer’s cooperatives
 Mail-order wholesalers
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Factors of Wholesalers
Classification
Wholesalers are
Classified by:
Merchant
Wholesalers
Brokers and
Agents
Manufacturers’
and retailers’
branches and
offices
Brokers
 Bring buyers and
sellers together and
assist in negotiation
Agents




Manufacturers’ agents
Selling agents
Purchasing agents
Commission
merchants
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Factors of Wholesalers
Classification
Wholesalers are
Classified by:
Merchant
Wholesalers
Brokers and
Agents
Manufacturers’
and retailers’
branches and
offices
Sales branches and
offices
 Branches carry inventory:
lumber, auto equipment,
parts
 Offices do not carry
inventory: dry goods
Purchasing officers
 Perform roles similar to
brokers and agents,
however these individuals
are employees of the
organization
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Figure 14-2:
Wholesaler Marketing Mix
Decisions
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Wholesaling
Wholesaler Marketing Decisions
 Targeting may be made on the
basis of:
Size of customer
 Type of retailer
 Need for service

 Positioning
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Wholesaling
Wholesaler Marketing Decisions
 Marketing mix decisions
Product and service assortment:
inventory, line
 Pricing: usual markup on COG is 20%
 Promotion: largely disorganized and
unplanned
 Place: location, facilities

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Wholesaling
Trends in Wholesaling
 Price competition is still intense
 Successful wholesalers must
add value by increasing
efficiency and effectiveness
 The distinction between large
retailers and wholesalers
continues to blur
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Wholesaling
More Trends in
Wholesaling
 More services will
be provided to
retailers
 Many wholesalers
are going global
Wholesaler McKesson offers pharmacists a
wide range of online resources
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Market Logistics Decisions
ORDER PROCESSING
INVENTORY
How should orders be
handled?
How much stock
should be held?
Where should stock
be located?
How should goods
be shipped?
WAREHOUSING
TRANSPORTATION
30
KEYS TO DIFFERENTIATED
DISTRIBUTION


Order Processing - shorten
order-to-payment cycle;
Warehousing – Stocking
locations of finished goods
until they are sold;


Inventory – decision-making
as to when and how much to
order.
Transportation – delivery of
goods to warehouses,
dealers and customers.
Managing Total Marketing
Efforts
Chapter # 10
The goal of this chapter is to
examine how firms organize,
implement, evaluate, and
control marketing activities.
Organizing the Marketing
Department
If a company can have an excellent marketing
department, and even then fails in marketing,
why?
It depends how other departments of the
company views customers. If they are pointing to
the marketing department and say “ they do the
marketing”. Its mean the company has not
implemented effective marketing.
Effecting marketing can only be possible when all
employees realize their job is to create, serve,
and satisfy customer.
Organizing the Marketing
Department
Modern marketing departments can be
organized in a number of different ways:
1-Functional Organization
2-Geographic Organization
3-Product or Brand management
Organization
4-Market Management Organization.
Organizing the Marketing
Department
1- Functional Organization:
The most common form of marketing organization consists of
functional specialist reporting to a marketing vice president,
who coordinates their activities.
You must have the appropriate organization to effectively
execute the four Ps of the marketing mix. When a company is
small, multiple functions are often assigned to one person
(i.e., PR and Advertising, etc.). Later, as the company grows
there becomes too much work for one person and the
company must attain a team of specialist to manage the
greater efficiency. At this point the organization must either
train existing staff or hire externally.
Functional Organization
Marketing Vice
President
Marketing
Administration
Manager
Advertising and
sales promotion
manager
Sales manager
Marketing
Research
Manager
New-Products
Manager
Functional Organization
Marketing Administration Managers:
Updates the status of sales orders and coordinates deliveries from the
point of production and distribution. Directs preparation of accounting
records. Recommends budgets to management. May confer (talk) with
customers and customer representatives to evaluate and promote
possibilities for improved and expanded marketing.
Advertising and Sales Promotion Manager:
Plan and prepare advertising and promotional material to increase
sales of products or services, working with customers, company
officials, sales departments and advertising agencies.
Inspect layouts (out come) and advertising copy and edit scripts,
audio and video tapes, and other promotional material.
Functional Organization
Sales Manager: sales managers direct a company's sales program. They
assign sales territories, set goals, and establish training programs for
their sales representatives. Sales managers may also advise their sales
representatives on ways to improve their sales performance, achieve
goals and obtain expected quotas (targets).
Marketing Research Manager: Market researchers collect and analyze
information. They analyze consumer opinions and collect data from a
variety of sources to enable organizations to make informed decisions.
New products Manager: The Product Manager is responsible for the
product planning and execution throughout the product lifecycle,
including: gathering and prioritizing product and customer requirements,
defining the product vision, and working closely with engineering, sales,
and support to ensure revenue and customer satisfaction goals are met.
The Product Manager's job also includes ensuring that the product
supports the company's overall strategy & goal
Functional Organization
Selecting the most appropriate research methodology and
techniques
Designing qualitative and quantitative research plans for
products in all stages of the Product Life Cycle
Designing research questionnaires.
Interpreting data, writing reports, and making actionable
recommendations
Quantitative research focuses on gathering and analyzing
information using techniques such as questionnaires and
electronic data collection. Qualitative research focuses on
people's attitudes and motivation, using methods such as focus
groups and in-depth interviews.
Organizing the Marketing
Department
2- Geographic Organization:
A company selling in the national market often
organize its sales force on geographic lines. Such
as the national sales manager may supervise
regional sales manager, who each supervise a
few zonal/branch managers, supported by sales
officers, sales supervisors and sales persons.
Geographic Organization:
National
Sales
Manager
Kabul
Regional Sales
Manager
Nangrahar
Zonal/Branch
Manager
Jalalabad
Zonal/Branch
Manager
Sumerkhel
Regional Sales
Manager
Laghman
Zonal/Branch
Manager
Mehterlam
Baba
Zonal/Branch
Manager
Charbagh
Organizing the Marketing
Department
3- Product/Brand Management Organization:
Companies producing a variety of products often establish a
product management organization. The product-management
organization does not replace the functional management
organization, but serves as another layer of management.
A product manager supervises product category managers, who
in turn supervise specific product managers.
Organizing the Marketing
Department
4- Market- Management Organization:
Many companies sell their product to many different markets.
Canon sells its fax machines to consumers, business, and
government markets.
When customers fall into different user groups with distinct
buying preferences and practices, a market management
organization is desirable.
Customer-management Organization: Companies can organize
themselves to understand and deal with individual customers
rather than with mass-market.
Marketing Implementation, Evaluation
and control
Marketing implementation: is the process of turning plans into
action describing who does what, when, and how. Effective
implementation requires skills in allocating, monitoring,
organizing, and interacting at all levels of the marketing effort.
A brilliant strategic marketing plan counts for little if not
implemented properly.
Strategy addresses the what, and why of marketing activities,
implementation addresses the who, where, when and how.
Evaluation and control: Markets have the altering behavior ,
its means the needs and wants of target customers changes
rapidly.
After successfully implementation of companies marketing
plans, it must be evaluated and controlled.
Marketing Implementation, Evaluation
and control
Strategic Control: Each company should periodically (regular
time intervals) reassess its strategic approach to the
marketplace with a good marketing audit.
Marketing Audit is a fundamental part of the marketing
planning process. It is conducted not only at the beginning of
the process, but also at a series of points during the
implementation of the plan. The marketing audit considers
both internal and external influences on marketing planning,
as well as a review of the plan itself.
There are a number of tools and audits that can be used, for
example SWOT analyses for the internal environment, as well
as the external environment. Other examples include PEST
and Five Forces Analyses, which focus solely on the external
environment.
End of Semester!
14- 47