Marketing:AnIntroductionThirteenthEditionChapter11RetailingandWholesalingCopyright?2017,2015,2013PearsonEducation,Inc.AllRightsReservedLearningObjectives(1of2)11-1.Explaintheroleofretailersinthedistributionchannelanddescribethemajortypesofretailers.11-2.Describethemajorretailermarketingdecisions.11-3.Discussthemajortrendsanddevelopmentsinretailing.11-4.Explainthemajortypesofwholesalersandtheirmarketingdecisions.FirstStop:WalmartTheWorld’sLargestRetailer-theWorld’sLargestCompany“Savemoney.Livebetter.”SaysWalmart’sCEO,“We’reobsessedwithdeliveringvaluetocustomers.”LearningObjective11-1Explaintheroleofretailersinthedistributionchannelanddescribethemajortypesofretailers.Retailing(1of2)ActivitiesinvolvedinsellinggoodsorservicesdirectlytoconsumersfortheirpersonaluseRetailer:BusinesswhosesalescomeprimarilyfromretailingRetailing(2of2)Shoppermarketing:FocusingtheentiremarketingprocesstowardturningshoppersintobuyersastheyapproachthepointofsaleOmni-channelretailing:Creatingaseam-lesscross-channelbuyingexperiencethatintegratesin-store,online,andmobileshoppingTypesofRetailersRetailerclassificationcanbebasedonAmountofserviceofferedBreadthanddepthoftheproductlinesRelativepriceschargedWaytheyareorganizedAmountofServiceSelf-serviceretailersServecustomerswhoarewillingtoperformtheirownlocate-compare-selectprocess

Limited-serviceretailersCarrymoreshoppinggoodsaboutwhichcustomersneedinformationProvidemoresalesassistanceFull-serviceretailersCarrymorespecialtygoodsAssistcustomersineveryphaseoftheshoppingprocessMajorStoreRetailerTypes(1of2)TypeTypedescriptionSpecialtystoreCarriesanarrowproductlinewithadeepassortmentDepartmentstoreCarriesseveralproductlinesEachlineisoperatedasaseparatedepartmentSupermarketLarge,low-cost,low-margin,high-volume,self-serviceoperationConveniencestoreCarriesalimitedlineofhigh-turnoverconvenienceproductsatslightlyhigherpricesDiscountstoreSellsgoodsatlowerpriceswithlowermarginsandhighervolumesOff-priceretailerSellsmerchandiseboughtatless-than-regularwholesalepricesandsoldatlessthanretailSuperstoreVerylargestoreforroutinelypurchaseditemsMajorStoreRetailerTypes(2of2)DiscounterDollarGeneralisthenation’slargestsmall-boxdiscountretailer.MajorTypesofRetailOrganizationsTypeDescriptionCorporatechainTwoormoreoutletsthatarecommonlyownedandcontrolledVoluntarychainWholesalersponsoredindependentretailersengagedingroupbuyingandmerchandisingRetailercooperativeGroupofindependentretailerswhojointlyestablishacentralbuyingorganizationandconductjointpromotioneffortsFranchiseorganizationContractualassociationbetweenafranchisorandfranchiseesLearningObjective11-1SummaryRetailing-sellinggoodsorservicesdirectlytofinalconsumersShoppermarketing-turningshoppersintobuyersOmni-channelretailing-integratesin-store,online,andmobileshoppingRetailersclassifiedbyamountofservice,productlinesold,andrelativepricesCorporateandcontractualretailorganizationsLearningObjective11-2Describethemajorretailermarketingdecisions.Figure11.1-RetailerMarketingStrategiesSegmentation,Targeting,Differentiation,andPositioningDecisions(1of2)Targetmarketsmustbesegmentedanddefined.Retailersthendecidehowtodifferentiateandpositionthemselvesinthosemarkets.Segmentation,Targeting,Differentiation,andPositioningDecisions(2of2)WhichWichSuperiorSandwichessucceedsbypositioningitselfstronglyaway

fromlargercompetitors.ProductAssortmentandServicesDecisionRetailersmustdeterminethreeproductvariables.ProductassortmentServicesmixStoreatmospherePriceDecisionPricepolicymustfittheretailers’TargetmarketandpositioningProductandserviceassortmentCompetitionEconomicfactorsRetailerspracticeeitherEverydaylowpricing(EDLP)High-lowpricingPromotionDecisionRetailersusevariouscombinationsofthefivepromotiontools:AdvertisingPersonalsellingSalespromotionPublicrelations(PR)DirectandsocialmediamarketingPlaceDecisionLocationsshouldbeaccessibletothetargetmarketinareasthatareconsistentwiththeretailer’spositioning.Shoppingcenter:Groupofretailbusinessesbuiltonasitethatisplanned,developed,owned,andmanagedasaunitTypesofShoppingCentersRegionalShoppingCenterCommunityShoppingCenterNeighborhoodShoppingCenterPowerCenterLifestyleCenterLearningObjective11-2SummaryMajorretailermarketingdecisionsSegmentationandtargetingStoredifferentiationandpositioningRetailmarketingmixdecisionsProductandservicesassortmentPrice,promotion,andplaceLearningObjective11-3Discussthemajortrendsanddevelopmentsinretailing.RetailingTrendsandDevelopments(1of5)TighterconsumerspendingImpactoftheGreatRecessiononconsumersChangedspendingpatternsImpactoftheGreatRecessiononretailersCost-cutting,pricepromotions,bankruptcyNewvaluepitchesinpositioningNewretailforms,shorteningretaillifecycles,andretailconvergenceRetailingTrendsandDevelopments(2of5)RiseofmegaretailersOfferbettermerchandiseselections,goodservice,andstrongpricesavingstoconsumersHaveshiftedthebalanceofpowerbetweenretailersandproducersGrowthofdirect,online,mobile,andsocialmediaretailingAvailabilityofavarietyofnonstorealternativesRetailingTrendsandDevelopments(3of5)Showroomingisthenowcommonpracticeofviewingproductsinstoresbutbuyingthemonline.RetailingTrendsandDevelopments(4of5)GrowingimportanceofretailtechnologyProducebetterforecastsControlinventorycostsInteractelectronicallywithsuppliersSendinformationbetweenstoresSelltocustomerswithinstoresRetailingTrendsandDevelopments(5of5)GreenretailingPromotingmoreenvironmentallyresponsibleproductsLaunchingprogramstohelpcustomersbemoreresponsibleWorkingwithchannelpartnerstoreducetheirenvironmentalimpactGlobalexpansionofmajorretailersEscapingsaturatedhomemarketsLearningObjective11-3SummaryMajortrendsanddevelopmentsinretailingNeweconomicrealities–thrift-mindedconsumersNewretailformsandretailconvergenceRiseofmegaretailersGrowthofdirect,online,mobile,andsocialmediaretailingandretailtechnologyGreenretailingandglobalexpansionofmajorretailersLearningObjective11-4Explainthemajortypesofwholesalersandtheirmarketingdecisions.Wholesaling(1of2)InvolvesalltheactivitiesinsellinggoodsandservicestothosebuyingforresaleorbusinessuseWholesaler:Afirmengagedprimarily

inwholesalingactivitiesWholesaling(2of2)Manyofthenation’slargestandmostimportantwholesalers—likeGrainger—arelargelyunknowntofinalconsumers.ChannelFunctionsPerformedbyWholesalersSellingandPromotingBuyingandAssortmentBuildingBulkBreakingWarehousingTransportationFinancingRiskBearingMarketInformationManagementServicesandAdviceTypesofWholesalers(1of2)TypeDescriptionMerchantwholesalersIndependentlyownedwholesalebusinessesthattaketitletoallmerchandisehandledFull-servicewholesalersLimited-servicewholesalersBrokersDonottaketitletogoodsFacilitatebuyingandsellingEarnacommissionbasedonsellingpriceTypesofWholesalers(2of2)TypeDescriptionAgentsRepresentbuyersorsellersonarelativelypermanentbasisPerformonlyafewfunctionsDonottaketitletogoodsManufacturers’andretailers’branchesandofficesWholesalingbysellersorbuyersthemselvesratherthanthroughindependentwholesalersTypesofFull-ServiceWholesalersWholesalemerchantsSellprimarilytoretailersProvideafullrangeofservicesTypesGeneralmerchandisewholesalersGenerallinewholesalersSpecialtywholesalersIndustrialdistributorsSelltomanufacturersCarrystockOffercreditProvidedeliveryMaycarryabroadrangeofmerchandise,ageneralline,oraspecialtylineTypesofLimited-ServiceWholesalersTypesDescriptionCash-and-carrywholesalersCarryalimitedlineoffast-movinggoodsSelltosmallretailersforcashTruckwholesalersPerformprimarilyasellinganddeliveryfunctionDropshippersDonotcarryinventoryorhandletheproductRackjobbersPricethegoodsKeepgoodsfreshSetuppoint-of-purchasedisplaysKeepinventoryrecordsProducers’cooperativesFarmer-ownedmembersAssemblefarmproduceforsaleinlocalmarketsMail-orderorWebwholesalersSendcatalogstoormaintainWebsitesforretail,industrial,andinstitutionalcustomersTypesofAgentsManufacturers’agents

RepresenttwoormoremanufacturersofcomplementarylinesSellingagentsHavecontractualauthoritytosellamanufacturer’sentireoutputPurchasingagentsHavealong-termrelationshipwithbuyersandmakepurchasesforthemCommissionmerchantsTakephysicalpossessionofproductsandnegotiatesalesTypesofManufacturers’andRetailers’BranchesandOfficesSalesbranchesandoffices

Setupbymanufacturerstoimproveinventorycontrol,selling,andpromotionSalesbranchescarryinventory.Salesofficesdonot