Transcript Wholesaler Marketing Decisions

Copyright © 2005 Pearson Education Inc.
Retailing and Wholesaling
•Chapter 14
•PowerPoint slides
•Express version
•Instructor name
•Course name
•School name
•Date
Principles of Marketing, Sixth Canadian Edition
Learning Objectives
14.2
Copyright © 2005 Pearson Education Inc.
• After studying this chapter, you should be able to:
– Explain the roles of retailers and wholesalers in the marketing
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
Principles of Marketing, Sixth Canadian Edition
Retailing
14.3
Copyright © 2005 Pearson Education Inc.
• Retailing: all activities involved in selling goods or services
directly to final consumers for their personal, non-business use
– Retailing can take place in stores and non-store environments
– Retailers can be classified based on:
• Amount of service offered
• Depth of products lines
• Relative prices charged
• How they are organized
Principles of Marketing, Sixth Canadian Edition
Types of Retailers
14.4
Copyright © 2005 Pearson Education Inc.
• Amount of service offered:
– Self-service retailers
– Limited-service retailers
– Full-service retailers
• Relative prices charged:
– Discount stores
– Off-price retailers:
• Independents
• Factory outlets
• Warehouse clubs
• Products lines:
•
•
•
•
•
•
•
Specialty stores
Department stores
Supermarkets
Convenience stores
Discount stores
Off-price retailers
Superstores
Principles of Marketing, Sixth Canadian Edition
Types of Retailers (continued)
Copyright © 2005 Pearson Education Inc.
• Retail organizations:
–
–
–
–
–
Corporate chains
Voluntary chains
Retailer cooperatives
Franchise organizations
Merchandising
conglomerates
14.5
• Franchises: contractual
association between two
businesses, having three
characteristics:
• The franchiser owns a
trade or service mark, and
licenses it for use for
royalties
• Franchisees must pay to
be part of the system
• Franchisers provide a
packaged marketing and
operations system
Principles of Marketing, Sixth Canadian Edition
14.6
Retailer Marketing Decisions
Copyright © 2005 Pearson Education Inc.
• Target markets chosen will affect all other decisions
• Markets chosen and positioning need to be clear
• Cannot hope to be “something for everyone”
• Product variables:
– Assortment
– Services mix
– Atmospherics
Figure 14.1
• Price decision:
– Markups and volume
are inversely related
Principles of Marketing, Sixth Canadian Edition
Retailer Marketing Decisions (continued)
14.7
Copyright © 2005 Pearson Education Inc.
• Promotion: retailers will use all five tools to promote themselves
– Advertising, personal selling, sales promotion, public relations,
and direct marketing
• Place decision:
– Location is critical to
attract the target market
– Central business
districts
– Shopping centres
• Regional
• Neighbourhood
– Power centres
Figure 14.1
Principles of Marketing, Sixth Canadian Edition
Future of Retailing
14.8
Copyright © 2005 Pearson Education Inc.
• Wheel of retailing concept:
– New types of retailers begin as
low-margin, low-price, and
low-status operations, but
– Evolve into higher-priced,
higher-service operations,
– Eventually becoming like the
conventional retailers they
replaced
• Other trends:
– Growth of non-store
retailing
– Retailer convergence
– Rise of megaretailers
– Importance of
technology
– Global expansion
– Retail stores as
communities
Principles of Marketing, Sixth Canadian Edition
14.9
Wholesaling
Copyright © 2005 Pearson Education Inc.
• Wholesaling: all activities involved in selling goods and services to
those buying for resale or business use
– Buy mostly from producers and resell to retailers, industrial
consumers and other wholesalers
– Perform some or all of the following functions:
• Selling and promoting
• Buying and assortment
building
• Bulk breaking
• Warehousing
• Transportation
•
•
•
•
Financing
Risk bearing
Market information
Management services
and advice
Principles of Marketing, Sixth Canadian Edition
Types of Wholesalers
Copyright © 2005 Pearson Education Inc.
• Merchant wholesalers:
–
–
–
–
Full-service wholesalers
Wholesale merchants
Industrial distributors
Limited service wholesalers:
• Cash-and-carry wholesalers
• Truck jobbers
• Drop shippers
• Rack jobbers
• Producers’ cooperatives
• Mail-order wholesalers
14.10
• Brokers and agents:
– Brokers
– Agents:
• Manufacturer’s
agents
• Selling agents
• Purchasing agents
• Commission
merchants
• Manufacturers’ sales
branches and offices
• Purchasing offices
Principles of Marketing, Sixth Canadian Edition
Wholesaler Marketing Decisions
14.11
Copyright © 2005 Pearson Education Inc.
• Wholesalers are challenged by increased competition,
demanding customers, new technologies, and more directbuying by large customers
• Must choose target markets carefully, looking for more
profitable customers to build relationships with
• Product lines carried are
Figure 14.2
chosen for profitability
• Price competition
squeezes gross margins to
very low
• Not promotion-minded
• Locations are more
industrial
Principles of Marketing, Sixth Canadian Edition
Copyright © 2005 Pearson Education Inc.
Trends in Wholesaling
14.12
• Fierce resistance to price increases
• Consolidation of suppliers
• Survival tactics:
– Focusing on adding value
– Achieving cost efficiencies
– Looking for opportunities to partner
with suppliers and customers
– Differentiate by services offered
– Global orientation
Principles of Marketing, Sixth Canadian Edition
In Conclusion…
14.13
Copyright © 2005 Pearson Education Inc.
• The learning objectives for this chapter were:
– Explain the roles of retailers and wholesalers in the marketing
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
Principles of Marketing, Sixth Canadian Edition