Transcript KotlerMM_ch16

MARKETING MANAGEMENT
12th edition
16
Managing Retailing,
Wholesaling, and Logistics
Kotler
Keller
Chapter Questions
What major types of marketing
intermediaries occupy this sector?
 What marketing decisions do these
marketing intermediaries make?
 What are the major trends with marketing
intermediaries?
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16-2
Retailing
Includes all the activities involved in
selling goods or services directly
to final consumers for personal,
nonbusiness use.
16-3
Table 16.1 Major Retailer Types
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Specialty store
Department store
Supermarket
Convenience store
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Discount store
Off-price retailer
Superstore
Catalog showroom
16-4
Levels of Retail Service
Self-service
 Self-selection
 Limited service
 Full service
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16-5
Nonstore Retailing
Direct selling
 Direct marketing
 Automatic vending
 Buying service
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16-6
Major Types of Corporate Retail
Organizations
Corporate chain store
 Voluntary chain
 Retailer cooperative
 Consumer cooperative
 Franchise organization
 Merchandising conglomerate
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16-7
Retailers’ Marketing Decisions
Target market
 Product assortment
 Service/store atmosphere
 Price
 Communication
 Location
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16-8
Retail Category Management
Define the category
Figure out its role
Assess performance
Set goals
Choose the audience
Figure out tactics
Implement the plan
16-9
Retailer Services Mix
Prepurchase services
 Postpurchase services
 Ancillary services
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16-10
Location Decision
General business districts
 Regional shopping centers
 Community shopping centers
 Strip malls
 Location within a larger store
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16-11
Indicators of Sales Effectiveness
Number of people passing by location
 Percentage who enter store
 Percentage of those who enter who also
buy
 Average amount spent per sale
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16-12
Trends in Retailing
New retail forms and combinations
 Growth of intertype competition
 Competition between store-based and
non-store-based retailing
 Growth of giant retailers
 Decline of middle market retailers
 Growing investment in technology
 Global presence of major retailers
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16-13
Wholesaling Functions
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Selling and promoting
Buying and
assortment building
Bulk breaking
Warehousing
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Transportation
Financing
Risk bearing
Market information
Management services
and counseling
16-14
Major Wholesaler Types
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Merchant
Full service
Limited service
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Brokers and agents
Manufacturers
Specialized
16-15
Wholesalers’ Marketing Decisions
Target market
 Product assortment
 Price
 Promotion
 Place
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16-16
Market Logistics Planning
Deciding on the company’s value
proposition to its customers
 Deciding on the best channel design and
network strategy
 Developing operational excellence
 Implementing the solution
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16-17
Market Logistics Decisions
How should orders be handled?
 Where should stock be located?
 How much stock should be held?
 How should goods be shipped?
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16-18
Transportation Factors
Speed
 Frequency
 Dependability
 Capability
 Availability
 Traceability
 Cost
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16-19
What is Retailing?
Retailing includes all the activities involved in selling
goods or services directly to final consumers for personal,
non-business use
A retailer or Retail store:
is any business enterprise whose sales volume comes
primarily from retailing
Retail Life-cycle:
Like products Retail-store pass through stages of growth
and decline
Major Retailer Types
Department store
Supermarket
Off-price retailer
Specialty store
Discount store
Superstore
Convenience store
Catalog showroom
Retailers Level of Service
1. Self–Service: customers carry out their own- locate,
compare, and select process to save money
2. Self-Selection: customers find their own goods,
although they can ask for assistance
3. Limited services: these retailers carry more shopping
goods and services such as credit and merchandise
return privilege. Customer need more assistance and
information
4. Full service: salespeople are ready to assist in every
phase of the - locate, compare, and select process
Non-store Retailing
• Direct selling: companies selling door-to-door or at
home sales parties, it can be:
o One-to-one
o One-to-many
o Multilevel marketing network
• Direct marketing: include telemarketing, television
direct –response marketing , and electronic shopping
Non-store Retailing
• Automatic vending: vending machines are found in
many places as: factories, offices, large retail store
Japan has the most vending machines
• Buying service: is a store-less retailer serving a
specific clientele “usually employees of large
organization“ who are entitled to buy from a list of
retailers that have agreed to give discounts in return for
member ship
Major Types of Corporate
Retail Organizations
• Corporate chain store: two or more out lets owned and
controlled, employing central buying merchandise and
selling similar lines of merchandise
• Voluntary chain: a wholesaler- sponsored group of
independent retailers engaged in bulk buying and
common merchandising
Major Types of Corporate
Retail Organizations
• Retailer cooperative: Independent retailers using a
central buying organization efforts
• Consumer cooperative: a retail firm owned by its
customers. Members contribute money to open their
own store , vote on its polices, elect a group to manage
it, and receive dividends
Major Types of Corporate
Retail Organizations
• Franchise organization: contractual association
between a franchisor and franchisees
• Merchandising conglomerate: a corporate that
combines several diversified retailing in lines and forms
under central ownership
Franchising System
A franchising system is a system of individual
franchisees, a tightly knit group of enterprises whose
systematic operations are planned, directed, and
controlled by the operation’s franchisor.
Characteristics of
Franchises
• The franchisor owns a trade or service mark and
licenses it to franchisees in return for royalty
payments
• The franchisee pays for the right to be part of the
system
• The franchisor provides its franchisees with a
system for doing business
Changes in the Retail
Environment
• New retail forms and combinations
• Growth of intertype competition
• Competition between store-based and nonstore-based retailing
• Growth of giant retailers
• Decline of middle market retailers
• Growing investment in technology
• Global profile of major retailers
Retailers’ Marketing Decisions
• Target market
• Product assortment:
o Must match target market expectation
o Decide product assortment breadth and depth
• Procurement
• Prices:
o Must be decided in relation to the target market, the
product assortment and the competition
Retailers’ Marketing Decisions
• Services:
o Pre-purchase services as advertising and accept telephone
and mail orders
o Post-purchase services as gift wrapping and shipping and
delivery
o Ancillary services as parking, general information and rest
room
• Store atmosphere as walls, lighting, Product placement, and
floor
• Store activities
• Communications tools as ads, run special sales, and issue
Retailers’ Marketing Decisions
• Location decision:
o Central business district “down town”
o Regional shopping centers
o Community shopping centers
o Shopping strips “cluster of stores”
o A location within a larger store
Retail Category Management
Define
the
categor
y
Figure
out its
role
Assess
perform
ance
Set
goals
Choose
the
audienc
e
Figure
out
tactics
Implem
ent the
plan
Tips for Increasing Sales
in Retail Space
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Attract and Keep shoppers in the store
Honor the transition zone
Don’t make them hunt
Make merchandise available to the reach
and touch
• Note that men do not ask questions
• Remember women need space
• Make checkout easy
Indicators of Sales
Effectiveness
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Number of people passing by
Percent who enter store
Percent who buy
Average amount spent per sale
Private Label Brands
A privatee- label brand( a reseller, store, house)
is a brand that retailers and wholesalers develop
Why do intermediaries bother to sponsor their own
brands?
• They can be more profitable
• Retailers develop exclusive store to differentiate
themselves from competitors
Ex: Canadian company LOBLAW which start as local
store brand and then become global
Wholesaling
Wholesaling includes all the activities in selling
goods or services to those who for resale or
business use
Ex:
Wholesaling Functions
Selling and
promoting
Management
services and
counseling
Buying and
assortment
building
Market
information
Bulk breaking
Risk bearing
Warehousing
Financing
Transportation
Major Wholesaler Types
Merchant
Specializ
ed
Fullservice
wholesal
er
Manufact
urers
Limitedservice
Brokers
and
agents
Market Logistics
Market logistic includes planning the infrastructure to
meet demand, then implementing and controlling the
physical flow of materials and goods from points of
origin to points of use to meet customer requirements
at profit
Market Logistics Planning
• Deciding on the company’s value proposition to its
customers
• Deciding on the best channel design and network
strategy
• Developing operational excellence
• Implementing the solution
What are
Integrated Logistics Systems?
An integrated logistics system (ILS)
includes materials management, material
flow systems, and physical distribution, aided
by information technology.
Market Logistics Activities
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Sales forecasting
Distribution scheduling
Production plans
Finished-goods inventory
decisions
• Packaging
• In-plant warehousing
• Shipping-room
processing
• Outbound
transportation
• Field warehousing
• Customer delivery and
servicing
Market Logistics Decisions
• How should orders be handled?(Order
processing)
• Where should stock be located?(Warehousing)
• How much stock should be held?(Inventory)
• How should goods be shipped?(
Transportation)