Transcript Retailers
A Global Perspective Philip Kotler Gary Armstrong Swee Hoon Ang Siew Meng Leong Chin Tiong Tan Oliver Yau Hon-Ming 13 Retailing and Wholesaling Copyright © 2009 Pearson Education South Asia Pte Ltd PowerPoint slides adapted by Oliver Yau Hon-Ming 13-1 Chapter Outline 1. Retailing 2. Wholesaling * Carrefour: 12,500 stores, $13.7 bil. Sales -> Positioning away from Wal-Mart * Wal-Mart: 6,500 stores, $312 bil. Sales #1 in groceries, toys, CDs, pet-care products,…, the lowest cost structure! Copyright © 2009 Pearson Education South Asia Pte Ltd 13-2 Retailing • Retailing includes all the activities in selling products or services directly to final consumers for their personal, non-business use. • Retailers are businesses whose sales come primarily from retailing. * Non-store retailing Copyright © 2009 Pearson Education South Asia Pte Ltd 13-3 Retailing • Non-store retailing includes selling to final consumers through: • Direct mail • Catalogs • Telephone • Internet • TV shopping • Home and office parties • Door-to-door sales • Vending machines Copyright © 2009 Pearson Education South Asia Pte Ltd 13-4 Retailing Types of Retailers • Classified in terms of • Amount of service • Product lines • Relative price Copyright © 2009 Pearson Education South Asia Pte Ltd 13-5 Retailing Types of Retailers • Amount of service • Self-service • Limited service • Full service Copyright © 2009 Pearson Education South Asia Pte Ltd 13-6 Retailing Amount of Service • Self-service retailers serve customers who are willing to perform their own locatecompare-select process to save money. • Wal-Mart • Supermarkets Copyright © 2009 Pearson Education South Asia Pte Ltd 13-7 Retailing Amount of Service • Limited service retailers provide more sales assistance because they carry more shopping goods about which customers need more information. • Sears, Sasa, etc. • JC Penney Copyright © 2009 Pearson Education South Asia Pte Ltd 13-8 Retailing Amount of Service • Full-service retailers assist customers in every phase of the shopping process, resulting in higher costs that are passed on to the customer as higher prices. • Department stores • Specialty stores Copyright © 2009 Pearson Education South Asia Pte Ltd 13-9 Retailing Types of Retailers: Product Line • Specialty stores carry narrow product lines with deep assortments within the product lines. • Department stores carry a wide variety of product lines. • Convenience stores carry a limited line of high-turnover convenience goods. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-10 Retailing Types of Retailers: Product Line • Superstores offer a large assortment of routinely purchased food products, non-food items, and services. • Supercenters have very large combination food and discount stores. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-11 Retailing Types of Retailers: Product Line • Category killers are large stores that carry a very deep assortment of a particular line with knowledgeable staff. • Service retailers’ product lines are actually service. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-12 Retailing Types of Retailers: Relative Prices • Discount stores • Off-price retailers • Factory outlets • Warehouse clubs Copyright © 2009 Pearson Education South Asia Pte Ltd 13-13 Retailing Types of Retailers: Relative Prices • Discount stores sell standard merchandise at lower prices by accepting lower margins and selling higher volume. • Off-price retailers buy at less than regular wholesale prices and charge customers less than retail. • Independent off-price retailers are either owned and run by entrepreneurs or are divisions of larger retail corporations. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-14 Retailing Types of Retailers: Relative Prices • Factory outlets are producer-operated stores. • Warehouse clubs are large, warehouse-like facilities with few frills and offer ultra-low prices. © Joe Bennett Copyright © 2009 Pearson Education South Asia Pte Ltd 13-15 Retailing Types of Retailers: Organization Approach • Corporate chain stores • Voluntary chain stores • Retailer cooperatives • Franchise organizations • Merchandising conglomerates Copyright © 2009 Pearson Education South Asia Pte Ltd 13-16 Retailing Types of Retailers: Organization Approach • 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. • Sears • Watsons Copyright © 2009 Pearson Education South Asia Pte Ltd 13-17 Retailing Types of Retailers: Organization Approach • Voluntary chains are wholesale-sponsored groups of independent retailers that engage in group buying and common merchandising. • IGA(Independent Grocers Alliance) • Lukfook Jewellery (六福集團有限公司) Copyright © 2009 Pearson Education South Asia Pte Ltd 13-18 Retailing Types of Retailers: Organization Approach • Retailer cooperative is a group of independent retailers that band together to set up a jointly-owned, central wholesale operation, and to conduct joint merchandising and promotion efforts. • Mitre 10 • Associated Grocers Copyright © 2009 Pearson Education South Asia Pte Ltd 13-19 Retailing Types of Retailers: Organization Approach • Franchise organizations are based • On some unique product or service • On a method of doing business • On the trade name, good will, or patent that the franchisor has developed • McDonald’s, Pizza Hut, etc. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-20 Retailing Types of Retailers: Organization Approach • Merchandising conglomerates are corporations that combine several retailing forms under central ownership. • Limited Brands Copyright © 2009 Pearson Education South Asia Pte Ltd 13-21 Retailing Retailer Marketing Decisions • Target marketing and positioning • Product assortment and services • Price • Promotion • Place Copyright © 2009 Pearson Education South Asia Pte Ltd 13-22 Retailing Retailer Marketing Decisions • Target market and positioning involves the definition and profile of the market so the other retail marketing decisions can be made. • Product assortment and service decisions include: • Product assortment • Services mix • Store atmosphere Copyright © 2009 Pearson Education South Asia Pte Ltd 13-23 Retailing Retailer Marketing Decisions • Product assortment should differentiate the retailer while matching target shoppers’ expectations. • Offers merchandise that no other competitor carries. • Private or national brands • Merchandising events: Bloomingdale’s • Highly targeted product assortment: (ex) + size clothing) Copyright © 2009 Pearson Education South Asia Pte Ltd 13-24 Retailing Retailer Marketing Decisions • Services mix should also serve to differentiate the retailer from the competition. • Customer support • Store atmosphere is the physical layout that makes moving around the store hard or easy. • Experiential retailing • Test driving * Apple stores (p. 345) Copyright © 2009 Pearson Education South Asia Pte Ltd 13-25 Retailing Retailer Marketing Decisions: Price Decisions • Price policy must fit the target market and positioning, product and service assortment, and competition. • High markup on lower volume • Low markup on higher volume Copyright © 2009 Pearson Education South Asia Pte Ltd 13-26 Retailing Retailer Marketing Decisions: Price Decisions • High-low pricing involves charging higher prices on an everyday basis, coupled with frequent sales and other price promotions to increase store traffic, clear out unsold merchandise, create a low price images, or attract customers who will buy other goods at full price. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-27 Retailing Retailer Marketing Decisions: Price Decisions • Everyday low prices (EDLP) involves charging a constant, everyday low price with few sales or discounts. © Wal-Mart Stores, Inc. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-28 Retailing Retailer Marketing Decisions: Promotion Decision • Advertising • Personal selling • Sales promotion • Public relations • Direct marketing Copyright © 2009 Pearson Education South Asia Pte Ltd 13-29 Retailing Retailer Marketing Decisions: Place Decision • Location • Accessibility • Consistent with positioning Copyright © 2009 Pearson Education South Asia Pte Ltd 13-30 Retailing Retailer Marketing Decisions: Place Decision © Florian Pusch • Central business districts are located in cities and include department and specialty stores, banks, and movie theaters. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-31 Retailing Retailer Marketing Decisions: Place Decision • A shopping center is a group of retail businesses planned, developed, owned, and managed as a unit. • Regional shopping centers: 40 to 200+ stores • Community shopping centers: 15 to 40 stores • Neighborhood shopping centers: 5 to 15 stores • Power centers: unenclosed shopping centers • Lifestyle centers vs. Megamalls (p.347) Copyright © 2009 Pearson Education South Asia Pte Ltd 13-32 Retailing The Future of Retailing • Retailers have to choose target segments carefully, position themselves strongly, and consider the following developments as they plan and execute their competitive strategies: • Non-store retailing • • • • Retail convergence Megaretailers Retail technology Global expansion • Retail stores as communities Copyright © 2009 Pearson Education South Asia Pte Ltd 13-33 Retailing The Future of Retailing New Retailing Forms and Shortening Life Cycles • The wheel-of-retailing concept states that many types of retailing forms begin as low-margin, lowprice, low-status operations and challenge established retailers. • As they succeed, they upgrade their facilities and offer more services, increasing their costs and forcing them to increase prices, eventually becoming the retailers they replaced. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-34 Retailing The Future of Retailing New Retailing Forms and Shortening Life Cycles • Growth of non-store retailing includes: • Mail order • Television • Phone • Online * The Click only vs. click-and-brick marketers Copyright © 2009 Pearson Education South Asia Pte Ltd 13-35 Retailing The Future of Retailing New Retailing Forms and Shortening Life Cycles • Retail convergence involves • The merging of consumers, producers, prices, and retailers • Creates greater competition for retailers and greater difficulty differentiating offerings Copyright © 2009 Pearson Education South Asia Pte Ltd 13-36 Retailing The Future of Retailing New Retailing Forms and Shortening Life Cycles • The rise of megaretailers involves the rise of mass merchandisers and specialty superstores, the formation of vertical marketing systems, and a rash of retail mergers and acquisitions. • Superior information systems • Buying power: Wal-Mart generates 20% of P&G sales. • Large selection Copyright © 2009 Pearson Education South Asia Pte Ltd 13-37 Retailing The Future of Retailing New Retailing Forms and Shortening Life Cycles • Retail technology includes video-casts, inventory control, electronic ordering, transfer of information, scanning, online transaction processing, improved merchandise handling systems, and the ability to connect with customers. Ex: Electronic shelf labels, SKYphoto’s touch screen kiosk @ Chek Lap Kok airport Copyright © 2009 Pearson Education South Asia Pte Ltd 13-38 Wholesaling Wholesaling • Wholesalers add value by performing channel functions • Selling and promoting • Financing • Buying and assortment building • Risk bearing • Bulk breaking • Warehousing • Market information • Management services and advice • Transportation Copyright © 2009 Pearson Education South Asia Pte Ltd 13-39 Wholesaling • Selling and promoting involves the wholesaler’s sales force helping the manufacturer reach many smaller customers at lower cost. • Buying and assortment building involves the selection of items and building of assortments needed by their customers, saving the customers work. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-40 Wholesaling • 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. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-41 Wholesaling • 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. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-42 Wholesaling • 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. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-43 Wholesaling Types of Wholesaler • Merchant wholesalers • Agents and brokers • Manufacturers’ sales branches and offices Copyright © 2009 Pearson Education South Asia Pte Ltd 13-44 Wholesaling Types of Wholesaler • Merchant wholesalers is the largest group of wholesalers and includes • Full-service wholesalers who provide a full set of services • Limited-service wholesalers who provided few services and specialized functions. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-45 Wholesaling Types of Wholesaler • 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. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-46 Wholesaling Types of Wholesaler • Manufacturers’ sales branches and offices is a form of wholesaling by sellers or buyers themselves rather than through independent wholesalers. Copyright © 2009 Pearson Education South Asia Pte Ltd 13-47 Wholesaling Wholesaler Marketing Decisions • Target market and positioning decisions • Marketing mix decisions Copyright © 2009 Pearson Education South Asia Pte Ltd 13-48 Wholesaling Wholesaler Marketing Decisions • Target market and positioning decisions • Size of customer • Type of customer • Need for service Copyright © 2009 Pearson Education South Asia Pte Ltd 13-49 Wholesaling Wholesaler Marketing Decisions • Marketing mix decisions • Product • Price • Promotion • Place Copyright © 2009 Pearson Education South Asia Pte Ltd 13-50 Wholesaling Trends in Wholesaling • Challenges • Resistance to price increases • Lack of suppliers • Changing customer needs • Adding value by increasing efficiency and effectiveness Copyright © 2009 Pearson Education South Asia Pte Ltd 13-51