CHAPTER 11: Retailing and Wholesaling

Shopper marketing:

Focusing the entire marketing process—from product and brand development to logistics, promotion, and merchandising—toward turning shoppers into buyers as they move along toward the point of sale.

Omni-channel marketing:

 Creating a seamless cross-channel buying experience that integrates in-store, digital, and mobile shopping.

Organizational approach: The four major types of retail organizations are

Corporate chains: Two or more outlets that are commonly owned and controlled.

Franchise: Franchise systems are normally based on some unique product or service; a method of doing business; or the trade name, goodwill, or patent that the franchisor has developed.

Voluntary chain: A wholesaler-sponsored group of independent retailers that engages in group buying and common merchandising.

Retailer cooperative: A group of independent retailers that bands together to set up a jointly owned, central wholesale operation and conduct joint merchandising and promotion efforts.

Direct mail marketing:

Sending an offer, announcement, reminder, or other item to a person at a particular address. 

• high target market selectivity can be personalized, is flexible, and allows the easy measurement of results

Catalog marketing:

 Form of direct marketing where companies send catalogs—either printed or digital—to customers to showcase their products and drive sales.

Telemarketing:

sing the telephone to sell directly to consumers and business customers.

• Outbound telephone marketing to sell to consumers and businesses.

• Inbound toll-free numbers to receive orders referred from television and print ads, direct mail, catalogs, websites, and phone apps.

Omni-channels:

 Integrated shopping experience across multiple channels—both online and offline. 

3 Retailers’ key product decisions:

Product assortment: Differentiate by offering unique or exclusive products (e.g., store brands, exclusive national brands).

Services mix: Enhance customer experience with personalized service, consultations, and special programs (e.g., Home Depot’s DIY workshops, Nordstrom’s top-notch customer service).

Store atmosphere: Create a unique shopping experience that aligns with the brand and target market (e.g., experiential retailing).

3 Price decisions

High markup, low volume: Used by luxury or specialty stores (e.g., Bergdorf Goodman).

Low markup, high volume: Used by discount and mass retailers (e.g., Walmart, TJ Maxx).

Everyday low pricing (EDLP): Constant low prices with few promotions (e.g., Walmart, Costco).

Promotion decision:

How a retailer communicates with customers to attract them, boost sales, and build brand loyalty.

Place decision

How and where a retailer chooses to locate and distribute its products to reach its target customers effectively.

3 place decisions

High-End Locations: Luxury brands like Apple or Bergdorf Goodman place stores in premium shopping districts.

Low-Cost Locations: Discount retailers like Trader Joe’s opt for lower-rent areas to keep costs down.

Clustered Retailing: Many stores group together (e.g., shopping malls, power centers) to attract more foot traffic.

Specialty stores

Carry narrow product lines with deep assortments within those lines.

Department stores

Carry a wide variety of product lines but face competition from both specialty stores and discounters.

Supermarkets

Most frequently visited retail stores but face slow sales growth.

Convenience stores

Small retail stores with a limited selection of high-turnover convenience goods.

Superstores

Much larger than regular supermarkets and offer a large assortment of routinely purchased food products, nonfood items, and services.

Service retailer

The product line is a service like hotels, banks, airlines, restaurants, colleges, hospitals, movie theaters.

Discount stores

Sells standard merchandise at lower prices by accepting lower margins and selling higher volume.

Off-Price Retailers

Fill the ultralow-price, high-volume gap. Ordinary discounters buy at regular wholesale prices and accept lower margins to keep prices down.

Wholesaling:

all the activities involved in selling goods and services to those buying them for resale or business use.

Selling and promoting

Wholesalers’ sales forces help manufacturers reach many small customers at a low cost. The wholesaler has more contacts and is often more trusted by the buyer than the distant manufacturer.

Buying and assortment building

Wholesalers can select items and build assortments needed by their customers, thereby saving much work.

Bulk breaking

Wholesalers save their customers money by buying in truckload lots and breaking bulk (breaking large lots into small quantities).

Warehousing

Wholesalers hold inventories, thereby reducing the inventory costs and risks of suppliers and customers.

Transportation

Wholesalers can provide quicker delivery to buyers because they are closer to buyers than are producers.

Financing

Wholesalers finance their customers by giving credit, and they finance their suppliers by ordering early and paying bills on time.

Risk bearing

Wholesalers absorb risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence.

Market information

Wholesalers give information to suppliers and customers about competitors, new products, and price developments.

Management services and advice

Wholesalers often help retailers train their salesclerks, improve store layouts and displays.