chapter 16 - retailing and wholesaling

form of ownership

distinguishes retail outlets based on whether independent retailers, corporate chains, or contractual systems own the outlet

level of service

describes the degree of service provided to the customer, which are self, limited, and full

merchandise line

describes how many different types of products a store carries and in what assortment

independent retailer

one of the most common forms of retail ownership that can offer convenience, personal service, and lifestyle compatibility

corporate chain

multiple outlets under common ownership; centralization in decision making and decision making

contractual system

involve independently owned stores that band together to act like a chain; members take advantage of volume discounts

self-service

requires that customers perform many functions during the purchase process; all nonessential customer services are eliminated

limited-service

provide some services, but not others; customers are responsible for most shopping activities, although salespeople are available

full-service

provide many services to their customers; rely on better service to sell more distinctive, higher-margin goods and retain customers

depth of product line

a store carries a large assortment of each item

breath of product line

the variety of different items a store carries

specialty outlets

include both limited- and single-line stores

category killers

specialty discount outlets focus on one type of product at very competitive prices

general merchandise stores

stores that carry a broad product line with limited depth

scrambled merchandising

offering several unrelated product lines in a single store

hypermarket

large stores aiming to offer everything under one roof, thus eliminating the need to stop at more than one location

supercenter

a variation of the hypermarket that combines a typical merchandise store with a full-sized grocery store

intertype competition

competition between very dissimilar types of retail outlets created by scrambled merchandising

automatic vending

nonstore retailing machines that make it possible to serve customers when and where stores cannot

catalog retailing

the store that comes to the door; eliminates the cost of a store and clerks and increases segmentation and targeting

television home shopping

customers watch a channel on TV where products are displayed, then place orders over the phone or internet

online retailing

allows consumers to search for, evaluate, and order products to the internet

intermediaries, marketplaces, aggregators

the three types of social shopping options of online retailing

telemarketing

using the telephone to interact with and sell directly to consumers

direct selling

involves sales of products and services to consumers through personal interactions and demonstrations in their home or office

retail positioning matrix

a tool used to label retail outlets on two dimensions: breadth of product line and value added

retailing mix

activities related to managing the store and merchandise in the store

pricing, location, communication, merchandise

four parts of the retailing mix

markup

how much should be added to the cost the retailer paid for a product to reach the final selling price

original markup

difference between retailer cost and initial selling price

maintained markup

aka gross margin; difference between final selling price and retailer cost

markdown

the product does not sell at the original price and an adjustment is necessary

everyday low pricing

a retail pricing strategy where consistently low prices are part of regular merchandising policy; eliminates markdowns

off-price retailing

selling brand-name merchandise at lower than regular prices

warehouse club

off-price retailers that are rather stark outlets that lack elaborate displays and require an annual membership fee to shop there

outlet store

off-price retailers that sell excess merchandise and reach customers who focus on value shopping

single-price retailer

an off-price retailer that attract customers who want value and a corner store environment rather than a large supercenter experience

central business district

the oldest retail setting; the community’s downtown area

regional shopping centers

consist of 50-150 stores that typically attract customers who live or work within a 5- to 10-mile range; contain two or three anchor stores

community shopping center

typically have one primary store and about 20-40 smaller outlets; serve a population of consumers who are within a 10- to 20-minute drive

strip mall

neighborhood cluster of stores to serve people who are within a 5- to 10-minute drive

power center

a huge shopping strip with multiple anchor stores; combine the convenience of location provided by strip malls with the power of national stores

retail image

the way in which a store is defined in the shopper’s mind, partly by its functional qualities and partly by an aura of psychological attributes

shopper marketing

the use of displays, coupons, product samples, and other brand communications to influence shopping behavior in a store

category management

assigns a manager the responsibility for selecting all products that consumers in a market might view as substitutes for each other

wheel of retailing

describes how new forms of retail outlets enter the market; start with low prices, margins, and status and increase until a new form of outlet emerges

early growth, accelerated development, maturity, decline

four stages of the retail cycle

multichannel retailer

retailers that utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs, television home shopping, and online retailing

merchant wholesalers

aka industrial distributors; independently owned firms that take title to the merchandise the handle

general merchandise wholesaler

a type of full-service merchant wholesaler that carries a borad assortment of merchandise and perform all channel functions

specialty merchandise wholesaler

a type of full-service merchant wholesaler that offers a relatively narrow range of products but have an extensive assortment with the product carried

rack jobbers

a type of limited-service wholesaler that furnishes the racks or shelves that display merchandise in retail stores, perform all channel functions, and sell on consignment to retailers

cash and carry wholesalers

a type of limited-service wholesaler that takes title to merchandise but sells only to buyers who call on them, pay cash for merchandise, and furnish their own transportation for merchandise

manufacturers agents

work for several producers and carry noncompetitive, complementary merchandise in an exclusive territory

selling agents

represent a single producer and are responsible for the entire marketing function of that producer

brokers

independent firms or individuals whose principal function is to bring buyers and sellers together to make sales

manufacturers branch office

carries a producer’s inventory and performs the functions of a full-service wholesaler

manufacturers sales office

does not carry inventory, typically performs only a sales function, and serves as an alternative to agents and brokers