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.

STORE RETAILER TYPES:

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.

• Independent off-price retailers are independently owned or divisions of larger retail chains.

• Factory outlets are manufacturer-owned off-price retail stores—operated by firms such as Gap

• Warehouse clubs such as Costco and BJ’s, operate in huge, warehouse-like facilities and offer few features 

Organizational approach: The four major types of retail organizations:

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: Using 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. 

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).

Price decision:

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.

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.

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 display