Marketing Exam 3 Chapter 11 Learning Objectives Explain the role of retailers in the distribution channel and describe the major types of retailers Describe the major retailer marketing decisions Discuss the major trends and developments in retailing Explain the major types of wholesalers and their marketing decisions Retailing activities involved in selling goods or services directly to consumers for their personal use Retailer business whose sales come primarily from retailing o Classification based on amount of service offered breadth and depth of product lines relative prices charged way they are organized Shopper marketing using in store promotions and advertising to extend brand equity to the last mile focusing the entire marketing process toward turning shoppers into buyers at the point of sale point of purchase Levels of Service o Self service retailers serve customers who are willing to perform their own locate compare select process o Limited service retailers carry more shopping goods about which customers need information provide more sales assistance higher prices o Full service retailers carry more specialty goods assist customers in every phase of the shopping process Store Retailer Types o Specialty Store carries a narrow product line with a deep o Department store carries several product lines each line operated as a separate department o Supermarket large low cost low margin high volume self service assortment operation o Convenience store carries a limited line of high turnover convenience products at slightly higher prices o Discount store sells goods at lower prices with lower margins and higher volumes o Superstores much larger than regular supermarkets and offer a large assortment of routinely purchased food products nonfood items and services o Category killer a giant specialty store that carries a very deep assortment of a particular line o Service retailer one whose product line is a service o Off price retailer sells merchandise bought at less than regular wholesale prices and sold at less than retail o Superstore very large store for routinely purchased items Retail organizations o Corporate chain two or more outlets that are commonly owned and controlled their size allows them to buy large quantities at lower prices o Voluntary chain independent retailers engaged in group buying and common merchandising sponsored by wholesaler o Retailer cooperative group of independent retailers who jointly establish a central buying organization and conduct joint promotion efforts o Franchise organization contractual association between a franchisor manufacturer wholesaler or service organization and franchisees independent businesspeople Retailer Marketing Strategies Segmentation and Targeting o As with other types of marketers the aim for retailers is to find the customer driven marketing strategy and marketing mix that will let them create value for customers and capture value in return o Retailers must first segment and define their target markets and then decide how they will differentiate and position themselves in these markets Three major product variables o Product assortment offer merchandise that is carried by no other competitor o Services mix offer unique services o Store atmosphere create a unique store experience such as with experiential retailing EDLP everyday low pricing vs High low pricing charging higher prices on an everyday basis coupled with frequent sales and promotions A retailer s price policy must fit its target market and positioning product and service assortment the competition and economic factors Most retailers seek either high markups on lower volume or low markups on higher volume Shopping center a group of retail businesses built on a site that is planned developed owned and managed as a unit o Regional Shopping Center is the largest and most dramatic shopping center It has from 50 to more than 100 stores including two or more full line department stores o Community Shopping Center contains between 15 and 50 retail stores It contains a branch of a department store or variety store a supermarket specialty stores professional offices and sometimes a bank o Neighborhood SC or strip malls contain between 5 and 15 stores These centers which are close and convenient for consumers contain a supermarket perhaps a discount store and several service stores dry cleaner drugstore hardware store local restaurant or other stores o Power Center huge unenclosed shopping centers consisting of a long strip of retail stores such as Walmart Home Depot Costco and Best Buy o Lifestyle Center smaller open air malls with upscale stores convenient locations and nonretail activities such as a playground skating rink hotel dining establishments and a movie theater Tighter consumer spending o Impact of the Great Recession on consumers changed spending patterns Impact of the Great Recession on retailers o Cost cutting price promotions bankruptcy o New value pitches in positioning New retail forms shortening retail life cycles and retail convergence o Retail convergence merging of consumers products prices and retailers different types of retailers now sell the same products at the same prices to the same consumers Rise of megaretailers o Offer better merchandise selections good service and strong price savings to consumers o Have shifted the balance of power between retailers and producers Growth of direct online mobile and social media retailing o Availability of a variety of non store alternatives Showrooming checking out merchandise and prices in a retail showroom but buying from an online only rival Wholesaling the activities involved in selling goods and services to those buying for resale or business use o Help retailers train their salesclerks improve store layouts and displays and set up accounting and inventory control systems o Absorb risk by taking title and bearing the cost of theft damage spoilage and obsolescence o Can provide quicker delivery to buyers because they are closer to buyers than are producers Types of Wholesalers o Merchant wholesalers the largest single group of wholesalers accounting for roughly 50 percent of all wholesaling include two broad types full service wholesalers and limited service wholesalers Full service wholesalers provide a full set of services Limited service wholesalers offer fewer services to their suppliers and customers o Brokers and agents do not take title to goods and second perform only a few functions