Chapter 16 Retail and Wholesale 1 Retailing 2 Retailer All transactions in which the buyer intends to consume the product through personal family or household use An organization that purchases products for the purpose of reselling them to ultimate consumers 3 How Retailers Enhance Value Provide services Assist in product selection Make shopping experience more convenient Location facilitates comparison shopping Demonstrate products Create utility for ultimate consumers Large retail organizations with wide product mixes employ at 4 Department Stores least 25 people 5 Discount Stores 6 Convenience Stores Self service general merchandise outlets that regularly offer brand name and private brand products at low prices Small self service stores that are open long hours and carry a narrow assortment of products usually convenience items as well as services such as automatic teller machines 7 Supermarkets 8 Superstores Large self service stores that carry a complete line of food products as well as some nonfood products Giant retail outlets that carry products ordinarily found in supermarkets but also routinely purchased consumer products Combine supermarket and discount store shopping in one 9 Hypermarkets location 10 Warehouse Clubs Large scale members only selling operations combining cash and carry wholesaling and discount retailing 11 Warehouse Showrooms Retail facilities in large low cost buildings with warehouse materials handling technology vertical merchandise displays large on premises inventories and minimal services 12 Traditional Specialty Retailers Carry a narrow product mix with deep product lines They are sometimes called limited line retailers 13 Category Killers A very large specialty store concentrating on a major product category and competing on the basis of low prices and product availability 14 Off Price Retailers Buy manufacturers seconds overruns returns and off season production runs at below wholesale prices for resale to consumers at deep discounts 15 Neighborhood Shopping Centers Usually consist of several small convenience and specialty 16 Community Shopping Centers Contain one or two department stores some specialty stores stores and convenience stores 17 Regional Shopping Centers Feature the largest department stores widest product mixes and deepest product lines of all shopping centers Superregional Shopping Centers Lifestyle Shopping Centers Power Shopping Centers o Contain the widest and deepest product mixes o Typically open air and feature upscale stores o Combine off price stores with category killers 18 Strategic Issues in Retailing Location very important Retail Positioning o The least flexible of the strategic retailing issues but o Identifying an un served or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment o Projecting a functional and psychological picture that Store Image appeals to the target market Atmospherics The physical elements in a store s design that appeal to consumers emotions and encourage buying The use of telephone Internet and non personal media to communicate product and organizational information to customers o Non store Retailing The selling of products outside the confines of a 19 Direct Marketing 20 Catalog Marketing retail facility Occurs when an organization provides a catalog from which customers make selections and place orders via mail telephone or the Internet 21 Direct Response Marketing Occurs when a retailer advertises a product and makes it available through mail or telephone orders 22 Telemarketing 23 Television Home Shopping The performance of marketing related activities by telephone Presents products to television viewers who can purchase products through toll free numbers and paying with credit cards 24 Online Retailing 25 Direct Selling Makes products available through computer connections Door to door selling it is the marketing of products to ultimate consumers through face to face sales presentations at home or in the workplace The use of machines to dispense products selected by 26 Automatic Vending customers 27 Franchising An arrangement in which a supplier or franchiser grants a dealer or franchisee the right to sell products in exchange for some type of consideration 28 Wholesaling All transactions in which products are bought for resale for 29 Wholesaler making other products or for general business operations An individual or organization that sells products which are bought for resale for making other products or for general business operations 30 Merchant Wholesalers Independently owned businesses that take title to goods assume risks associated with ownership and generally buy and resell products to other wholesalers business customers or retailers 31 Full Service Wholesalers General Merchandise Wholesalers o Carry a wide product mix but offer limited depth within product lines Limited Line Wholesalers o Carry few product lines but offer an extensive assortment of products within those lines Specialty Line Wholesalers Rack Jobbers o Offer the narrowest range of products o Full service specialty line wholesalers that own and maintain display racks in supermarkets drugstores and discount and variety stores Cash and Carry Wholesalers 32 Limited Service wholesalers o Intermediaries whose customers pay cash and furnish transportation Truck Wholesalers o Transport a limited line of products directly to customers for on the spot inspection and selection Drop Shippers o Take title to goods and negotiate sales but never take actual possession of products Mail Order Wholesalers o Use catalogs instead of sales forces to sell products to retail and business customers Internet 33 Brokers 34 Agents 35 Types of Agents Intermediaries temporarily employed by buyers or sellers in order to unite buyers and sellers Represent either buyers or sellers on a permanent basis Manufacturers Agents o Independent intermediaries who represent sellers and Selling Agents usually offer customers complete product lines o Market either all of a specified product line or a manufacturer s entire output 36 Sales Branches 37 Sales Offices Manufacturer owned intermediaries that sell products and provide support to the manufacturer s sales force Manufacturer owned operations that provide services normally associated with agents