30015
Marketing
Prof. Elena Bellio
(c) Elena Bellio 2023 - for teaching purposes only
Principles of Marketing
Nineteenth Edition, Global Edition
Chapter 13
Retailing and Wholesaling
Retailing: Connecting Brands with
Consumers (1 of 2)
Retailing includes all the activities in selling products or
services directly to final consumers for their personal,
nonbusiness use.
Retailers are businesses whose sales come primarily from
retailing.
Shopper Marketing focuses the entire marketing process
on turning shoppers into buyers as they approach the point
of sale, whether during in-store, online, or mobile shopping.
Retailing: Connecting Brands with
Consumers (2 of 2)
Omni-channel retailing creates a seamless cross-channel
buying experience that integrates in-store, online, and mobile
shopping, creating a single shopping experience.
The new retailing model:
Digital technologies have
caused a massive shift in how
and where people buy.
Today’s retailers must adopt
omni-channel marketing that
integrates in-store, online,
and mobile shopping. A S photostudio/Shutterstock
Omnichannel
(c) Elena Bellio 2023 - for teaching purposes only
Types of Retailers (1 of 8)
Amount of Service Classifications
Self-service
Limited service
Full service
8
Full service
9
10
Types of Retailers (2 of 8)
Product Line Classifications
Specialty stores: like shoe stores, carry narrow product lines with deep
assortments within those lines.
Department stores: carry a wide variety of product lines. In recent years,
department stores have been squeezed between more focused and flexible
specialty stores on the one hand and more efficient, lower-priced discounters
on the other.
Supermarkets
Convenience stores: are small stores that carry a limited line of high-turnover
convenience goods.
Superstores: are much larger than regular supermarkets and offer a large
assortment of routinely purchased food products, nonfood items, and
services.
Off-price retailer: based on discount pricing. Off-price retailers are
independent of manufacturers and buy large volumes of branded goods
directly from them.
Types of Retailers (3 of 8)
Relative Price Characteristics
Discount stores
Off-price retailers
Factory outlets
Warehouse clubs
Types of Retailers (4 of 8)
Major Types of Retail Organizations
Type Description Examples
Corporate Two or more outlets that are commonly owned Macy’s (department stores),
chain and controlled. Corporate chains appear in all Target (discount stores), Kroger
types of retailing but they are strongest in (grocery stores), CVS (drugstores)
department stores, discount stores, food stores,
drugstores, and restaurants.
Voluntary Wholesaler-sponsored group of independent Independent Grocers Alliance
chain retailers engaged in group buying and (IGA), Western Auto (auto supply),
merchandising. True Value (hardware)
Retailer Group of independent retailers who jointly Associated Grocers (groceries),
cooperative establish a central buying organization and Ace Hardware (hardware)
conduct joint promotion efforts.
Franchise Contractual association between a franchisor (a McDonald’s, Subway, Pizza Hut,
organization manufacturer, wholesaler, or service organization) Jiffy Lube, Meineke Mufflers,
and franchisees (-independent businesspeople 7-Eleven
who buy the right to own and operate one or more
units in the franchise system).
Types of Retailers (5 of 8)
Organizational Form
Corporate chains are two or
more outlets that are commonly
owned and controlled.
Size allows them to buy in
large quantities at lower
prices and gain promotional
economies
– Macy’s
Oleksiy Maksymenko Photography/Alamy Stock Photo
Warehouse clubs: Costco is a
retail treasure hunt, where both
low-end and high-end products
meet deep-discount prices.
Types of Retailers (6 of 8)
Organizational Form
Voluntary chains are wholesale-sponsored groups of
independent retailers that engage in group buying and
common merchandising.
Types of Retailers (7 of 8)
Organizational Form
Retailer cooperatives are a group of independent retailers
that band together to set up a joint-owned, central wholesale
operation and conduct joint merchandising and promotion
efforts.
Types of Retailers (8 of 8)
Organizational Form
Franchises are contractual
associations between a
manufacturer, wholesaler, or
service organization (a franchisor)
and independent business people
(franchisees) who buy the right to
own and operate one or more units
in the franchise system.
Franchising: Franchising covers a
lot more than just burger joints and
fitness centers. Century 21 consists Gado Reportage/Alamy Stock Photo
of over 127,000 independent
agents working in more than 9,400
franchise offices in 80 countries.
Non-Store Direct Retailing
Direct-mail marketing
Catalog marketing
Telemarketing
Direct-response television (D R T V) marketing
Infomercials
Omni-Channel Retailing
The key to omni-channel
retailing is to integrate
channels for a seamless
buying experience.
Omni-channel marketing:
Used-car giant CarMax makes
the entire used-car buying
experience simple and
seamless across its digital and
store shopping channels.
Courtesy of CarMax
Retailer Marketing Decisions (1 of 7)
Figure 13.1 Retailer Marketing Strategies
Retailer Marketing Decisions (2 of 7)
Segmentation targeting,
differentiation, and positioning
involve the definition and profile of
the market so the other retail
marketing decisions can be made.
Retail targeting and positioning: Oscar Health Insurance
Oscar Health targets young, digitally
savvy consumers with simple,
affordable health insurance plans
“that won’t make your head
explode,
... and if it does, you’re covered.”
Oscar’s business is booming.
Retailer Marketing Decisions (3 of 7)
Major product variables:
Product assortment
Services mix
Store atmosphere
Experiential retailing: adidas’s stadium-like flagship store on Fifth Avenue
in New York City carries about every product that adidas offers. But the
store focuses as much on offering customer experiences as on selling
products.
Eyal Dayan Photography
Experiences
(c) Elena Bellio 2023 - for teaching purposes only
Retailer Marketing Decisions (4 of 7)
Price Decision
Price policy must fit the target market
and positioning, product and service
assortment competition, and economic
factors
High markup on lower volume
Low markup on higher volume
Retail price positioning: T J Maxx sells
brand-name clothing at everyday
discount prices aimed at middle-income
Americans.
Matthew Staver/Bloomberg/Getty Images
Retailer Marketing Decisions (5 of 7)
Price Decision
Everyday low pricing (EDLP) involves charging constant,
everyday low prices and offering few sales or discounts.
High-low pricing involves charging higher prices on an everyday
basis, coupled with frequent sales and other price promotions.
Experiential retailing: Wegmans
has mastered the art and science
of retail atmospherics. Beyond a
deep product selection and
award-winning service, store
sections are carefully designed to
reinforce the fresh market
atmosphere of a European open-
Courtesy of Wegmans Food Markets
air market.
Retailer Marketing Decisions (6 of 7)
Promotion Decision
Advertising
Personal selling
Sales promotion
Public relations
Direct marketing
Retailer promotion: Many
retailers personalize promotions
to individual customers via their
websites, mobile apps, and other C V S Caremark Corporation
digital platforms. C V S/pharmacy
uses its mobile app and email to
send personalized promotions to
the chain’s 80 million ExtraCare
loyalty program members.
Retailer Marketing Decisions (7 of 7)
Place Decision
Central business districts are located in cities and include
department and specialty stores, banks, and movie theaters.
A shopping center is a group of retail businesses planned,
developed, owned, and managed as a unit.
Retailing Trends and Developments (1 of
6)
Increased Uncertainty and Disruption
Tighter Consumer spending
Changed consumer spending
patterns
Some retailers benefit
Other retailers have tough times
When reacting to economic shifts,
retailers must be careful that their
short-run actions don’t damage their
long-run reputations and
positioning. Iconic retailer Macy’s
CatLane/Getty Images
has fallen into the “deep discount
trap”—such as this Labor Day sale
with “25%–75% off storewide”—
resulting in shuttered stores and
steadily declining sales and profits.
Retailing Trends and Developments (2 of
6)
New Retail Forms, Shortening Retail Life Cycles, and Retail
Convergence
Retail convergence involves the merging of consumers,
producers, prices, and retailers, creating greater competition for
retailers and greater difficulty differentiating offerings.
New retail forms: Amazon runs
flash sales—called Lightning
Deals— throughout the year and
especially during Amazon Prime
Day and the holiday season. The
Lightning Deals are offered in
limited quantities for a short
period of time, one per
customer, until available Richard Levine/Alamy Stock Photo
inventory runs out.
Retailing Trends and Developments (3 of
6)
The Rise of Megaretailers
The rise of megaretailers involves the rise of mass
merchandisers and specialty superstores, the formation of vertical
marketing systems, and a rash of retail mergers and acquisitions.
Superior information systems
Buying power
Large selection
Retail technology: Retailers are
now merging the physical and
digital worlds to create new-age
experiential retailing
environments. “If you want to
glimpse the future of retail,
check out an Amazon Go store.”
, Inc. or its
© 1996–2021, [Link]
affiliates
Retailing Trends and Developments (4 of
6)
Growing Importance of Retail Technology
Retail technology provides better
forecasts, inventory control,
electronic ordering, transfer of
information, scanning, online
transaction processing, improved
merchandise handling systems, and
the ability to connect with
customers.
Audi of America
AR and VR in retailing: Carmaker
Audi has installed virtual reality in
many of its showrooms, letting
customers put on a headset and
earphones to experience the sights
and sounds of their customized car
in realistic virtual environments.
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Retailing Trends and Developments (5 of
6)
Green Retailing
Environmentally Sustainable
Practices
Store design, construction,
operations
Product assortment
Recycling made easier
Package and distribution
Sustainable retailing: Under its
“People & Planet Positive”
sustainability strategy, home
furnishings retailer I K E A’s long-term
goal is to become 100 percent
sustainable, both in its operations
and in the products it sells.
Used with the permission of Inter I K E A Systems B.V.
Retailing Trends and Developments (6 of
6)
Global Expansion of Major Retailers
Retailers with unique formats and strong brands in other
countries
Challenges in meeting needs of local markets
Wholesaling (1 of 15)
Wholesaling includes all activities involved in selling goods and services
to those buying for resale or business use.
Selling and promoting
Buying and assortment building
Bulk breaking
Warehousing
Transportation
Wholesaling: Many of the nation’s
largest and most important
wholesalers—like Grainger—are Kristoffer Tripplaar/Alamy Stock Photo
largely unknown to final consumers.
But they are very well known and
much valued by the business
customers they serve.
Wholesaling (2 of 15)
Wholesaling includes all activities involved in selling goods
and services to those buying for resale or business use.
Wholesaling (3 of 15)
Selling and promoting involves the wholesaler’s sales force
helping the manufacturer reach many small customers at a
low cost.
Buying and assortment building involves the selection of
items and building of assortments needed by customers,
saving the customers work.
Wholesaling (4 of 15)
Bulk breaking involves the wholesaler buying in large
quantities and breaking into smaller lots for customers.
Warehousing involves the wholesaler holding inventory,
reducing its customers’ inventory cost and risk.
Wholesaling (5 of 15)
Transportation involves the wholesaler providing quick
delivery due to its proximity to the buyer.
Financing involves the wholesaler providing credit and
financing suppliers by ordering early and paying on time.
Wholesaling (6 of 15)
Risk bearing involves the wholesaler absorbing risk by
taking title and bearing the cost of theft, damage, spoilage,
and obsolescence.
Market information involves the wholesaler providing
information to suppliers and customers about competitors,
new products, and price developments.
Wholesaling (7 of 15)
Management services and advice involves wholesalers
helping retailers train their sales clerks, improve store
layouts, and set up accounting and inventory control
systems.
Wholesaling (8 of 15)
Types of Wholesalers
Merchant wholesalers
Brokers and agents
Manufacturers’ and retailers’ branches and offices
Wholesaling (9 of 15)
Types of Wholesalers
Merchant wholesalers are the largest group of wholesalers
and include:
Full-service wholesalers that provide a full set of services
Limited service wholesalers that provide few services and
specialized functions
Wholesaling (10 of 15)
Types of Wholesalers
Brokers and agents do not take title, perform a few
functions, and specialize by product line or customer type.
Brokers bring buyers and sellers together and assist in
negotiations.
Agents represent buyers or sellers.
Wholesaling (11 of 15)
Types of Wholesalers
Manufacturers’ and retailers’ branches and offices are a
form of wholesaling by sellers or buyers themselves, rather
than through independent wholesalers.
Wholesaling (12 of 15)
Figure 13.2 Wholesaler Marketing Strategies
Wholesaling (13 of 15)
Wholesaler Marketing Decisions
Segmentation, targeting, differentiation, and positioning
decisions:
Size of customer
Type of customer
Need for service
Wholesaling (14 of 15)
Wholesaler Marketing Decisions
Marketing mix decisions
Product
Price
Promotion
Place
Wholesaling (15 of 15)
Trends In Wholesaling
Need for greater efficiency
Value-adding customer
relationships
Increase in customer demand for
services
Increase in use of technology to
boost productivity
Giant food distribution wholesaler
Sysco lives up to its “Good things
come from Sysco” motto by
procuring and delivering food and Sysco Corporation
food service supplies more
dependably, efficiently, and cheaply
than customers could ever hope to
do on their own.
