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Group Members:

1.Golam Sharwoar Shawon


2.Shamim Hasan Niloy
3.Mahadi Hasan Taheri
4.Md. Kamrul Islam
5.Md. Sohel Rana

Chapter: 18
MANAGING RETAILING,
WHOLESELING AND
LOGISTICS

RETAILING
Retailing is a distribution channel function
where one organization buys products from
supplying firms or manufactures the product
themselves and then sells these directly to
consumers. A retailer is a reseller who obtains
product from one party in order to sell to
another from which a consumer purchases
products. Retailing is a first moving challenging
industry. Example: Wal-Mart, AMAZON.COM,
McDonalds.


TYPES OF RETAIL

There are two types of retail. They are given belowStore Retail: Store retail is a place of business
usually owned and operated by a retailer but
sometimes owned and operated by a manufacturer
or by someone other than a retailer in which
merchandise is sold primarily to ultimate
consumers. Example: SEARS
Non-store retail: Non-store retailing is the selling
of a retail facility. It is a generic term describing
retailing taking place outside of shops and stores.
Example: Smart shop, yahoo shop, TV network.


SERVICE OF RETAILERS

Retailer meets widely different consumer preferences for service


levels and specific services. Specifically they position themselves
as offering one of levels of service.
Self-service: Self-service is the key stone of all discount
operations. Many customers are willing to carry out locate
compare select process to save money.
Self-selection: customers fine their own goods, though they
can ask for assistance.
Limited service: These retailers can carry more shopping
goods and services such as credit and merchandise return
privileges. Customers need more information and assistance.
Full-service: Firm with a large range of goods offered at retail
price and which provides advice and detailed information on
goods sold through its trained sales force.

CORPORATE RETAILING
Corporate retailing is corporately owned
retailing. Although many retail stores are
indecently owned, an increasing number are
part of a corporate retailing organization. These
organizations achieve economic of scale,
greater purchasing power, wider brand
recognition, and better- trained employees than
independent stores can usually gain alone.

MAJOR TYPES OF CORPORATE RETAIL


ORGANIZATIONS
There are five major types of corporate retail organization. They are
given belowCorporate chain store: Two or more outlets owned and controlled,
employing central buying and merchandising and selling sillier line of
merchandise.
Voluntary chain: A wholesaling-sponsored group of independent
retailers engaged in common merchandising.
Retailer cooperative: Independent using a central buying
organization and joint promotion efforts.
Consumer cooperative: A retail firm owned by customers. Member
contributes money to open their own store, vote on its policies, elect
a grouped to manage it and receive dividends.
Franchise organization: Contractual association between a
franchisor and franchisees popular in a number of product and
service areas.

Major Types of Store Retailer

Specialty store: Narrow product line. Ex: Atletes Foot, Tall

Men, The limited, The body Shop.


Department Store: Several product lines. Ex: Sears,
JCPenny, Northstorm.
Supermarket: Large, low cost,. Low-margin, high-volume,
self-service store designed to meet total needs for food and
household products. Kroger, Jewel , Food Emporium.
Convenience store: Small store in residential area, often
open for 24/7, limited line of high-turnover convenience
products plus takeout. EX: 7-Eleven, Circle K.
Discount store: Standard or specialty merchandise; lowprice, low-margin, high-volume stores. Wall-Mart, Kmart,
Circuit City, Crown Bookstores

Off-price retailer: Leftover goods, overruns, irregular

merchandise sold at less than retailer. Factory outlets,


independent off-price retailers. Ex: Filenes Basement, T.J. Maxx,
Price-Costco, BJs Wholesale.
Superstore: Huge selling space, routinely purchased food and
household items, plus services (laundry, shoe repair, dry cleaning,
check cashing). Category killer (deep assortment in one category)
such as Petsmart, Staples, Home Depot; combination store such
as Jewel, Osco; hypermarket (Huge stores that combine
supermarket, discount, and warehouse retailing ), such as
Carrefour in France, Pyrca in Spain, and Meijers in the
Netherlands.
Catalog showroom: Broad selection of high-markup, fast
moving, brand-name goods sold by catalog at discount.
Customers pick up to merchandise at the store. Ex: Edge Ski and
Bike.

Major Types of Non-store Retailing


Non-store retailing falls into four major categories: direct selling,
direct marketing (which includes telemarketing and Internet selling),
automatic vending, and buying services.
Direct selling (also called as multilevel selling, network
marketing) is a $9 billion industry, with over 600 companies
selling door-to-door or at home sales parties. Well-known one-toone selling are Avon, Electrolux, and Southwestern Company of
Nashville (Bibles). Tuppeware and Mary Kay Cosmetics are sold
one-to- many: A salesperson goes to the home of a host who
invited friends : the salesperson demonstrates the products and
takes orders.
Direct marketing has root in direct-mail and catalog marketing
(Lands End, L.L. Bean); it includes telemarketing, television directresponse marketing (Home shopping Network, QVC), and
electronic shopping.

Automatic vending is used for a variety of merchandise,

including impulse goods like cigarettes, soft drinks, coffee,


candy, newspapers, magazines, and other products like
hosiery, cosmetics, hot food, and paperbacks. Vending
machines are found in factories, offices, large retail stores,
gasoline stations, hostels, restaurants, and many other
places. They offer 24 hours selling, self-service, and
merchandise that is always fresh.
Buying service is a store less retailer serving a specific
clientele usually employees of large organizations who are
entitled to buy from a list of retailers that have agreed to
give discounts in return for membership.

WHOLESALING
Wholesaling includes all the activities in selling
goods or services directly to those who buy for
resale or business use.

DIFFERENCE BETWEEN WHOLESALERS AND


RETAILERS
Wholesalers differ from retailers in a number of ways,
Wholesalers pay less attention to promotion,
atmosphere, and location because they deal with
business customers rather than final customers.
Wholesale transaction is usually larger than retail
transactions.
Wholesalers cover a larger trade area than retailers.
The government deals with wholesalers and retailers
differently in-term of legal regulations and taxes.

TYPES OF WHOLESALING
There are six types of wholesaling. They are Merchant Wholesalers: Independently owned, take title to the
merchandise they handle. They can provide full service or limited
service.
Full-Service Wholesalers: Provide full service like maintain sales
force, offer credit, make deliveries etc.
Limited-Service Wholesalers: Provide limited service, like cash
and carry wholesalers sell FMCGs to small retailers for cash.
Brokers and Agents: Do not take title of goods. They facilitate
buying and selling on commission basis.
Manufacturers and Retailers Branches and Offices: Wholesaling
operations conducted by sellers or buyers themselves rather though
independent wholesalers.
Specialized Wholesalers: Auction companies, agricultural
assemblers they buy agricultural output of many farms.

Franchising
Contractual association between a franchisor
and franchises, popular in a number of product
and service areas. Ex: Pizza-Hut.

The Modern Retail Marketing Environment


The retail marketing environment is dramatically different from it was
just a decade or so ago.
1)Competitive Retail Market Structure:
The retail market is very dynamic, and a number of new types of
competitors and competition have emerged in recent years. Here are
five (5) important developmentsNew Retail Forms and combinations:
To better satisfy customers need for convenience, a variety of new
retail forms have emerged. Ex: Books stores feature coffee shops, Gas
stations include food stores.
Growth of Giant Retailer:
Through their superior information system, logistical system, and
buying power, giant retailers such as Wall-Mart are able to deliver
goods, services and immense volume of product to masses of
customers at appealing prices.


Growth of Intertype Competition:

One consequence of the growth of the supercenters is that department


stores cant worry just about other department store discount chains
such as Wall-Mart and Tesco are expanding into product areas such as
clothing, health, beauty and electrical appliance. Super-markets also
have to worry about these supercenters.
Emergence of Fast Retailing:
An important trend in fashion retailing in particular but with broader
implication is the emergence of fast retailing. Here retailers develop
completely different supply chain and distribution systems to allow them
to offer consumers constantly changing product choices.
Decline of Middle Market Retailers:
We can characterize the retail market today as hourglass or dog-bone
shaped. Growth seems to be centered at the top and the bottom.

2)Role of Technology: Technology is profoundly affecting the way


retailers conduct virtually every fact of their business. Almost all now
use technology to produce forecast, control inventory costs and order
from suppliers, reducing the need to discount and run sales to clear out
languishing product. Technology is also directly affecting the consumers
shopping experience inside the store. Electronic shelf labeling allows
retailer to change price levels instantaneously at need. In store
programming on plasma TV can run continual demonstrations or
promotional messages. Retailers are experimenting with virtual
shopping screens, audio/video presentation, and QR code integration.
Channels: Based on a target market analysis and other considerations
retailers must decide with channels to employ to reach their
customers.
Product Assortment: The retailers product assortment must match
the target markets shopping expectations in breadth and depth. A
restaurant can narrow assortment or a broad and deep assortment.

Procurement
After deciding on the product assortment strategy,
the retailer must establish merchandise sources,
policies and practices. In the corporate
headquarters of a supermarket chain, specialist
buyers are responsible for developing brand
assortment and listening the presentation from
their suppliers sales people. Retailers are rapidly
improving their skills in demand forecasting,
merchandise selection, stock control, space
allocation and display.

Market logistics
Market logistics involves planning the
infrastructure to meet demand, then
implementing and controlling the physical flows
of materials and final goods from point of origin
to point of use to meet customer requirements
at a profit.

Market logistics planning


Market logistics planning has four (4) steps:
Deciding on the companys value proposition to
its customer.
Deciding on the best channel design and network
strategy for searching the customer.
Developing operational excellence in sales
forecasting, warehouse management,
management and materials management.
Implementing the solution with the best
information system, equipment, policies, and
procedures.

Market-Logistics Decisions
Four major decisions must be made with regard to market logistics
ORDER PROCESSING: Most companies today are trying to shorten
the order-to-payment-cycle the t is the elapsed time between an
order receipt, delivery and payment. This cycle involves many
steps, including order transmission by the salesperson, order entry
and customer credit check, inventory and production scheduling,
order and invoice shipment and receipt of payment.
WAREHOUSING: Every company has to store finished goods until
they are sold, because production and consumption cycles rarely
match. The storage function helps to smooth discrepancies between
production and quantities desired by the market. The company
must decide on the number of inventory stocking limitations. To
reduce warehousing and inventory duplication costs, the company
might centralize its inventory in one place and use fast
transportation to fulfill orders.

INVENTORY: Salespeople would like their

companies to carry stock to fill all customers orders


immediately. However, this is not cost-effective.
Inventory cost increases at an accelerating rate as a
customer service level approaches 100 percent.
Management need to know how much sales and
profits would increases s result of carrying larger
inventories and promising faster order fulfillment
times, and then make a decision.
TRANSPORTATION: Marketers need to be
connected with transportation decisions.
Transportation choices will affect product pricing, on
time delivery performance, and the condition of
goods when they arrive, all of which affects
customer satisfaction.

END