Poma PPT Slides-Chapter 13-180882

Principles of Marketing: An Asian
Perspective
Instructor Supplements
Created by Geoffrey da Silva
Retailing and Wholesaling
2012 Principles of Marketing: An Asian Perspective
13
Chapter 13 Outline
13.1
13.2
Retailing
Wholesaling
Opening Case
Carrefour in China:
Competing with the Worlds Largest Retailer
Carrefour customers
therefore like the
fact that the stores
commitment to
quality reaches far
beyond whats on its
shelves.
5
13.1
Retailing
13.1
13.1 Retailing
Retailing
Retailing includes all the

activities involved in selling
products or services directly
to final consumers for their
personal, non-business use.
Retailers are businesses
whose sales come primarily
from retailing.
Many marketers are now
embracing the concept of
shopper marketing, the
idea that the retail store itself
is an important marketing
medium
13.1 Retailing
Non-Store Retailing
In recent years non-store retailing has been growing much faster than
has store retailing.
The growth of non-store retailing in recent years

is especially evident in Japan, where vending
machines are used to sell almost anything from
drinks to cigarettes and instant noodles.
8
13.1 Retailing
Types of retailers
Retailers can be classified in terms

of several characteristics, including
the amount of service they offer,
the breadth and depth of their
product lines, the relative prices
they charge, and how they are
organized.
9
13.1 Retailing
Classify Retailers by Service Level
Limited-Service
Self-Service
Full-Service
10 2012 Principles of Marketing: An Asian Perspective
13.1 Retailing
Amount of service
Selfservice
retailers serve customers who are willing to perform

their own locate-compare-select process to save time or money.
Limitedservice
retailers provide more sales assistance because

they carry more shopping goods about which customers need
information.
Fullservice
retailers include high-end specialty stores and

firstclass department stores. Salespeople assist customers in every
phase of the shopping process.
13.1 Retailing
Classify Retailers by Merchandise selection
13.1 Retailing
Retailer types
Specialty
stores
Department
stores
Supermarkets
Convenience
stores
Superstores
Hypermarkets
Category
Service
killers
retailers
13.1 Retailing
SHALLOW
Assortment Depth
Classify
Retailers
by
Merchandise
selection
Product LIne Breadth
NARROW
DEEP
WIDE
13.1 Retailing
Product lines
Specialty
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 are the most frequently shopped type of retail store.
Supermarkets have also been hit hard by the rapid growth of out-ofhome eating.
13.1 Retailing
Specialty stores
Some retailers carry narrow product lines with deep assortments within those lines. Niche
stores such as these selling ceramic wares and plastic foods in Kappabashi, Tokyo are
flourishing.
13.1 Retailing
Product lines
Convenience
stores are small stores that carry a limited line of

highturnover convenience goods.
Superstores
are much larger than regular supermarkets and offer a

large assortment of routinely purchased food products, nonfood items,
and services.
Supercenters
(called hypermarkets in some countries) are very large

combination food and discount stores.
13.1 Retailing
Product lines
Category
killers are superstores that are actually giant specialty

stores like Best Buy and Home Depot.
Service
retailers include hotels and motels, banks, airlines, colleges,

hospitals, movie theaters, tennis clubs, bowling alleys, restaurants,
repair services, hair salons, and dry cleaners.
13.1 Retailing
Convenience stores
7-eleven is shedding its truck stop image and

transforming its stores to offer more upscale
assortments and environments.
13.1 Retailing
Major Store
Retailer Types
13.1 Retailing
Classify Retailers by Relative Price

Discount
Off-price
Warehouse
Factory
clubs
outlets
13.1 Retailing
Relative prices
Discount
stores sell standard merchandise at lower prices by

accepting lower margins and selling higher volume.
Off-price
retailers offer products to fill the ultra lowprice,

highvolume gap by pricing lower than discount stores.
13.1 Retailing
Relative prices
The
three main types of off-price retailers are:

Independent off-price retailers either are independently
owned and run or are divisions of larger retail corporations.
Factory outlets are manufacturer-owned and operated stores
sometimes group together in factory outlet malls and value-retail
centers.
Warehouse clubs (or wholesale clubs or membership
warehouses), operate in huge, warehouse-like facilities and offer
few frills. Example would be Makro Asia in Thailand, Indonesia,
and China,
13.1 Retailing
Classify Retailers by Organizational approach

Corporate
Voluntary
chains
chains
Franchises
13.1 Retailing
Major Types of Retail Organizations
13.1 Retailing
Organizational approach- chain stores

Chain
stores are two or more outlets that are commonly owned and
controlled.
They
have many advantages over independents.

Their size allows them to buy in large quantities at lower prices
and gain promotional economies.
They can hire specialists to deal with areas such as pricing,
promotion, merchandising, inventory control, and sales
forecasting.
13.1 Retailing
Organizational approach- contractual associations
There are three forms of contractual associations:

Voluntary
chaina wholesalersponsored group of independent

retailers that engages in group buying and common merchandising.
Retailer
cooperativea group of independent retailers that bands

together to set up a jointly owned, central wholesale operation and
conducts joint merchandising and promotion efforts.
13.1 Retailing
Organizational approach- contractual associations
Franchisethe
main difference between franchise organizations and

other contractual systems is that franchise systems are normally
based on some unique product or service; on a method of doing
business.
13.1 Retailing
13.1 Retailing
Factory outlets
These value-retail centers combine manufacturers outlets with off-price retail stores and
department store clearance outlets, and are popular with shoppers and tourists.
13.1 Retailing
Franchising
These days, its nearly impossible to stroll down a city block or drive on a suburban
street without seeing a McDonalds or a Subway.
13.1 Retailing
Reviewing the Key Concepts

Explain the role of retailers in the distribution channel and describe
the major types of retailers.
13.1 Retailing
Retailer marketing decisions
RETAIL STRATEGY
RETAIL
MARKETING MIX
Segmentation and
targeting
Product assortment
and atmospherics
Store positioning
Prices
Promotion
Location
Create Value for targeted retail customers

13.1 Retailing
Segmentation
Targeting, differentiation
and positioning decisions
13.1 Retailing
Segmentation, Targeting, Differentiation, and Positioning

Decisions
Too
many retailers fail to define their target markets and positions

clearly. They try to have something for everyone and end up
satisfying no market well.
In
contrast, successful retailers define their target markets well and

position themselves strongly.
13.1 Retailing
Retail Product
13.1 Retailing
Product Assortment and Services Decision

Retailers
must decide on three major product variables:
Product assortment should differentiate the retailer while

matching target shoppers expectations.
Services mix can help set one retailer apart from another.
Store atmosphere is another important element in the resellers

product arsenal.
13.1 Retailing
Store atmosphere
Apple stores are known for their shopper-friendly experiences, as customers can try out products or
seek assistance from the Genius bar.
13.1 Retailing
Retail Pricing
13.1 Retailing
Price Decision
Most
retailers seek either:

High markups on lower volume (most specialty stores).
Low markups on higher volume (mass merchandisers and
discount stores
13.1 Retailing
Other pricing decisions:

Everyday
low pricing (EDLP), charging constant, everyday low prices

with few sales or discounts.
High-low
pricingcharging higher prices on an everyday basis,

coupled with frequent sales and other price promotions to increase
store traffic, clear out unsold merchandise, create a low-price image,
or attract customers who will buy other goods at full prices.
13.1 Retailing
Retail Promotion
13.1 Retailing
Promotion decision
Retailers
use any or all of the promotion toolsadvertising, personal

selling, sales promotion, public relations, and direct marketingto
reach consumers
13.1 Retailing
Promotion decision
Retailers may use

any or all of the
promotion tools
to reach
consumers, such
as this eyecatching display
to promote a
Chinese computer
game.
13.1 Retailing
Place decision
Retailers
often point to three critical factors in retailing success:

location, location, and location!
Its
very important that retailers select locations that are accessible to

the target market in areas that are consistent with the retailers
positioning.
13.1 Retailing
MoMo, Watsons, and Cosmed in Taiwan
13.1 Retailing
Location options
Central
business district
Shopping
Regional
centers
malls
Community
centers
Neighborhood
Power
centers
centers
Lifestyle
centers
13.1 Retailing
Location options
Central
business districts were the main form of retail cluster until the
1950s.
A
shopping center is a group of retail businesses planned,

developed, owned, and managed as a unit.
Regional
shopping centers, or regional shopping malls, are the largest

and most dramatic shopping center, contains from 50 to over 100
stores, including 2 or more full-line department stores.
13.1 Retailing
Location options
Community
shopping centers contain between
15
and 50 retail stores. It normally contains a branch of a department

store or variety store, a supermarket, specialty stores, professional
offices, and sometimes a bank.
Neighborhood
shopping centers or strip malls that generally contain

between 5 and 15 stores. They are close and convenient for
consumers.
13.1 Retailing
Place decision
Its very important that retailers select locations that are accessible to the target market in
areas that are consistent with the retailers positioning, such as these Cosmed and Watsons
outlets in the trendy and popular Ximending area in Taipei.
13.1 Retailing
Locations options:
Power
centers are huge unenclosed shopping centers consisting of a

long strip of retail stores, including large, freestanding anchors, which
is the current trend.
Despite
the recent development of many new megamalls, such as

thePacific Place in Hong Kong, Taipei 101 in Taiwan, Pavilion in Kuala
Lumpur, and Siam Paragon Shopping Centre in Bangkok, in some
countries, there is an emerging trend toward smaller lifestyle centres.
13.1 Retailing
Locations options:
These
lifestyle centressmaller malls with upscale stores, convenient

locations, and expensive atmospheresare usually located near
affluent residential neighbourhoods and cater to the retail needs of
consumers in their areas.
13.1 Retailing
Place decisions: megamalls and lifestyle centers
Despite the recent development of many new megamalls such as the Pavilion in Kuala Lumpur, there
is an emerging trend in some countries towards smaller lifestyle centers such as the Dempsey Hill
area in Singapore where smaller, upscale stores like Jones the Grocer are located.
13.1 Retailing

Describe the major retailer marketing decisions.
13.1 Retailing
The future of retailing
13.1 Retailing
Future of retailing
13.1 Retailing
Retailing Cycles
13.1 Retailing
New Retail Forms and Shortening Retail Life Cycles

New
retail forms continue to emerge to meet new situations and

consumer needs, but the life cycle of new retail forms is getting
shorter.
The wheel-of-retailing concept states that many new types of
retailing forms begin as lowmargin, lowprice, and lowstatus
operations.
The new retailers success leads them to upgrade their facilities and
offer more services, forcing them to increase their prices.
Eventually, the new retailers become like the conventional retailers
they replaced. The cycle begins again
13.1 Retailing
Non-Store Retailing
13.1 Retailing
Growth of Non-store Retailing

Consumers
are increasingly avoiding the hassles and crowds at malls

by doing more of their shopping by phone or computer.
Much
of the anticipated growth in online sales will go to multichannel

retailersthe click-and-brick marketers who can successfully merge
the virtual and physical worlds
13.1 Retailing
Online Retailing
Todays online retailing is alive, well,

and growing, especially for click-andbrick retailers like Staples. Its Web site
(www.staples.com) now accounts for
almost one-quarter of sales.
13.1 Retailing
Retail Convergence
13.1 Retailing
Retail Convergence
Todays
retailers are increasingly selling the same products at the

same prices to the same consumers in competition with a wider
variety of other retailers.
When
it comes to brand-name appliances, department stores,

discount stores, home improvement stores, off-price retailers,
electronics superstores, and a slew of Web sites all compete for the
same customers.
13.1 Retailing
Mega-retailing
13.1 Retailing
Rise of Mega-Retailers
The
mega-retailers are shifting the balance of power between retailers

and producers.
A
relative handful of retailers now control access to enormous

numbers of consumers, giving them the upper hand in their dealings
with manufacturers.
13.1 Retailing
Technology
13.1 Retailing
Growing Importance of Retail Technology

Many
retailers now routinely use technologies such as touch-screen

kiosks, customer-loyalty cards, electronic shelf labels and signs,
handheld shopping assistants, smart cards, and self-scanning
checkout systems.
13.1 Retailing
Retail Technology
Stop & Shop uses technology to make shopping

faster and more convenient for its customers.
13.1 Retailing
Global Expansion in Retailing
13.1 Retailing
Global Expansion of Major Retailers

Retailers
with unique formats and strong brand positioning are

increasingly moving into other countries.
Many
are expanding internationally to escape mature and saturated

home markets.
13.1 Retailing
Global Retailing
Most
U.S retailers are still significantly behind Europe and Asia when
it comes to global expansion.
Ten of the worlds top 20 retailers are U.S. companies; only two of
these retailers (Wal-Mart and Costco) have set up stores outside of
North America.
Of the 10 non-U.S. retailers in the worlds top 20, nine have stores in
at least 10 countries.
Among foreign retailers that have gone global are Frances Carrefour,
Britains Marks & Spencer, Italys Benetton, Japans Yaohan
supermarkets, and Swedens IKEA home furnishings stores
13.1 Retailing
Global Retailing
French discount retailer Carrefour, the worlds second-largest retailer
after Wal-Mart, has embarked on an aggressive mission to extend its
role as a leading international retailer.
Wal-Mart
Carrefour
Low-cost
Specialist in bulk selling
Creating a shopping environment
Experiential shopping
Satisfying services
Happy shopping
Low prices everyday
It is nice to have low prices
Zero-cost promotion
Entertaining promotion
The best location strategy
Located-at-a-junction strategy
Employees as Partners
Good Employees = Good Business
13.1 Retailing
Green Retailing
13.1 Retailing
Green Retailing
Todays
retailers are increasingly adopting environmentally

sustainable practices.
They
are greening up their stores and operations, promoting more

environmentally responsible products, launching programs to help
customers be more responsible, and working with channel partners to
reduce their environmental impact.
13.1 Retailing
Green Retailing
McDonalds Golden Arches are now going green.

Its new eco-friendly restaurants are designed
from the bottom up with a whole new ecoattitude.
13.1 Retailing

Discuss the major trends and developments in retailing.
13.2
Wholesaling
13.2
13.2 Wholesaling
13.2 Wholesaling
Wholesaling includes all activities involved in selling goods and

services to those buying for resale or business use.
Wholesalers are those firms engaged primarily in wholesaling

activities.
Wholesalers buy mostly from producers and sell mostly to retailers,

industrial consumers, and other wholesalers.
13.2 Wholesaling
Wholesaler functions
Selling and promoting

Assortment building
Bulk breaking
Warehousing
Transportation
Financing
Risk bearing
Market information
Management services and advice
13.2 Wholesaling
Wholesaler functions
Wholesalers hold inventories, therefore reducing the

inventory costs and risks of suppliers and customers.
13.2 Wholesaling
Wholesalers add value by performing:

1. Selling
and promoting: Wholesalers sales forces help manufacturers

reach many small customers at a low cost.
2. Buying and assortment building: Wholesalers can select items and
build assortments needed by their customers, thereby saving the
consumers much work.
3. Bulkbreaking: Wholesalers save their customers money by buying
in carload lots and breaking bulk (breaking large lots into small
quantities).
4. Warehousing: Wholesalers hold inventories, thereby reducing the
inventory costs and risks of suppliers and customers.
13.2 Wholesaling

5. Transportation:
Wholesalers can provide quicker delivery to buyers

because they are closer than the producers.
6. Financing:
Wholesalers finance their customers by giving credit, and

they finance their suppliers by ordering early and paying bills on
time.
7. Risk
bearing: Wholesalers absorb risk by taking title and bearing

the cost of theft, damage, spoilage, and obsolescence.
13.2 Wholesaling

8. Market
information: Wholesalers give information to suppliers and

customers about competitors, new products, and price
developments.
9. Management
services and advice: Wholesalers often help retailers

train their salesclerks, improve store layouts and displays, and set
up accounting and inventory control systems.
13.2 Wholesaling
Types of Wholesalers
Merchant
Wholesalers
Brokers
Manufacturers
Sales
Branches and Offices
13.2 Wholesaling
Merchant Wholesalers
Merchant
wholesalers are the largest single group of wholesalers,

accounting for roughly 50 percent of all wholesaling. Merchant
wholesalers include two broad types:
Fullservice wholesalers provide a full set of services.
Limitedservice wholesalers offer fewer services to their suppliers
and customers.
The
different types of limited-service wholesalers perform

varied specialized functions.
13.2 Wholesaling
Major types of Wholesalers
13.2 Wholesaling
Brokers and agents
13.2 Wholesaling
Brokers
Brokers
and agents differ from merchant wholesalers in two ways:

They do not take title to goods.
They perform only a few functions.
broker brings buyers and sellers together and assists in

negotiation.
Agents
represent buyers or sellers on a more permanent basis.

Manufacturers agents (also called manufacturers representatives)
are the most common type of agent wholesaler.
13.2 Wholesaling
13.2 Wholesaling
Manufacturers Branches
Manufacturers Sales
Branches and Offices
are wholesaling by
sellers or buyers
themselves rather than
through independent
wholesalers.
13.2 Wholesaling
13.2 Wholesaling
Wholesaling marketing decisions

WHOLESALE STRATEGY
Segmentation and
targeting
WHOLESALE
MARKETING MIX
Product and service
assortment
Wholesale prices
Service positioning
Promotion
Location
Create Value for targeted wholesale customers

13.2 Wholesaling
Marketing Mix Decisions for Wholesalers

Wholesalers
add customer value though the products and services they
offer.
They are often under great pressure to carry a full line and to stock
enough for immediate delivery. But this practice can damage profits.
Price is also an important wholesaler decision.
Most wholesalers are not promotion minded.
Their use of trade advertising, sales promotion, personal selling, and
public relations is largely scattered and unplanned.
Distribution (location) is importantwholesalers must choose their
locations, facilities, and Web locations carefully.
13.2 Wholesaling
Trends in wholesaling
The
industry remains vulnerable to one of the most enduring trends

of the last decadethe need for ever-greater efficiency. Recent
economic conditions have led to demands for even lower prices and
the winnowing out of suppliers who are not adding value based on
cost and quality.
The
distinction between large retailers and large wholesalers

continues to blur.
13.2 Wholesaling
Wholesalers
will continue to increase the services they provide to

retailersretail pricing, cooperative advertising, marketing and
management information reports, accounting services, online
transactions, and others.
Finally,
many large wholesalers are now going global.
13.2 Wholesaling
In recent years, wholesalers are

reacting to rising costs by investing in
automated warehouses and online
ordering systems. The items are picked
up by mechanical devices and
automatically taken to a shipping
platform where they are assembled.
13.2 Wholesaling
13.2 Wholesaling
Wholesaling trends
Wholesalers who do not find efficient ways

to deliver value to their customers will
soon drop by the wayside.
13.2 Wholesaling
Company Case
Haidilao Hotpot: Retailing with Hospitality
A waiter at the Haidilao hotpot

restaurant makes hand-pulled lao
mian.
13.2 Wholesaling

Explain the major types of wholesalers and their marketing decisions.
Thank
you

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Principles of Marketing: An Asian

Retailing and Wholesaling

2012 Principles of Marketing: An Asian Perspective

2012 Principles of Marketing: An Asian Perspective

2012 Principles of Marketing: An Asian Perspective

2012 Principles of Marketing: An Asian Perspective

Retailing includes all the

2012 Principles of Marketing: An Asian Perspective

The growth of non-store retailing in recent years

2012 Principles of Marketing: An Asian Perspective

Retailers can be classified in terms

2012 Principles of Marketing: An Asian Perspective

Classify Retailers by Service Level

retailers serve customers who are willing to perform

retailers provide more sales assistance because

retailers include high-end specialty stores and

11 2012 Principles of Marketing: An Asian Perspective

Classify Retailers by Merchandise selection

12 2012 Principles of Marketing: An Asian Perspective

13 2012 Principles of Marketing: An Asian Perspective

Product LIne Breadth

stores carry narrow product lines with deep assortments

15 2012 Principles of Marketing: An Asian Perspective

stores are small stores that carry a limited line of

are much larger than regular supermarkets and offer a

(called hypermarkets in some countries) are very large

17 2012 Principles of Marketing: An Asian Perspective

killers are superstores that are actually giant specialty

retailers include hotels and motels, banks, airlines, colleges,

18 2012 Principles of Marketing: An Asian Perspective

7-eleven is shedding its truck stop image and

19 2012 Principles of Marketing: An Asian Perspective

20 2012 Principles of Marketing: An Asian Perspective

Classify Retailers by Relative Price

21 2012 Principles of Marketing: An Asian Perspective

stores sell standard merchandise at lower prices by

retailers offer products to fill the ultra lowprice,

22 2012 Principles of Marketing: An Asian Perspective

three main types of off-price retailers are:

23 2012 Principles of Marketing: An Asian Perspective

Classify Retailers by Organizational approach

24 2012 Principles of Marketing: An Asian Perspective

Major Types of Retail Organizations

25 2012 Principles of Marketing: An Asian Perspective

Organizational approach- chain stores

have many advantages over independents.

26 2012 Principles of Marketing: An Asian Perspective

Organizational approach- contractual associations

There are three forms of contractual associations:

chaina wholesalersponsored group of independent

cooperativea group of independent retailers that bands

27 2012 Principles of Marketing: An Asian Perspective

Organizational approach- contractual associations

main difference between franchise organizations and

28 2012 Principles of Marketing: An Asian Perspective

29 2012 Principles of Marketing: An Asian Perspective

Reviewing the Key Concepts

32 2012 Principles of Marketing: An Asian Perspective

Create Value for targeted retail customers

34 2012 Principles of Marketing: An Asian Perspective

Segmentation, Targeting, Differentiation, and Positioning

many retailers fail to define their target markets and positions

contrast, successful retailers define their target markets well and