Retailing

and
Wholesaling
Chapter 14
 Objectives

Understand the roles of retailers

and wholesalers in the marketing
channel.
Know the major types of retailers.
Know the major types of
wholesalers.
Understand the marketing decisions
facing retailers and wholesalers.

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 Home c Depot

Huge product Well-trained, highly

assortment motivated salespeople
Prices are 20%30% earn above average
below hardware salaries
stores Customer problem-
Obsessed with solving is encouraged
offering high quality Internet site offers many
customer service home improvement tips
Lifetime value of One of todays most
customers: $25,000 successful retailers

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Definitions
Retailing
All activities involved
in selling goods or
services directly to
final consumers
for their personal,
nonbusiness use.

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Definitions
Retailer
Business whose
sales come
primarily from
retailing.
Can be brick and
mortar, 100%
virtual, or click
and mortar
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 BusinessNow
ZanyBrainy.com Video
Clip
ZanyBrainy.com
is a click and
mortar toy
retailer.

Click the picture above to play video

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 Discussion Question

How is web
retailing
different? In
your opinion,
what works
on the web
that wont work
in a typical
store?
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 Retailers
Types of Retailers

Specialty Stores Discount Stores

Department Convenience
Stores Stores
Supermarkets Off-Price Retailers
Superstores
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 Retailing
Retailers are Self-service retailers
Classified by: Customers are willing to
self-serve to save money
Discount stores
Amount of
Limited-service retailers
service Most department stores
Product lines Full-service retailers
Relative prices Salespeople assist
customers in every way
Organizational High-end department
approach stores
Specialty stores
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 Retailing
Specialty stores
Retailers are Narrow product lines with
Classified by: deep assortments
Department stores
Wide variety of product
Amount of lines
service Supermarkets
Convenience stores
Product lines Limited line

Relative prices Superstores

Sell food, nonfood, and
Organizational services
Category killers
approach Giant specialty stores

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Outlet malls
and category
complete are
popular with
consumers

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 Retailing
Retailers are Discount stores
Low margins are offset
Classified by: by high volume
Off-price retailers
Amount of Independent off-price
service retailers
Product lines TJ Maxx, Marshalls

Factory outlets
Relative prices Levi Strauss, Reebok

Organizational Warehouse clubs

Sams Club, Costco
approach
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 Retailing
Corporate chain stores
Retailers are Commonly owned/controlled
Classified by: Voluntary chains
Wholesaler-sponsored groups
of independent retailers
Amount of Retailer cooperatives
service Groups of independent
retailers who buy in bulk
Product lines Franchise organizations
Based on uniqueness
Relative prices Merchandising conglomerates
Organizational Diversified retailing lines
under central ownership
approach
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 Figure 14-1:
Retailer Marketing Mix
Decisions

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 Discussion Question

The product assortment, the services

mix, and the store atmosphere are
used by retailers to differentiate their
business from the competition.

Select two retailers from your local area

and discuss how each store differs with
respect to the three variables above.

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 Retailing
Retailer Marketing Mix
Price
High markup or high volume?
Promotion
Public relations, sales promotions,
advertising, direct marketing
Place
Location, location, location!
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 Retailing
The Future of Retailing
New retail forms and
shortening retail life cycles
Wheel-of-retailing concept
Growth of nonstore retailing
Mail-order, television, phone,
online shopping
Retail convergence

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 Retailing

The Future of Retailing Continued

Rise of megaretailers
Growing importance
of retail technology
Global expansion of
major retailers
Retail stores as
Communities or
Hangouts
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Mall of America hosts over 520 specialty
stores, 49 restaurants, and a theme park

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 Retailing
Retailer Communities: Check out Playstation.com

Playstation.com

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 Definitions
Wholesaling
All activities involved in selling goods
and services to those
buying for resale
or business use.
Wholesaling
A firm engaged
primarily in
wholesaling activity.
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Wholesaling
Wholesalers add value
by performing the
following functions:
Selling and promoting
Buying and assortment
building
Bulk-breaking
Warehousing
Transportation

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 Wholesaling
Wholesalers add
value by performing
the following
functions:
Financing
Risk bearing
Marketing information
Management services
and advice

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 Wholesaling
Types of Full-service wholesalers
Wholesalers Wholesale merchants
Industrial distributors

Merchant Limited service

wholesalers
Wholesalers Cash-and-carry
Brokers and wholesalers
Agents Truck wholesalers
(jobbers)
Manufacturers Drop shippers
and retailers Rack jobbers
branches and Producers cooperatives
offices Mail-order wholesalers
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 Wholesaling
Types of Brokers
Wholesalers Bring buyers and
sellers together and
Merchant assist in negotiation
Wholesalers Agents
Brokers and Manufacturers agents
Agents
Selling agents
Manufacturers Purchasing agents
and retailers
branches and Commission
merchants
offices
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 Wholesaling
Types of Sales branches and
Wholesalers offices
Branches carry inventory:
lumber, auto equipment,
Merchant parts
Wholesalers Offices do not carry
Brokers and inventory: dry goods
Agents Purchasing officers
Manufacturers Perform roles similar to
brokers and agents,
and retailers however these individuals
branches and are employees of the
offices organization
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 Figure 14-2:
Wholesaler Marketing Mix
Decisions

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 Wholesaling

Wholesaler Marketing Decisions

Targeting may be made on the
basis of:
Size of customer
Type of retailer
Need for service

Positioning

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 Wholesaling
Wholesaler Marketing Decisions
Marketing mix decisions
Product and service assortment:
inventory, line
Pricing: usual markup on COG is 20%
Promotion: largely disorganized and
unplanned
Place: location, facilities

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 Wholesaling

Trends in Wholesaling
Price competition is still intense
Successful wholesalers must
add value by increasing
efficiency and effectiveness
The distinction between large
retailers and wholesalers
continues to blur
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 Wholesaling
More Trends in
Wholesaling
More services will
be provided to
retailers
Many wholesalers
are going global
Wholesaler McKesson offers pharmacists a
wide range of online resources

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