Chapter Thirteen
Retailing and Wholesaling
Copyright 2009 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 1
Retailing and Wholesaling
Topic Outline
Retailing
Retailer Marketing Decisions
The Future of Retailing
Wholesaling
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 2
Retailing
Retailing includes all the activities in selling
products or services directly to final
consumers for their personal, non-business
use
Retailers are businesses whose sales come
primarily from retailing
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 3
Retailing
Types of Retailers
Amount of service
Self-service
Limited service
Full service
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 4
Retailing
Product Line
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 5
Retailing
Types of Retailers
Relative Prices
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 6
Retailing
Types of Retailers
Organizational Approach
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 7
Retailing
Types of Retailers
Organizational Approach
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
Sears
CVS
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 8
Retailing
Types of Retailers
Organizational Approach
Voluntary chains are wholesale-sponsored
groups of independent retailers that engage
in group buying and common merchandising
IGA
Western Auto
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 9
Retailing
Types of Retailers
Organizational Approach
Retailer cooperatives is a group of
independent retailers that band together to
set up a joint-owned, central wholesale
operation and conduct joint merchandising
and promotion effort
Ace Hardware
Associated Grocers
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 10
Retailing
Types of Retailers
Organizational Approach
Franchise organizations are based on
some unique product or service; on a
method of doing business; or on the
trade name, good will, or patent that the
franchisor has developed
Holiday Inn
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 11
Retailing
Types of Retailers
Organizational Approach
Merchandising conglomerates are
corporations that combine several
retailing forms under central ownership
Limited Brands
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 12
Retailing
Retailer Marketing Decisions
Segmentation, targeting, differentiation, and
positioning involves the definition and
profile of the market so the other retail
marketing decisions can be made
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 13
Retailing
Retailer Marketing Decisions
Product Assortment and Service
Product assortment and service decisions
include:
Product assortment
Services mix
Store atmosphere
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 14
Retailing
Retailer Marketing Decisions
Price Decision
Price policy must fit the target market and
positioning, product and service assortment,
and competition
High markup on lower volume
Low markup on higher volume
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 15
Retailing
Retailer Marketing Decisions
Price Decision
High-low pricing involves charging higher
prices on an everyday basis, coupled with
frequent sales and other price promotions
Everyday low price (EDLP) involves charging
constant, everyday low prices with few sales
or discounts
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 16
Retailing
Retailer Marketing Decisions
Promotion Decision
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 17
Retailing
Retailer Marketing Decisions
Place Decision
Central business districts are located in cities and
include department and specialty stores, banks, and
movie theaters
Shopping center is a group of retail businesses
planned, developed, owned, and managed as a unit
Regional shopping centers
Community shopping centers
Neighborhood shopping centers
Power center
Lifestyle centers
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 18
Retailing
The Future of Retailing
Retailers have to choose target segments carefully,
position themselves strongly, and consider the
following developments as they plan and execute
their competitive strategies
Non-store retailing
Retail convergence
Megaretailers
Retail technology
Global expansion
Retail stores as communities
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 19
Retailing
The Future of Retailing
New Retail Forms and Shortening Retail Life Cycles
Wheel-of-retailing concept states that many
new types of retailing forms begin as lowmargin, low-price, low-status operations, and
challenge established retailers. As they
succeed they upgrade their facilities and offer
more services, increasing their costs and
forcing them to increase prices, eventually
becoming the retailers they replaced.
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 20
Retailing
The Future of Retailing
New Retail Forms and Shortening Retail Life Cycles
Growth of non-store retailing includes:
Mail order
Television
Phone
Online
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 21
Retailing
The Future of Retailing
New Retail Forms and Shortening Retail Life Cycles
Retail convergence involves the merging of
consumers, producers, prices, and retailers,
creating greater competition for retailers and
greater difficulty differentiating offerings
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 22
Retailing
The Future of Retailing
New Retail Forms and Shortening Retail Life Cycles
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
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 23
Retailing
The Future of Retailing
New Retail Forms and Shortening Retail Life Cycles
Growing importance of 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
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 24
Wholesaling
Wholesaling includes all activities involved in selling goods and services to those buying for resale or business use
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 25
Wholesaling
Wholesaling
Selling and promoting involves the
wholesalers sales force helping the
manufacturer reach many smaller
customers at lower cost
Buying assortment building involves the
selection of items and building of
assortments needed by their customers,
saving the customers work
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 26
Wholesaling
Wholesaling
Bulk breaking involves the wholesaler buying
in larger quantity and breaking into smaller
lots for its customers
Warehousing involves the wholesaler holding
inventory, reducing its customers inventory
cost and risk
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 27
Wholesaling
Wholesaling
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
earlier and paying on time
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 28
Wholesaling
Wholesaling
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
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 29
Wholesaling
Wholesaling
Management services and advice involves
wholesalers helping retailers train their sales
clerks, improve store layouts, and set up
accounting and inventory control systems
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 30
Wholesaling
Types of Wholesalers
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 31
Wholesaling
Types of Wholesalers
Merchant wholesalers is the largest
group of wholesalers and include:
Full-service wholesalers who provide a
full set of services
Limited service wholesalers who provide
few services and specialized functions
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 32
Wholesaling
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
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 33
Wholesaling
Types of Wholesalers
Manufacturers sales branches and offices is
a form of wholesaling by sellers or buyers
themselves rather than through independent
wholesalers
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 34
Wholesaling
Wholesaler Marketing Decisions
Target market and positioning decisions
Size of customer
Type of customer
Need for service
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 35
Wholesaling
Wholesaler Marketing Decisions
Marketing mix decisions
Product
Price
Promotion
Place
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 36
Wholesaling
Trends in Wholesaling
Challenges
Resistance to price increases
Lack of suppliers
Changing customer needs
Adding value by increasing efficiency and
effectiveness
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 13- slide 37
