Chapter 14, Retailing, direct marketing and wholesaling

General Merchandise Retailers

A retail establishment that offers a variety of product lines that are stocked in considerable depth. The primary types of general-merchandise retailers are department stores, discount stores, convenience stores, supermarkets, superstores, hypermarkets, warehouse clubs, and warehouse showrooms

drop shippers

also known as desk jobbers, take title to products and negotiate sales but never take actual possession of the products. They forward orders from retailers, business buyers, or other wholesalers to manufacturers and arrange for carload shipments of items to be delivered directly from producers to these customers.

catalog marketing

an organization provides a catalog from which customers make selections and place orders by mail, telephone, or the internet.

brokers

are intermediaries that buyers or sellers employ temporarily.

traditional specialty retailers

are stores that carry a narrow product mix with deep product lines. Sometimes called limited-line retailers, they may be referred to as single-line retailers if they carry unusual depth in one product category. Victoria's Secret, and Foot Locker

general merchandise wholesalers

carry a wide product mix, but offer limited depth within product lines.

limited line wholesalers

carry only a few product lines, such as groceries, lighting fixtures, or oil-well drilling equipment, but offer an extensive assortment of products within those lines.

hypermarkets

combine supermarket and discount store shopping in one location. Larger than superstores, they range from 225,000 to 325,000 square feet and offer 45,000 to 60,000 different types of low-priced products.

power shopping center

combining off-price stores and small stores with category killers. Gap, PetSmart, HomeDepot

superregional shopping centers

have the widest and deepest product mixes and attract customers from many miles away. Superregional centers often have special attractions beyond stores, such as skating rinks, amusement centers, or upscale restaurants. Mall of America

retailing

includes all transactions in which the buyer is the ultimate consumer and intends to consume the product for personal, family, or household use.

retail positioning

involves identifying an unserved or underserved market segment and reaching it through a strategy that distinguishes the retailer from others in the minds of customers in the market segment.

category management

is a retail strategy of managing groups of similar, often substitutable products produced by different manufacturers.

convenience stores

is a small, self-service store that is open long hours and carries a narrow assortment of products, usually items such as soft drinks and other beverages, snacks, newspapers, tobacco, and gasoline, as well as services such as ATMs.

wholesaler

is an individual or organization that sells products that are bought for resale, making other products, or general business operations.

telemarketing

is the performance of marketing-related activities by telephone.

selling agents

market either all of a specified product line or a manufacturer's entire output. They perform every wholesaling activity except taking title to products. Selling agents usually assume the sales function for several producers simultaneously, and some firms may use them in place of a marketing department.

direct response marketing

occurs when a retailer advertises a product and makes it available through mail, telephone, or online. Generally, customers use a credit card, but other forms of payment may be permitted.

specialty line wholesaler

offer the narrowest range of products, usually a single product line or a few items within a product line.

full-service wholesalers

perform the widest possible range of wholesaling functions. Customers rely on them for product availability, suitable product assortments, breaking large shipments into smaller ones, financial assistance, and technical advice and service.

television home shopping

presents products to television viewers, encouraging them to order through toll-free numbers and pay with credit cards.

limited service wholesalers

provide fewer marketing services than do full-service wholesalers and specialize in just a few functions. Producers perform the remaining functions or pass them on to customers or other intermediaries.

extreme value stores

re a fraction of the size of conventional discount stores and typically offer very low prices—generally $1 to $10—on smaller size name-brand nonperishable household items. Dollar General, Dollar Tree, and Five Below

commission merchants

receive goods on consignment from local sellers and negotiate sales in large, central markets. Sometimes called factor merchants, these agents have broad powers regarding prices and terms of sale. They specialize in obtaining the best price possible under market conditions.

Wholesaling

refers to all transactions in which products are bought for resale, for making other products, or for general business operations. It does not include exchanges with ultimate consumers

agents

represent either buyers or sellers on a permanent basis

truck wholesalers

sometimes called truck jobbers, transport a limited line of products directly to customers for on-the-spot inspection and selection.

atmospherics

the physical elements in a store's design that appeal to consumers' emotions and encourage buying, help to create an image and position a retailer.

mail order wholesalers

use catalogs instead of a sales force to sell products to retail and business buyers. Wholesale mail-order houses generally feature cosmetics, specialty foods, sporting goods, office supplies, and automotive parts.

regional shopping centers

usually have the largest department stores, widest product mixes, and deepest product lines of all shopping centers. Target markets may include consumers traveling from a distance to find products and prices not available in their hometowns.

category killers

which is a very large specialty store that concentrates on a major product category and competes on the basis of low prices and broad product availability. These stores are referred to as category killers because they expand rapidly and gain sizable market shares, taking business away from smaller, higher-cost retail outlets.

warehouse clubs

a growing form of mass merchandising, are large-scale, members-only operations that combine cash-and-carry wholesaling with discount retailing. Sometimes called buying clubs, warehouse clubs offer the same types of products as discount stores, but in a limited range of sizes and styles.

rack jobbers

are full-service, specialty-line wholesalers that own and maintain display racks in supermarkets, drugstores, and discount and variety stores. They set up displays, mark merchandise, stock shelves, and maintain billing and inventory records.

superstores

are giant retail outlets that carry not only the food and non-food products ordinarily found in supermarkets, but also routinely purchased consumer products such as housewares, hardware, small appliances, clothing, and personal-care products.

manufacturers agents

are independent intermediaries that represent two or more sellers and usually offer complete product lines to customers. They sell and take orders year-round, much as a manufacturer's sales force does. Restricted to a particular territory,

merchant wholesaler

are independently owned businesses that take title to goods, assume risks associated with ownership, and generally buy and resell products to other wholesalers, business customers, or retailers

cash and carry wholesalers

are intermediaries whose customers—usually small businesses—pay cash and furnish transportation. Cash-and-carry wholesalers usually handle a limited line of products with a high turnover rate, such as groceries, building materials, and electrical or office supplies.

department stores

are large retail organizations characterized by wide product mixes with at least 25 employees. organize related product lines into separate departments such as cosmetics, housewares, apparel, home furnishings, and appliances. service oriented

supermarkets

are large, self-service stores that carry a complete line of food products and some non-food products such as cosmetics and nonprescription drugs.

sales branches

are manufacturer-owned intermediaries that sell products and provide support services to the manufacturers' sales forces. Situated away from the manufacturing plant, they are usually located where large customers are concentrated and demand is high.

sales office

are manufacturer-owned operations that provide services normally associated with agents. Like sales branches, they are located away from manufacturing plants, but unlike sales branches, they carry no inventory.

warehouse showrooms

are retail facilities with five basic characteristics: large, low-cost buildings, warehouse materials-handling technology, vertical merchandise displays, large on-premises inventories, and minimal services. IKEA

discount stores

are self-service, general-merchandise outlets that regularly offer brand-name and private-brand products at low prices. Discounters accept lower profit margins than conventional retailers in exchange for high sales volume. walmart and target

off-price retailers

are stores that buy manufacturers' seconds, overruns, returns, and off-season production runs at below-wholesale prices for resale to consumers at deep discounts. Unlike true discount stores, which pay regular wholesale prices for goods and usually carry second-line brand names, off-price retailers offer limited lines of national-brand and designer merchandise, usually clothing, shoes, or housewares.

multichannel retailing

complement their brick-and-mortar stores with websites, apps, catalogs, television home shopping, and more where consumers can research products, read other buyers' reviews, and make actual purchases.

community shopping centers

include one or two department stores and some specialty stores, as well as convenience stores. They draw consumers looking for shopping and specialty products not available in neighborhood shopping centers.

retailer

is an organization that purchases products for the purpose of reselling them to ultimate consumers.

direct selling

is the marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace.

vending

is the use of machines to dispense products. Vending is one of the most impersonal forms of retailing, and it accounts for a very small part of total retail sales. Small, standardized, routinely purchased products, such as snacks and drinks, are best suited for sale in vending machines because consumers buy them out of convenience

direct marketing

is the use of the telephone, internet, and nonpersonal media to communicate product and organizational information to customers, who can then purchase products via mail, telephone, or the internet.

a lifestyle shopping center

is typically an open-air shopping center that features upscale specialty stores, dining, and entertainment, most usually owned by national chains. Like San Jose's Santana Row, they are typically located near affluent neighborhoods

online retailing

which makes products available to buyers through internet connections. Online retailing is a rapidly-growing segment that most retailers view as vital to business.