Chapter 15: Retailing, Direct Marketing, and Wholesaling
Advantages of direct selling (3)
1. ability to personally demonstrate the product 2. customer attention 3. convenience
Service provided by wholesalers: TO RETAILERS (4)
1. assist with marketing strategy, especially distribution 2. help retailers select inventory 3. are often specialists on market conditions and experts at negotiating final purchases 4. can reduce a retailer's burden of looking for and coordinating supply sources
4 types of DM
1. catalog marketing 2. direct response marketing 3. telemarketing 4. online retailing
Types of locations (3)
1. free-standing structures 2. shopping malls and centers 3. business districts
Major types of retailers (2)
1. general-merchandise retailers 2. speciality retailers
Factors affecting retail store location (4)
1. location of intended target market 2. kinds of products sold 3. availability of transportation and ease of movement to/from site 4. competitors' locations
Strategic issues in retailing (4)
1. location of retail stores 2. positioning 3. store image 4. category management
Types of wholesalers (3)
1. merchant wholesalers 2. brokers and agents 3. manufacturers' sales branches and offices
Disadvantages of direct selling (2)
1. most expensive form of retailing 2. some customers view it negatively
Types and characteristics of shopping centers (5)
1. neighborhood shopping center 2. community shopping center 3. regional shopping center 4. lifestyle shopping center 5. power shopping center
Manufacturers' sales branches and offices (2)
1. sales branches 2. sales offices
Specialty retailers (3)
1. traditional specialty retailers 2. category killers 3. off-price retailers
Service provided by wholesalers: TO PRODUCERS (4)
1. wholesalers serve as an extension of the producer's sales force and act as conduit of information 2. provides financial assistance 3. reduce a producer's warehousing expenses and inventory investment by holding goods in inventory 4. can be a source of working capital
Category management
a retail strategy of managing groups of similar, often substitutable, products produced by different manufacturers
Category killers
a very large specialty store concentrating on a major product category and competing on the basis of low prices and product availability
Question 4: A(n) ______ is a self-service, general-merchandise store offering brand name and private brand products at low prices a. discount store b. convenience store c. superstore d. department store e. warehouse showroom
a. discount store
Question 3: _____ includes all transactions in which the buyer intends to consumer the product through personal, family, or household use a. retailing b. pricing c. advertising d. branding e. packaging
a. retailing
Wholesaling
all transactions in which products are bought for resale, for making other products, or for general business operations
Retailing
all transactions in which the buyer intends to consume the product through personal, family, or household use; can occur in stores, through direct selling, vending machines, and online
Franchising
an arrangment in which a supplier, or franchiser, grants a deal, or franchise, the right to sell products in exchange for some type of consideration
Wholesaler
an individual or organization that sells products which are bought for resale, for making other products, or for general business operations
Retailer
an organization that purchases products for the purpose of reselling them to ultimate consumers
Question 5: Which of the following retail organizations is said to combine the supermarket and discount store shopping in one location? a. warehouse showroom b. hypermarkets c. category killers d. warehouse clubs e. department stores
b. hypermarkets
Off-price retailers
buy manufacturers' seconds, overruns, returns and off-season production runs at below-wholesale prices for resale to consumers at deep discounts
Question 1: Any organization that purchases products for the purpose of reselling them to ultimate consumers is a(n) a. wholesaler b. shopping center c. retailer d. intermediary e. producer
c. retailer
Traditional specialty retailers
carry a narrow product mix with deep product lines; they are sometimes called "limited-line retailers"
General-merchandise wholesalers
carry a wide product mix but offer limited depth within product lines
Limited-line wholesalers
carry few product lines but offer an extensive assortment of products within those lines
Power shopping centers
combine off-price stores with category killers
Hypermarkets
combine supermarket and discount store shopping in one location
Community shopping center
contain one or two department stores, some specialty stores and convenience stores
Question 2: In contrast to industrial products, consumer products are often purchased because of a. economic planning b. necessity c. prior planning d. social influences e. rational needs
d. social influences
Regional shopping center
feature the largest department stores, widest product mixes and deepest product lines of all shopping centers
Rack jobbers
full service, specialty-line wholesalers that own and maintain display racks in supermarkets, drugstores and discount and variety stores
Superstores
giant retail outlets that carry products ordinarily found in supermarkets, but also routinely purchased consumer products
Retail positioning
identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment
Manufacturers' agents
independent intermediaries who represent sellers and usually offer customers complete product lines
Merchant wholesalers
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 a. full-service wholesalers b. limited-service wholesalers
Brokers
intermediaries temporarily employed by buyers or sellers in order to unite buyers and sellers
Cash-and-carry wholesalers
intermediaries whose customers pay cash and furnish transportation
Department store
large retail organizations with wide product mixes; employ at least 25 people
Supermarkets
large, self-service stores that carry a complete line of food products as well as some nonfood products
Warehouse clubs
large-scale, members-only selling operations combining cash-and-carry wholesaling and discount retailing
Interior atmospherics
lighting, wall and floor coverings, store fixtures
Online retailing
makes products available through computer connections
Sales branches
manufacturer-owned intermediaries that sell products and provide support to the manufacturer's sales force
Sales offices
manufacturer-owned operations that provide services normally associated with agents
Selling agents
market either all of a specified product line or a manufacturer's entire output; perform every wholesaling function except taking title to product
Direct Response marketing
occurs when a retailer advertises a product and makes it available through mail or telephone offers
Catalog marketing
occurs when an organization provides a catalog from which customers make selections and place orders via mail, telephone, or the internet
General-merchandise retailers
offer a variety of product lines, stocked in considerable depth; 8 retailers: 1. department stores 2. discount stores 3. convenience stores 4. supermarkets 5. superstores 6. hypermarkets 7. warehouse clubs 8. warehouse showrooms
Specialty-line wholesalers
offer the narrowest range of products
Full-service wholesalers
perform the widest possible range of wholesaling functions; handle either consumer or business products and provide various marketing services to their customers a. general-merchandise wholesalers b. limited-line wholesalers c. speciality-line wholesalers d. rack jobbers
Store image
projecting a functional and psychological picture that appeals to the target market
Limited-service wholesalers
provide fewer marketing services than full-service wholesalers and specialize in just a few functions, passing on the rest of the functions to customers or other intermediaries a. cash-and-carry wholesalers b. truck wholesalers c. drop shippers d. mail order
Commission merchants
receive goods on consignment from local sellers and negotiate sales in large, central markets
Agents
represent either buyers or sellers on a permanent basis a. manufacturers' agents b. selling agent c. commission merchants
Warehouse showrooms
retail facilities in large, low-cost buildings with warehouse materials-handling technology, vertical merchandise displays, large on-premises inventories, and minimal services
Discount stores
self-service, general merchandise outlets that regularly offer brand name and private brand products at low prices
Convenience stores
small self-service stores that are open long hours and carry a narrow assortment of products, usually convenience items, as well services such as ATMs
Exterior atmospherics
storefront, displays, entrances
Drop shippers
take title to goods and negotiate sales but never take actual possession of products
Location of retail stores
the least flexible, but very important
Direct selling
the marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace
Telemarketing
the performance of marketing-related activities by telephone; can help generate sales leads, improve customer service, accelerate payments on past due accounts
Atmospherics
the physical elements in a store's design that appeal to consumers' emotions and encourage buying; exterior and interior
Non-store retailing
the selling of products outside the confines of a retail facility
Automatic vending
the use of machines to dispense products selected by customers; one of the most impersonal forms of retailing
Direct Marketing
the use of telephone, internet, and non personal media to communicate product and organizational information to customers; a form of non-store retailing
Truck wholesalers
transport a limited line of products directly to customers for on-the-spot inspection and selection
Lifestyle shopping
typically open-air and feature upscale stores
Mail-order wholesalers
use catalogs instead of sales forces to sell products to retail and business customers
Neighborhood shopping center
usually consists of several small convenience and speciality stores