Chapter 16

How do retailers enhance value?

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What is retail positioning?

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What services do wholesalers provide to producers? To Retailers?

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Define brokers and agents.

Brokers • Intermediaries temporarily employed by buyers or sellers in order to unite buyers and sellers Agents • Represent either buyers or sellers on a permanent basis • Types of Agents ○ Manufacturers' Agents: Independent intermediaries who represent sellers and usually offer customers complete product lines ○ Selling Agents: Market either all of a specified product line or a manufacturer's entire output ○ Commission Merchants: Receive goods on consignment from local sellers and negotiate sales in large, central markets

What is category management?

Category Management • A retail strategy of managing groups of similar, often substitutable, products produced by different manufacturers ○ Represents a move towards a collaborative supply-chain initiative that enhances customer value

Define direct marketing. and catalog marketing.

Direct Marketing The use of telephone, Internet and nonpersonal media to communicate product and organizational information to customers • Nonstore Retailing: The selling of products outside the confines of a retail facility Catalog Marketing Occurs when an organization provides a catalog from which customers make selections and place orders via mail, telephone, or the Internet Direct Response Marketing Occurs when a retailer advertises a product and makes it available through mail or telephone orders

What is franchising? The advantages and disadvantages?

Franchising An arrangement in which a supplier, or franchiser, grants a dealer, or franchisee, the right to sell products in exchange for some type of consideration Franchising Advantages • Franchising enables a franchisee to start a business with limited capital and to benefit from the business experience of others • Are generally more successful than independently owned outlets • The franchiser gains fast product distribution through franchise arrangements • The franchiser can dictate many aspects of the business Franchising Disadvantages • The franchisee must pay to use the franchiser's name, products and assistance • The franchisee gives up control when entering into a franchise agreement Top U.S. Franchisers and Their Startup Costs Source: "2009 Franchise 500 Rankings," Entrepreneur (accessed April 8, 2010).

Define retailing and retailer.

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 Retailer • An organization that purchases products for the purpose of reselling them to ultimate consumers • Creates utility (time, place, possession and form) for consumers Importance of Retailing

What are atmospherics in reference to store image?

Store Image Projecting a functional and psychological picture that appeals to the target market • Atmospherics: The physical elements in a store's design that appeal to consumers' emotions and encourage buying ○ Exterior atmospherics (storefront, displays, entrances) ○ Interior atmospherics (lighting, wall and floor coverings, store fixtures)

What is telemarketing? On-line marketing?

Telemarketing The performance of marketing-related activities by telephone • The laws and regulations regarding telemarketing have become more restrictive Television Home Shopping Presents products to television viewers who can purchase products through toll-free numbers and paying with credit cards • Easy demonstration of products • Consumers have the convenience of shopping from home Online Retailing • Makes products available through computer connections ○ New retail opportunities ○ Easy comparison shopping and ordering • Easier than ever to find upscale and hard-to-find items • Online security remains a problem Automatic Vending The use of machines to dispense products selected by customers

What are types of full-service merchandisers? Limited-service merchandisers?

Types of Full-Service Wholesalers ○ 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 ○ Specialty-Line Wholesalers: Offer the narrowest range of products ○ Rack Jobbers: Full-service, specialty-line wholesalers that own and maintain display racks in supermarkets, drugstores and discount and variety stores 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 • Cash-and-Carry Wholesalers: Intermediaries whose customers pay cash and furnish transportation • Truck Wholesalers: Transport a limited line of products directly to customers for on-the-spot inspection and selection • Drop Shippers: Take title to goods and negotiate sales but never take actual possession of products • Mail-Order Wholesalers: Use catalogs instead of sales forces to sell products to retail and business customers Services That Limited-Service Wholesalers Provide

What is wholesaling? A wholesaler?

Wholesaling • All transactions in which products are bought for resale, for making other products, or for general business operations Wholesaler • An individual or organization that sells products which are bought for resale, for making other products, or for general business operations Major Wholesaling Functions

Know and differentiate between the different types of retailers.

• Department Stores: Large retail organizations with wide product mixes; employ at least 25 people • 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 as services such as automatic teller machines • Supermarkets: Large, self-service stores that carry a complete line of food products as well as some nonfood products • Superstores: Giant retail outlets that carry products ordinarily found in supermarkets, but also routinely purchased consumer products • Hypermarkets: Combine supermarket and discount store shopping in one location • Warehouse Clubs: Large-scale, members-only selling operations combining cash-and-carry wholesaling and discount retailing • Warehouse Showrooms: Retail facilities in large, low-cost buildings with warehouse materials-handling technology, vertical merchandise displays, large on-premises inventories, and minimal services

What is the importance of retailing in the US?

• Over 1 million retailers in the U.S. • 20% of all employees in the U.S. work in retail • The majority of personal income is spent in retail establishments • Retailers are the critical link between producers and ultimate consumers ○ Facilitate exchanges with ultimate consumers

Why is location important for retailers?

• The least flexible of the strategic retailing issues, but very important • Factors affecting retail store location: ○ Location of intended target market ○ Kinds of products sold ○ Availability of transportation and ease of movement to/from site ○ Competitors' locations • Types of locations: ○ Free-standing structures ○ Shopping malls and centers ○ Business districts