chapter 13

brokers and agents

--brokers: bring buyers and sellers together and assist in negotiation. They are paid by the party who hired the broker and do not carry inventory, get involved in financing, or assume risk --agents: represent either buyers or sellers on a more permanent basis than brokers do

types of merchant wholesalers

--full-service wholesalers: provide a full line of services, carrying stock, maintaining a sales force, offering credit, making deliveries, and providing management assistance. Includes wholesale merchants and industrial distributors --limited service wholesalers: offer fewer services than full-service wholesalers

*what is wholesaling

includes all activities involved in selling goods and services to those buying for resale or business use

*retail atmospherics

refers to how managers manipulate the design of the building, interior space, layout of aisles, texture of carpets and walls, scents, colors, shapes, and sounds experienced by customers to achieve a certain effect

*types of service retailers

-Self-service (customer performs own locate-compare-select process) Examples: Wal-Mart, Kohl's, Grocery stores -Limited service (more sales assistance) Examples: Sears, JCPenney -Full service (complete sales assistance at every phase of shopping process..includes specialty and department stores) Results in higher prices Examples: Neiman Marcus, Williams-Sonoma

*what is retailing and how are they classified

-activities involved in selling goodsand services directly to final consumer for personal, nonbusiness use -classified based on: amount of service, product line, relative prices

types of limited service wholesalers

-cash-and carry wholesalers: carry limited line of fast-moving goods and sell to small retailers for cash --truck wholesalers: perform primarily a selling and delivery function and carry a limited line of semiperishable merchandise such as milk, bread, which is sold for cash as deliveries are made to supermarkets --drop shippers: do not carry inventory or handle product. On receiving an order, drop shippers select a manufacturer, who then ships merchandise directly to the customer --rack jobbers: serve grocery and drug retailers, mostly in nonfood items. They send delivery trucks to stores. Rack jobbers price the goods and keep inventory records -- producers' cooperatives: farmer-owned members that assemble farm produce for sale in local markets -- mail-to-order Web wholesalers: send catalogs to or maintain web sites for retail, industrial, etc

*types of retailers as categorized by their relative prices

-discounts stores: sells standard merchandise by accepting lower margins and selling at higher volume (ie Walmart, Costco, Target) -Off-price retailers: buys at less-than-regular wholesale prices and sells at less than retail - independent off-price retailer: independently owned and operated or a division of a larger retail corporation (ie TJ Maxx and Marshals) -Factory outlets: owned and operated by manufacturer and normally carries the manufacturer's surplus, discontinues, or irregular goods (type of off price retailer) -Warehouse clubs: sells a limited selection of brand name grocery items, appliances, clothing, and other goods at deep discounts to members (type of off price retailer)

types of agents

-manufacturers agents: represent 2 or more manufacturers of complimentary lines -selling agents: have contractual authority to sell a manufacturers's entire output -purchasing agents: generally have a long-term relationship with buyers and purchases for them - commission merchants: take physical possession of products and negotiate sales

two main types of wholesalers

-merchant wholesalers: independently owned businesses that take titles to all merchandise handled. -brokers and agents: Do not take title of the goods. The main function is to facilitate buying and selling, for which they earn a commission on the selling price. Generally specialize by product line or customer type

*Segmenting, Targeting,, and positioning in retail setting

-retailers must segment and define target markets. Should they focus on upscale, midscale, or downscale shoppers? Do target shoppers want variety, depth of assortment, low prices? -retailers must create good value propositions to differentiate their stores...For example Trader Joe's "cheap gourmet"

*types of retailers classified by product line

-specialty stores: Narrow product line with deep assortment (e.g., Williams Sonoma) -department stores: Wide variety of product lines (e.g., Macys) -convenience stores: Limited line of high-turnover goods (e.g., Get N Go) -superstores: Non-food goods plus food goods (e.g., Wal-Mart Super Center) -category killers: Deep in category with sales staff (e.g., Best Buy, Home Depot, PetSmart, Bed, Bath, & Beyond). they are giant specialty stores and they feature stores the size of airplane hangars that carry a very deep assortment of a particular line.

functions of wholesalers

Selling and promoting (wholesalers' sales force help manufacturers reach many small customers at a low cost), buying and assortment building (wholesalers can select items and build assortments needed by their customers), bulk breaking (saving their customers money by buying in carload lots and bulk breaking large lots into small quantities), warehousing (holding inventory), transportation wholesalers provide quicker delivery to buyers because they are closer to buyers than are producers) , financing (wholesalers finance their customers by them credit, and they finacnce their suppliers by ordering early and paying bills on time) , risk bearing (taking title and bearing cost of theft or damage), market information (give info to suppliers about competitors, new products and price developments), management services and advice

*how retailers are classified by product line

by their length and breadth of product assortments