Chapter 15 Retailing, Direct Marketing, and Wholesaling

neighborhood shopping center

"strip mall" usually consists of several small convenience and specialty stores, such as small grocery stores, gas stations, and fast food restaurants. target markets are consumers within 2-3 miles.

truck wholesalers

"truck jobber" transport limited line of products directly to customers for on-the-spot inspection and selection. often small operators who own and drive their own truck.

limited-service wholesalers includes

-cash and carry -truck -drop shipper -mail order

major types of retail stores

General Merchandise Retailers Specialty Retailers

Interior Atmospherics

aesthetic considerations: lighting, wall and floor coverings, dressing facilities, and store fixtures. color can attract buyers to a retail display.

catalog marketing

an organization provides a catalog from which customers make selections and place orders by mail, telephone, or the internet. began in 1972 by Montgomery Ward. ex: pottery barn, employs multi-channel strategy via catalogs, online, and retail stores.

brokers

are intermediaries that bring buyers and sellers together temporarily

franchising

arrangement in which a supplier, or franchiser, grants a dealer, or franchisee the right to sell products in exchange for some type of consideration. franchisor may receive total percentage of sales in exchange for furnishing equipment. allows franchisee to start a business with limited capital and benefit from both the business experience of others.

power shopping center

bypasses the traditional department store anchor and combining off price stores and small stores with category killers. anchored by popular stores such as "gaP'

Beacons

can send real time messages and offers to customers with bluetooth enabled smartphones.

general merchandise wholesalers

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

limited line wholsalers

carry only a few product lines, such as groceries, lighting fixtures, or oil-well drilling equipment.

hypermarket

combination supermarket, and discount store; larger than superstore. ex: Carrefour

general merchandise retailers

department stores, discount stores, convenience stores, supermarkets, superstores, hypermarkets, warehouse clubs, warehouse showrooms

direct marketing, direct selling, and vending

direct marketing, direct selling, automatic vending. online retailing, catalog retailing, direct response marketing, telemarketing, television home shopping

multichannel retailing

employing multiple distribution channels that complement their brick and mortar stores with websites, catalogs, and apps where consumers can research products, read other buyers' reviews, and make actual purchases.

warehouse showroom

facility in a large, low-cost building with large on-premises inventories and minimal services.

factory outlet malls

feature discount and factory outlet stores carrying traditional manufacturer brands such as polo ralph Lauren, nike and guess. non competitive locations.

rak jobbers

full-service, specialty line wholesalers that own and maintain display racks in supermarkets, drug stores, and discount and variety stores. specialize in non food products with high profit margins.

full-service wholesalers include

general merchandise, limited line, specialty line

superstore

giant outlet offering all food and non food products found in supermarkets, as well as most routinely purchased products. ex: Walmart super-centers, super target

superregional shopping centers

have the widest and deepest product mixes and attract customers from many miles away, they have special attractions beyond shopping like skating rinks, amusement centers, or upscale restaurants. (gallaria)

Exterior Atmospherics

include appearance of store front, display windows, store entrances, and degree of traffic congestion. mainly important for new customers

community shopping center

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.

Retailing

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

merchant wholesalers

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

wholesaler

individual in an organization that sells products that are bought for resale, making other products, or general business operations. buy products and resell them to reseller, government, and institutional users.

cash-and-carry wholesalers

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

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. ex: H&M announced they were increasing prices to pay their employees a living wage and now they are positioned as socially responsible and not just a low priced one.

department store

large organization offering a wide product mic and organized into separate departments. ex: macy's, sears, jc penny

Strategic Issues in Retailing

location of retail stores, retail technology, retail positioning, store image, category management

online retailing

makes products available to buyers through internet connections. rapidly growing segment that most retailers now view as vital to their business. satisfies an increasing expectation among consumers to have multiple channels available to obtain the goods, and services that they desire at their convenience. will continue to escalate.

sales branches

manufactorer owned intermediaries that sell products and provide support services to the manufacturers sales force. located where large customers are concentrated and demand is high.

sales offices

manufactorer owned operations that provide services normally associated with agents. unlike sales branches they carry no inventory. may sell products that enhance the manufacturers own line.

manufactorers wholesalers

manufactorers sales branches and offices resemble merchant wholesalers operations.

selling agents

market either all of a specified product line or a manufacturers entire output. perform every wholesaling activity except taking little title to products. usually assume sales function for several producers at once.

direct selling

marketing of products to ultimate customers through face-to-face sales presentations at home or in the work place. ex: cutco, mary kay, can be done in a party format. can demonstrate products in a comfortable environment, some cities may prohibit this.

Types of Wholesalers

merchant wholesalers, agents and brokers, and manufacturers sales branches and offices.

Webrooming

most shoppers now research products online and then head to the nearest store to make the actual purchase.

Specialty Retailers

narrow and deep assortments. traditional speciality retailers, category killers, off price retailers

location of retail stores

neighborhood shopping centers, community shopping centers, regional shopping centers, superregional shopping centers, lifestyle shopping center, power shopping center

direct response marketing

occurs when a retailer advertises a product and makes it available through mail, telephone or online orders, generally customers use credit card, but other forms may be permitted. ex: television commercial offering exercise machines, cosmetics or household items. helps products gain widespread popularity.

specialty line wholesaler

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

lifestyle shopping center

open-air shopping center that features upscale specialty stores, dining, and entertainment, most usually owned by national chains. may have fountains, benches and other amenities that encourage "casual browsing" may include offices, hotels or residencies. (la centerra) creates customer loyalty by creating a "sense of place"

retailer

organization that purchases products for the purpose of reselling them to ultimate customers.

full-service wholesalers

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

telemarketing

performance of marketing related activities by telephone. may have prescreened list of prospective clients. increasingly restrictive ____ laws have made it less appealing and a less popular method.

retail technology

point-of-sale systems that allow salespeople to view a customers requests and needs online, an innovation lab, apps, mobile checkout, support for salespeople texting, a cloud-based mens personalized clothes service and begin to use social media to build relationships with consumers and generate buzz.

television home shopping

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

limited-service wholesalers

provide fewer marketing services than do full service wholesalers, and specialize in just a few functions.

commision merchants

receive goods on consignment from local sellers and negotiate sales in large, central markets. also called "factor merchants" these agents have broad powers regarding prices and terms of sale.

Wholesaling

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

agents

represent either buyers or sellers on a permanent basis

General Merchandise Retailers

retail establishment that offers a variety of product lines that are stocked in considerable depth.

store image

retail stores must project an image - functional and psychological picture in the customers mind - that appeals to its target market. store environment. merchandise quality and service quality are the key determinants of store image.

category management

retail strategy of managing groups of similar, often substitutable products produced by different manufacturers. first developed by food industry. important part for developing collaborative supply chain.

supermarket

self service store offering narrow product assortment in convenient locations. ex: Kroger, publix

discount store

self-service, general merchandise store offering brand-name and private-brand products at low prices. ex: Walmart, target, dollar general

nonstore retailing

selling of products outside the confines of a retail facility. accounts for increasing percentage of total retail sales, particularly as online retailing becomes more popular.

services provided by wholesalers

serve as an extension of the producers sales force, can provide financial assistance, serve as conduits for information within the marketing channel keeping producers up-to-date on market developments, assist with marketing strategy, help select inventory, can reduce a retailers burden of looking for and coordinating supply sources.

convenience store

small, self service store offering complete line of food products and some non-food products.

off-price retailers

stores that buy manufacturers seconds, overruns, returns, and off season production runs at below-wholesale prices for resale to consumers at deep discounts. offer limited lines of national-brand and designer merchandise, usually clothing, shoes or housewares. ex: tj maxx, marshals, burlington coat factory.

traditional specialty retailers

stores that carry a narrow product mix with deep product lines. "single line retailers" if they carry unusual depth in one category. typically sell apparel, jewelry, sporting goods, fabrics, computers etc. ex: Gap, The Limited, Sunglass Hut

atmospherics

the physical elements in a stores design that appeal to consumers emotions and encourage buying, help to create an image and position a retailer. can use different elements music, color, and complexity of layout and merchandise presentation to influence customer attention, mood, and shopping behavior.

mail-order wholesalers

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

automatic vending

use of machines to dispense products. one of the most impersonal forms of retailing, routinely purchased products are best for this.

direct marketing

use of the telephone, internet, and non-personal media to communicate product and organizational information to customers. includes: online retailing, catalog retailing, direct response marketing, telemarketing, television home shopping

regional shopping center

usually have the largest department stores, widest product mixes, and deepest product lines of all shopping centers. many shopping malls are this but they can also be community

Category killers

very large specialty store that concentrates on a major product category and competes on the basis of low prices and broad product availability. The expand rapidly and gain sizable market shares. ex: home depot, lowes, best buy, Toys R Us.

manufactorer agents

which account for more than half of all agent wholesalers, are independent intermediaries that represent two or more sellers and usually offer complete product lines to customers.

drop shippers

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

warehouse club

large scale, members only establishments combining cash and carry wholesaling without discount retailing. ex: sams club, Costco