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