Chapter 13 - Retailing & Wholesaling

three types of off-price retailers (stores that sell merchandise bought at less-than-regular wholesale price)

1. Factory Outlets 2. Independent off-price retailers 3. Warehouse clubs

Retail atmospherics

Retailers want to create a unique store experience, one that suits the target market and moves customers to buy

Reatiler

a business whose sales come primarily from retailing

Franchise

a contractual association between a manufacturer, wholesaler, or service organization (a franchisor) and independent businesspeople (franchisees) who buy the right to own and operate one or more units in the system (Panera)

Wholesaler

a firm engaged primarily in wholesaling activities

Retailing

all the activities involved in selling goods and services directly to final consumers for their personal, nonbusiness use

Wholesaling

all the activities involved in selling goods and services o those buying for resale or business use

full service retailers can be found

at high-end stores selling luxury items like Tiffany or Nordstrom

A shopping center is a

group of retail businesses built on site that is planned, developed, owned as a unit

Merchant wholesalers are

independently owned businesses that take title to all merchandise handled. broken down into full-service and limited-service

Service Retailers

retailer whose product line is actually a service (hotels, colleges, banks, etc.)

Factory outlets are

owned and operated by manufacturers

independent off-price retailers are

owned and run by entrepreneurs or by divisions of larger retail corporations (TJ Maxx)

Full-service wholesalers

provide a full line of services: carrying stock, maintaining a sales force, offering credit, making deliveries, etc.

limited service retailers

provide more sales assistance because they carry more shopping goods about which customers need information (JC Penney)

Agents:

represent buyers or sellers on a more permanent basis than brokers

Warehouse clubs

sell limited selections of goods at deep discounts to consumers who pay membership fees (Costco)

wholesaler add value by performing one or more of the following:

selling & promoting, buying, bulk breaking, warehousing, transportation, financing, risk-bearing, market information, management service/advice

self-service retailers

serve customers who are willing to perform their own locate-compare-select process to save time & money (kohl's)

Wheel-of-Retailing Concept

states that many new types of retailing forms begin as low-margin, low-price, and low-status operations. they challenge established retailers that have become "fat" by letting their costs and margins increase. the new retailers eventually become the conventional retailers they replaced

Corporate chain

two or more outlets that are commonly owned and controlled (Target)

Shopper marketing:

using in-store promotions and advertising to extend brand equity to "the last mile" and encourage favorable point-of-purchase decision

Voluntary Chain

wholesaler-sponsored group of independent retailers engaged in group buying and merchandising (Independent Grocer's Alliance)

Manufacturers' Sales Branches and Offices

wholesaling is done by sellers or buyers themselves rather than through independent wholesalers

Wholesale industry remains vulnerable to two enduring trends

1. the need for ever-greater efficiency 2. need added-value customer relationships or they may get dropped

two ways brokers and agents differ from merchant wholesalers:

1. they do not take title to goods 2. they perform only a few functions

two types of full-service wholesalers:

1. wholesale merchants - sell primarily to retailers 2. industrial distributors - sell to manufacturers

4 types of shopping centers:

1. Regional shopping center- over 50-100 stores 2. community shopping center - 15-50 3. neighborhood shopping centers/strip malls - 5-15 4. Lifestyle centers - smaller, open-air malls with upscale stores & non-retail activities

types of limited-service wholesalers:

1. cash-and-carry: carry limited line of fast moving goods to small retailers for cash 2. truck wholesalers -selling and delivery function 3. drop shipper - selects a manufacturer who ships merchandise directly to a customer 4. rack jobbers - service grocery, drug retailers, nonfood items 5. mail-order or web - send catalogs or maintain web sites

4 major types of retail organizations

1. corporate chains 2. franchise 3. voluntary chain 4. retailer cooperative

Types of wholesalers:

1. merchant wholesalers - full-service & limited-service 2. brokers and agents 3. manufacturers' sales branches & offices

STP in a retail setting characteristics

1. product assortment should differentiate it while matching target shopper's expectations 2. services mix can also help set one retailer apart from another 3. price policy must fit its target market and positioning 4. with solid targeting and positioning a retailer can compete effectively against even the largest & strongest competitors

Major Store Retailer Types

1. specialty store - Radioshack 2. department store - Macy's 3. supermarket - Kroger 4. convenience store - 7-Eleven 5. discount store - Walmart 6. off-price retailer - TJ Maxx 7. Superstore 8. Service Retailers

Experimental Retailing

exemplified by Cabela's - stores are as much natural history museums for outdoor enthusiasts as they are retail outlets

Retailer Cooperative

a group of independent retailers who jointly establish a central buying organization and conduct joint promotion efforts (Ace Hardware)

Broker

brings buyers and sellers together and assists in negotiation. they are paid by the party who hired them

Price Decision for retailers:

either seek high markups on lower volume (specialty stores) or low markups on higher volume (mass merchandisers and discount stores)