Chapter 13

Brokers and agents

do not take title, perform a few functions, and specialize by product line or customer type. Brokers bring buyers and sellers together and assist in negotiations. Agents represent buyers or sellers.

Independent off-price retailers

either are independently owned and run or are divisions of larger retail corporations. Although many off-price operations are run by smaller independents, most large off-price retailer operations are owned by bigger retail chains. Examples include store retailers such as TJ Maxx and Marshalls.

Self-service retailers

serve customers who are willing to perform their own locate-compare-select process to save money. They include Wal-Mart and supermarkets.

discount store

(Target, Kmart, or Walmart) sells standard merchandise at lower prices by accepting lower margins and selling higher volume. Leading "big-box" discounters, such as Walmart, Costco, and Target, now dominate the retail scene. However, even "small-box" discounters are thriving in the current economic environment. Dollar General, the nation's largest small-box discount retailer, makes a powerful value promise for the times: "Save time. Save money. Every day."

Warehouse clubs

(also known as wholesale clubs or membership warehouses), such as Costco, Sam's Club, and BJ's, operate in huge, drafty, warehouse-like facilities and offer few frills. However, they offer ultralow prices and surprise deals on selected branded merchandise. Warehouse clubs have grown rapidly in recent years. These retailers appeal not only to low-income consumers seeking bargains on bare-bones products but also to all kinds of customers shopping for a wide range of goods, from necessities to extravagances.

category killers

Best Buy, Home Depot, and PetSmart). They feature stores the size of airplane hangars that carry a very deep assortment of a particular line. Category killers are found in a wide range of categories, including electronics, home-improvement products, books, baby gear, toys, linens and towels, party goods, sporting goods, and even pet supplies.

Shopper Marketing

Focusing the entire marketing process on turning shoppers into buyers as they approach the point of sale, whether during in-store, online, or mobile shopping. - focusing on the shopper journey.

Manufacturers' and retailers' branches and offices

are a form of wholesaling by sellers or buyers themselves, rather than through independent wholesalers.

Retailer cooperatives

are a group of independent retailers that band together to set up a joint-owned, central wholesale operation and conduct joint merchandising and promotion efforts. Ace Hardware Associated Grocers

Retailers

are businesses whose sales come primarily from retailing.

Franchises

are contractual associations between a manufacturer, wholesaler, or service organization (a franchisor) and independent business people (franchisees) who buy the right to own and operate one or more units in the franchise system.

power centers

are huge unenclosed shopping centers consisting of a long strip of retail stores, including large, freestanding anchors such as Walmart, Home Depot, Costco, Best Buy, Michaels, PetSmart, and OfficeMax.

Central business districts

are located in cities and include department and specialty stores, banks, and movie theaters.

Superstores

are much larger than regular supermarkets and offer a large assortment of routinely purchased food products, nonfood items, and services. Walmart, Target, Meijer, and other discount retailers offer supercenters, very large combination food and discount stores.

Convenience stores

are small stores that carry a limited line of high-turnover convenience goods. After several years of stagnant sales, these stores are now experiencing growth. They are shedding the image of a "truck stop" where men go to buy gas, beer, cigarettes, or shriveled hotdogs on a roller grill and are instead offering freshly prepared foods and cleaner, safer, more-upscale environments.

lifestyle centers

are smaller, open-air malls with upscale stores, convenient locations, and nonretail activities, such as a playground, skating rink, hotel, dining establishments, and a movie theater complex. "The line between shopping, entertainment, and community building has blurred," says one analyst. "Shopping centers aren't just places to buy things. They're social centers, places for entertainment, and employment hubs."

Merchant wholesalers

are the largest group of wholesalers and include: Full-service wholesalers that provide a full set of services Limited service wholesalers that provide few services and specialized functions

Supermarkets

are the most frequently visited type of retail store. Today, however, they are facing slow sales growth because of slower population growth and an increase in competition from discounters (Walmart, Costco, and Dollar General) on the one hand and specialty food stores (Whole Foods Market, Trader Joe's, Sprouts) on the other.

Corporate chains

are two or more outlets that are commonly owned and controlled. Size allows them to buy in large quantities at lower prices and gain promotional economies Macy's CVS have many advantages over independents. Given the promotional economies gained, corporate chains hire specialists to deal with areas such as pricing, promotion, merchandising, inventory control, and sales forecasting.

Voluntary chains

are wholesale-sponsored groups of independent retailers that engage in group buying and common merchandising. IGA Western Auto

Full-service retailers

assist customers in every phase of the shopping process, resulting in higher costs that are passed on to the customer as higher prices. Examples include department stores and specialty stores.

Wholesalers

buy mostly from producers and sell mostly to retailers, industrial consumers, and other wholesalers. As a result, many of the nation's largest and most important wholesalers are largely unknown to final consumers.

Major Store Retailers

can also be classified by the length and breadth of their product assortments.

Department stores

carry a wide variety of product lines. In recent years, department stores have been squeezed between more focused and flexible specialty stores on the one hand and more efficient, lower-priced discounters on the other. In response, many have added promotional pricing to meet the discount threat. Others have stepped up the use of store brands and single-brand designer shops to compete with specialty stores. Still others are trying catalog, telephone, and online selling. Service remains the key differentiating factor. Retailers such as Nordstrom, Saks, Neiman Marcus, and other high-end department stores are doing well by emphasizing exclusive merchandise and high-quality service

community shopping center

contains between 15 and 50 retail stores. It normally contains a branch of a department store or variety store, a supermarket, specialty stores, professional offices, and sometimes a bank.

Omni-channel retailing

creates a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping, creating a single shopping experience.

Service retailers

include hotels and motels, banks, airlines, restaurants, colleges, hospitals, movie theaters, tennis clubs, bowling alleys, repair services, hair salons, and dry cleaners. Service retailers in the United States are growing faster than product retailers.

Retailing

includes all the activities in selling products or services directly to final consumers for their personal, non-business use.

Segmentation targeting, differentiation, and positioning

involve the definition and profile of the market so the other retail marketing decisions can be made

Everyday low pricing (EDLP)

involves charging constant, everyday low prices and offering few sales or discounts.

High-low pricing

involves charging higher prices on an everyday basis, coupled with frequent sales and other price promotions.

Retail convergence

involves the merging of consumers, producers, prices, and retailers, creating greater competition for retailers and greater difficulty differentiating offerings.

The rise of megaretailers

involves the rise of mass merchandisers and specialty superstores, the formation of vertical marketing systems, and a rash of retail mergers and acquisitions. Superior information systems Buying power Large selection

Buying and assortment building

involves the selection of items and building of assortments needed by customers, saving the customers work.

Risk bearing

involves the wholesaler absorbing risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence.

Bulk breaking

involves the wholesaler buying in large quantities and breaking into smaller lots for customers.

Warehousing

involves the wholesaler holding inventory, reducing its customers' inventory cost and risk.

Financing

involves the wholesaler providing credit and financing suppliers by ordering early and paying on time.

Market information

involves the wholesaler providing information to suppliers and customers about competitors, new products, and price developments.

Selling and promoting

involves the wholesaler's sales force helping the manufacturer reach many small customers at a low cost.

Management services and advice

involves wholesalers helping retailers train their sales clerks, improve store layouts, and set up accounting and inventory control systems.

shopping center

is a group of retail businesses planned, developed, owned, and managed as a unit.

Specialty stores

like shoe stores, carry narrow product lines with deep assortments within those lines.

Factory outlets

manufacturer-owned and operated stores by firms such as J. Crew, Gap, Levi Strauss, and others—sometimes group together in factory outlet malls and value-retail centers. At these centers, dozens of outlet stores offer prices as much as 50 percent below retail on a wide range of mostly surplus, discounted, or irregular goods.

off-price retailers

moved in to fill the ultralow-price, high-volume gap. Ordinary discounters buy at regular wholesale prices and accept lower margins to keep prices down. By contrast, off-price retailers buy at less-than-regular wholesale prices and charge consumers less than retail. Off-price retailers can be found in all areas, from food, clothing, and electronics to no-frills banking and discount brokerages. The three main types of off-price retailers are independents, factory outlets, and warehouse clubs.

Price policy

must fit the target market and positioning, product and service assortment, competition, and economic factors. High markup on lower volume Low markup on higher volume

Limited service retailers

provide more sales assistance because they carry more shopping goods about which customers need more information. Examples include Sears and JC Penney.

The growing importance of retail technology

provides better forecasts, inventory control, electronic ordering, transfer of information, scanning, online transaction processing, improved merchandise handling systems, and the ability to connect with customers.

neighborhood shopping centers or strip malls

that generally contain between 5 and 15 stores. These centers, which are close and convenient for consumers, usually contain a supermarket, perhaps a discount store, and several service stores.

regional shopping center, or regional shopping mall

the largest and most dramatic shopping center, has from 50 to more than 100 stores, including two or more full-line department stores. It is like a covered mini-downtown and attracts customers from a wide area.

Showrooming

the practice of checking out merchandise in stores, then buying it online.

Webrooming:

the practice of first checking out merchandise online, then buying it in traditional stores.