Chapter 15

1. General-merchandise retailer (8)

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

Retailing

All transactions in which the buyer intends to consume the product through personal, family, or household use.

Types of Wholesalers (3) (merchant wholesalers, agents and brokers, and manufacturers' sales branches and offices

Classified: whether a wholesaler is independently owned or owned by a producer, whether it takes title to (owns) the products it handles, the range of services provided, and the breadth and depth of its product lines.

-Television home shopping

Forms of selling in which products are presented to television viewers, who can buy them by calling a toll-free number and paying with a credit card. Advantage: Products can be demonstrated easily, and an adequate amjount of time can be spent showing the product so viewers are well informed. (most popular among older customers, who tend to be less comfortable with online shopping)

-Online retailing

Retailing that makes products available to buyers through computer connections.

-Supermarket

store, self-service, offering a complete line of food products and some non-food products. (Kroger, Safeway, Publix)

Multichannel retailing

(Many retailers now engage in this) Employing multiple distribution channels that complement thier brick-and-mortar stores with websites, catalogs, and apps where consumers can research new products, read other buyers' reviews, and make actual purchases.

2. Agents and Brokers

(Perform fewer functions) Negotiate purchaes and expedite sales but do not take title to products. (functional middleman, they perform a limited number of services in exchange for commission, which vis generally based on the product's selling price. Agents: Represent either buyers or sellers on a permanent basis Brokers: Are intermediaries that buyers or sellers employ temporairly.

-- Brokers --

A broker's primary purpose is to bring buyers and sellers together. They are not involved in financing or physical possesion, have no authority to set prices, and assume almost no risks. Instead they offer customers specialized knowledge of a particular commodity and a network of established contacts.

Category Management

A retail strategy of managing groups of similar, often substitutable, products produced by different manufacturers.

-Direct-Response marketing

A type of marketing in which a retailer advertises a product and makes it available through mail or telephone orders. (A television commercial offering excercise machines, cosmetics, or household cleaning products available through a toll-free number, and a newspaper or magazine advertisement for a seris of children's books available by filling out the form in the ad or calling the toll-free number).

-Catalog marketing

A type of marketing in which an organization provides a catalog from which consumers make selections and place orders by mail, telephone, or the Internet.

-Power shopping center

A type of shopping center that combines off-price stores with caregory killers. (Outlet malls) Manufactueres place these stores in noncompetitve locations, often outside metropalitan areas.

-Lifestyle shopping center

A type of shopping center that is typically open air and features upscale specaility dining, and entertainment stores. (Highland Village) Appealing architectural design is an important aspect of these "mini cities" which may include urban streets or parks, and is intended to create customer loyalty by creating a sense of place.

-Neighorhood shopping centers (strip malls)

A type of shopping center usually consisting of several small convenience and specialty stores. Retailers consider thier target markets to be consumers who live within two or three miles of their stores, or 10 minutes driving time. (Randalls shopping center)

-Community shopping centers

A type of shopping center with one or two department stores, some speciality stores, and convenience stores. They serve a larger geogrpahic area and consumers are willing to drive longer to get there. (Pearland Town center)

-Regional shopping centers

A type of shopping center with the largest department stores, widest product mixes, and deepest product lines of all shopping centers. Many shopping malls are regional shopping centers.

-Superregional shopping centers

A type of shopping center with the widest and deepest product mixes that attracts customers from many miles away. Superregional ceners often have special atttractions beyond stores such as skating rinks, amusement centers, or upscale resteraunts. (Mall of America, and The Galleria)

-Category Killer

A very large speicialty store that concentrates on a major product category and competes on the basis of low prices and product availability. (Home Depot and Lowe's = Home improvement, Staples = Office supply, Barnes and Noble = bookseller, PetCo and Petsmart = pet supply, Best Buy = consumer electronic, and Toys R Us = toys. Online retailing has taken market share away from category killers in recent times.

Franchising

An arrangement in which a supplier (franchiser) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration.

Wholesaler

An individual or organization that sells products that are bought for resale, for making other products, or for general business operations. (Sysco supplies restaurants, hotels, schools with everything from frozen and fresh food to paper products to medical and cleaning supplies.) (Financial networks) Wholesailing activities are not limited to goods.

Retailer

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

-Off-Price retailers

Are stores that buy manufactuerers' seconds, overruns, and off-season production runs at below-wholesale prices for resale to consumers at deep discounts. (T.J. Max, Marshalls, Stein Mart and Burlington Coat Factory)

-Hypermarket

Combination supermarket and discount store, larger than a superstore. (Carrefour) Retailers have struggled with making the hypermarket concept successful in the United States.

-Warehouse showroom

Facility in a large, low-cost building with large on premisses inventories and minimal service. (IKEA) Five basic characterisitcs: Large, low-cost buildings, warehouse materials-handling technology, vertical merchandise displays, large on-premise inventories, and minimal services.

Types of retail stores (2)

General-merchandise retailer (8) Specialty retailer (3)

-Superstore

Giant outlet offering all food and non-food products found in supermarkets, as well as most routinely purchased products. (Walmart Supercenters, SuperTarget)

Retail Postioning

Identifying an inserted or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment. (H&M is postioned as a low-priced fashion forward retailer, and in an effort to be associated with fair business practices, the chain said that prices would increase to allow the retailer to pay its employees a living wage, repostioning itself as a socially responsible retailer.

2. Speciality Retailers (3)

In contrast, emphasize narrow and deep assortments, They do not sell specialty items, they offer substantial assortments in few product lines.

1. Merchant wholesalers (2)

Independently owned businesses that take title to goods, assume ownership risks, and buy and resell prodcuts to other wholesalers, business customers, or retailers. A producer is likely to rely on merchant wholesalers when selling directly to consumers would be economically unfeasible.

-Department store

Large organization offering a wide product mix and organized into seperate departments (Macy's, Sears, JC Penny)

-Warehouse club

Large-scale, members-only establishments combining cash-and-carry wholesaling with discount retailing. (Sam's club, Costco) Offers the same types of products that are sold in discount stores but in a limited range of sizes and styles.

Location of retail stores

Making a good location decision is even more important because, once decided, it is the least flexible variable of the marketing mix. Location is an important strategic decision that dictates the limited geographic trading area from which a store draws its customers.

-- Agents (3) --

Manufacturer's 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. (Commonly used in sales of apparel, machinery, and equipment, steel, furniture, automotive products, electrical goods, and some food items. Are restricted to a territorial limit and little to no control over pricing) Selling agents: Market either all of a specified product line or a manufacturer's entire output. Thet perform every wholesaling activity except taking title to products. (Some firms use in place of a marketing department. Have no territorial limit and have complete authority over prices) Commision merchants: (factor merchants) Recieve goods on consignment from local sellers and negotiate sales in large, central markets. These agents have broad power regarding prices and terms of sale. (Most often found in agricultural marketing.)

-Limited-service wholesalers (4)

Merchant wholesalers that provide fewer marketing services that do full-service wholesalers and specialize in just a few functions. Producers perform the remaining functions or pass them on to customers or other intermediares. Take the title of merchandise but often do not deliver merchandise, grant credit, provide marketing information, store inventory, or plan ahead for customers' future needs. Cash-and-carry wholesalers: are intermediaries whose customers, often small businesses, pay cash and furnish transportation. (groceries, building materials, and electrical or office supplies) Truck wholesalers: (truck jobbers) transport a limited line of products directly to customers for on-the-spot inspection and selection. Drop shippers: (desk jobbers) take title to products and negotiate sales but never take actual possession of products. 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).

-- Full service wholesalers (3) --

Perform the widest possible range of wholesaling functions. Customers rely on them for product availability, suitable product assortments, breaking large quantites into smaller ones, financial assistance, and technical advice and serivce. (They have high operating expenses because they provide a wider range of functions. General-merchandise wholesalers: Carry a wide product mix but limited depth within products lines. (Drugs, nonperishable foods, cosmetics, detergents, and tobacco) Limited-line wholesalers: Carry only a single product line or a few items within a line but offer an extensive assortment of products within those lines. (Amerisource Bergen Corporation is a limitied-line wholesaler of pharmaceuticals and health products) Specialty-line wholesalers: Carry only a single product line or a few items within a product line. (narrowest range of products.) Rack jobbers: Are full-service, specialty line wholesalers that own and maintain display racks in stores.

Retail technology

Point of sale systems: allow sales people to view a customers requests and needs online Mobile checkout: lets a salesperson who has been helpoing a customer in the store check them out on the spot rather than having to look for a register. Apps (developing can be costly) Smart Mirrors Virtual fit Apply pay

3. Manufacturers' sales Branches and offices

Sales branches: Are manufacturer owned intermeidiares that sell products and provide support services to the manufacturer's sales force. They are usually situated away from the manufacturing plant, located where large customers are concentrated on high demand. Sales office: Are manufacturer owned operations that provide services normally associated with agents. Located away from the manufacturer plant but unlike sales branches they carry no inventory. They may sell products that enhance the manufacturer's own product line. This can strengthen supply chain effeciencey.

-Discount store

Self-service, general merchandise store offering brand-name and private-brand products at low prices. (Walmart, Target) Extreme value stores: Retailers that are a fraction of the size of conventional discount stores and typically offer very low prices on smaller size name-brand nonperishable household items. (Dollar general)

Beacons

Send real-time messages and offers to customers with Bluetooth- enabled smartphones. Must have the retailers app downloaded onto thier smartphones for it to work.

Services provided by Wholesalers

Serve as an extension of the producer's sales force. Wholesalers also provide financial assistance. (Pay for transporting goods, reduces producer's warehousing expenses by holding goods in inventory) Serve as conduits for information within the marketing channel, keeping producers up-to-date on market developments and passing along the manufacturer's promotional plans to other intermediaires. Support retailers by assisting with marketing strategy, distribution component Help retailers select inventory Can also reduce a retailer's burden of looking for and coordinating supply sources.

Webrooming

Shoppers who research products online and then head to the nearest store to make the actual purchase.

-Convenience store

Small, self service store, open long amount of hours, offering narrow product assortment in convenient locations. (7-Eleven)

Store Image

Store enviroment, merchandise quality, and service quality are key determinants of store image.

-Traditional specialty retailers. (limited line retailers)

Stores that carry a narrow product mix with deep product lines (The Limited, Gap, Sunglass Hut, and Foot Locker) Specialty sores usually offer better selections and more sales expertise than department stores, their main competitor

Direct selling

The marketing of products to ultimate consumers through face-to-face sales presentations at home or in thr workplace.

-Telemarketing

The performance of marketing related activities by telephone. The FTC enforces violations and the FCC (Federal Communications Commission) ruled that companies are no longer allowed to call customers using prerecorded marketing calls because they had done business in the past.

-Atmospherics

The physical elements in a store's desgin that appeal to consumers' emotions and encourage buying, help to create an image and position a retailer. Exterior atmospheric elemets: appearance of storefront, display windows, store entrances, and degree of traffic congestion. (important to new customers) Interior asmospheric elements: wall and floor coverings, dressing facilties, and store fixtures. Color and sound are sensory components

Automatic Vending

The use of machines to dispense products. It is one of the most impersonal forms of retailing, and it accounts for a very small miniority of all retail sales.

Direct marketing (5)

The use of the telephone, Internet, and non personal media to communicate product and organizational information to customers, who can then purchase products via mail, telephone, or the Internet. Direct marketing is one type of Nonstore retailing: Is the selling of products outside the confines of a retail facility.

Wholesailing

Transactions in which products are bought for resale, for making other products, or for general business operations. It DOES NOT INCLUDE EXCHANGES WITH ULTIMATE CONSUMERS.