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Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Chapter 13
Retailing and Wholesaling
13-2Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Understand the roles of retailers and wholesalers in the marketing channel.
2. Describe the major types of retailers.3. Understand the marketing decisions
facing retailers and wholesalers.4. Identify the major types of
wholesalers.
13-3Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
• Founded by John Forzani, former CFL player
• Corporate segment: 252 stores (Sport Chek, Sports Experts, Coast Mountain Sports)
• Franchise segment: 192 stores (Athmosphere, RnR)
• 2005 sales of $1.2 billion, has 16.1% market share of Canadian sporting goods market
• Explosive growth in the 1980’s
• Challenged by U.S. big box stores, who offer larger stores, deeper selection
• Store designs are flexible, able to locate in shopping malls
• Use service levels and community involvement as a differentiator
• Focus on keeping costs low
The Forzani Group
13-4Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Understand the roles of retailers and wholesalers in the marketing channel.
2. Know the major types of retailers.3. Understand the marketing decisions
facing retailers and wholesalers.4. Know the major types of
wholesalers.
13-5Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Retailing
• Retailing– All activities involved in selling goods or
services directly to final consumers for their personal, nonbusiness use.
• Retailer– Business whose sales come primarily
from retailing.
13-6Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Understand the roles of retailers and wholesalers in the marketing channel.
2. Know the major types of retailers.3. Understand the marketing decisions
facing retailers and wholesalers.4. Know the major types of
wholesalers.
13-7Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Types of Retailers
• Amount of service• Product lines• Relative prices• Organizational
approach
• Self-service retailers– Customers are willing to
self-serve to save money– Convenience stores and
fast moving shopping goods
• Limited-service retailers– Most department stores
• Full-service retailers– Salespeople assist
customers in every aspect of shopping experience
– High-end department stores and specialty stores
13-8Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Discussion QuestionRetailer Level of Service
• Self service checkout scanners are growing in use.
• What advantages for retailer? Consumer?
• What are the disadvantages? ????
13-9Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Types of Retailers• Amount of service• Product lines• Relative prices• Organizational
approach
• Specialty stores– Narrow product lines
with deep assortments• Department stores
– Wide variety of product lines
• Supermarkets• Convenience stores
– Limited line• Superstores
– Food, nonfood, and services
• Category killers– Giant specialty stores
13-10Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Types of Retailers
• Amount of service• Product lines• Relative prices• Organizational
approach
• Discount stores– Low margins are
offset by high volume
• Off-price retailers– Independent off-
price retailers• TJ Maxx, Marshall’s
– Factory outlets• Levi Strauss, Reebok
– Warehouse clubs• Sam’s Club, Costco
13-11Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Types of Retailers
• Amount of service• Product lines• Relative prices• Organizational
approach
• Corporate chain stores.
• Voluntary chains• Retailer
cooperatives• Franchise
organizations• Merchandising
conglomerates
13-12Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Understand the roles of retailers and wholesalers in the marketing channel.
2. Know the major types of retailers.3. Understand the marketing decisions
facing retailers and wholesalers.4. Know the major types of
wholesalers.
13-13Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Retailer Marketing Decisions
• Target market and Positioning decision– Define well target market and strong
positioning• Product variables
– Assortment– Services mix– Store atmosphere
• Price decision:– Markups and volume are inversely related
13-14Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Retailer Marketing Decisions
• Promotion– Retailers use any or all five tools to reach
consumers
• Place decision– Location is critical to attract the target market– Central business districts– Shopping centres
• Regional• Neighbourhood
– Power centres
13-15Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Retailing
• The Future of Retailing– New retail forms and shortening retail
life cycles• Wheel-of-retailing concept
– Growth of non-store retailing• Mail-order, television, phone, online
shopping
– Retail convergence• The merging of consumers, products,
prices, and retailers
13-16Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Retailing
• The Future of Retailing– Rise of mega retailers– Growing importance of retail
technology– Global expansion of major retailers– Retail stores as “Communities” or
“Hangouts”
13-17Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Understand the roles of retailers and wholesalers in the marketing channel.
2. Know the major types of retailers.3. Understand the marketing decisions
facing retailers and wholesalers.4. Know the major types of
wholesalers.
13-18Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Wholesaling
• Wholesaling– All activities involved in selling goods
and services to those buying for resale or business use.
• Wholesaler– A firm engaged primarily in wholesaling
activity.
13-19Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Wholesaling
• Wholesalers add value by performing the following functions:– Selling and promoting– Buying and assortment building– Bulk-breaking– Warehousing– Transportation– Financing– Risk bearing– Market information– Management services and advice
13-20Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Types of Wholesalers
• Merchant Wholesalers• Brokers and Agents • Manufacturers’ and
retailers’ branches and offices
• Full-service wholesalers– Wholesale merchants– Industrial distributors
• Limited-service wholesalers– Cash-and-carry
wholesalers– Truck wholesalers
(jobbers)– Drop shippers– Rack jobbers– Producer’s cooperatives– Mail-order wholesalers
13-21Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Types of Wholesalers
• Merchant Wholesalers• Brokers and Agents • Manufacturers’ and
retailers’ branches and offices
• Brokers and agents do not take title of the goods.
• Brokers– Bring buyers and
sellers together and assist in negotiation
• Agents– Manufacturers’ agents– Selling agents– Purchasing agents– Commission merchants
13-22Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Types of Wholesalers
• Merchant Wholesalers• Brokers and Agents • Manufacturers’ and
retailers’ branches and offices
• Sales branches and offices– Branches carry
inventory: lumber, auto equipment, parts
– Offices do not carry inventory: dry goods
• Purchasing officers– Perform roles similar to
brokers and agents; however, these individuals are employees of the organization
13-23Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Trends in Wholesaling
• Fierce resistance to price increases• Successful wholesalers must add value by
increasing efficiency and effectiveness• The distinction between large retailers
and wholesalers continues to blur• More services will be provided to retailers• Many wholesalers are going global
13-24Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Understand the roles of retailers and wholesalers in the marketing channel.
2. Know the major types of retailers.3. Know the major types of
wholesalers.4. Understand the marketing decisions
facing retailers and wholesalers.