Marketing Intermediary

1. Marketing Intermediary • A business firm that operates between producers and consumers or business users, also called a middleman. • May be a wholesaler, retailer, or facilitating intermediary.

2. Retailing • Activities involved in selling goods and services to ultimate consumers © PhotoDisc

3. Retailing • Activities involved in selling goods and services to ultimate consumers • An intermediary that handles the redistributes of goods to retailers, other distributors, and sometimes end consumers Wholesaler © PhotoDisc

4. Retailing • Activities involved in selling goods and services to ultimate consumers • An intermediary that takes title to the goods it handles and redistributes them to retailers, other distributors, and sometimes end consumers Wholesaler • A distribution channel consisting of direct communication to a consumer or business recipient Direct Marketing

5. Figure 14.2: Major Types of Wholesaling Intermediaries

6. Types of Wholesaling Intermediaries • Sales branch: carries inventory and processes orders from available stock • Sales office: serves as a regional office for for manufacturer’s sales personnel, but does not carry an inventory Manufacturer-Owned Facilities Square D

7. Types of Wholesaling Intermediaries • Trade fair: Periodic show in which manufacturers in a particular industry display their products and services for wholesale and retail buyers • Merchandise mart: A permanent facility in which manufacturers display products for visiting wholesale buyers Manufacturer-Owned Facilities Americas Mart

8. Types of Wholesaling Intermediaries • Merchant wholesaler: An independently owned intermediary that takes title to the goods it sells • Merchant wholesalers include: • Rack Jobbers • Cash-and-Carry Wholesalers • Truck Wholesalers • Drop Shippers • Mail Order Wholesalers Independent Wholesaling Intermediaries

9. Types of Wholesaling Intermediaries • Agents and Brokers: A second group of independent intermediaries who may or may not take possession of the goods, but never take title. They include: • Commission merchants • Auction houses • Brokers • Selling agents • Manufacturer’s agents Independent Wholesaling Intermediaries

10. Types of Wholesaling Intermediaries • Manufacturers’ agent: A wholesaling intermediary who represents multiple manufacturers of related, but noncompeting products • Work on a commission basis and are assigned to geographic territories Independent Wholesaling Intermediaries

11. Fundamental Retail Challenges: Shelf Space • Stockkeeping unit (SKU): specific product offering within a product line that is used to identify items within the line • Slotting allowances: fees paid by manufacturers to secure shelf space from retailers for their products • Assortment Management: selecting the right mix of products and product lines to meet target market.

12. Types of Retailers • Retailers can be categorized by: • Form of ownership • Shopping effort by customer • Services provided to customers • Product lines • Location of retail transactions

13. Classifying by Product Lines: This classification system groups stores by the product lines they carry. • Limited-line store: A retailer that offers a large assortment within a single product line, or within a few related product lines • Examples include IKEA home furnishings and Ethan Allen furniture • Category killers: retailers that combine huge selection and low prices within a single product category • Home Depot and Staples are examples

14. Department store: large store that offers a variety of merchandise, such as men’s and women’s clothing, appliances, linens, and furniture • Mass merchandiser: store that stocks a wider line of goods than a department store, usually without the same depth of assortment within each line • Supercenters: Large stores, though still smaller than hypermarkets, that combine discount store merchandise and groceries • Off-price retailers: Stores that find exceptional deals on well-known, brand-name clothing and resells them at low prices

15. Classification of Retailers by Form of Ownership • Chain stores: Groups of stores that operate under central ownership and management and sell essentially the same product lines • Chain stores have the advantages of purchasing and advertising economies of scale • Independent Retailers: account for about 43% of all retail sales • Advantage of friendly, personalized service • Cooperatives: Groups of independent retailers who band together to increase buying and advertising power

16. Ace Hardware • Cooperatives like Ace help independent retailers compete with chains

17. Classification by Shopping Effort: Classification system based on the reasons why consumers shop at particular retail outlets • Retail stores can be classified as: • Convenience • Shopping • Specialty

18. Classifying by Services Provided: This classification system consists of three retailer types: • Self-service Store (e.g., Kmart) • Self-selection Store (e.g., Winn-Dixie or Kroger grocery stores) • Full-service Retailers (e.g., Dillard’s or Macy’s)