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Chapter 18

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  1. Chapter 18 Managing Retailing, Wholesaling, and Logistics

  2. Learning Objectives • What major types of marketing intermediaries occupy this sector? • What major changes are occurring in the modern retail marketing environment with respect to competitive market structure and technology? • What marketing decisions do marketing intermediaries make? • What does the future hold for private label brands? • What are some of the important issues in wholesaling?? • What are some important issues in logistics?

  3. Retailing • Retailing • All the activities in selling goods or services directly to final consumers for personal, nonbusiness use • Retailer/retail store • Any business enterprise whose sales volume comes primarily from retailing

  4. Types of retailers • Store retailers, nonstore retailers, and retail organizations

  5. Types of retailers • Store retailers: • Specialty store • Department store • Supermarket • Convenience store • Drug store • Discount store • Extreme value or hard-discount store • Off-price retailer • Superstore • Catalog showroom

  6. Types of retailers • Levels of service for store retailers • Self-service • Self-selection • Limited service • Full service

  7. Types of retailers • Nonstore retailing • Direct marketing • Direct selling • Automatic vending • Buying services

  8. Types of retailers • Corporate retailing and franchising

  9. Corporate Retailing and Franchising • Franchises are distinguished by three characteristics: • The franchisor owns a trade or service mark and licenses it to franchisees in return for royalty payments • The franchisee pays for the right to be part of the system • The franchisor provides its franchisees with a system for doing business

  10. The Modern Retail Marketing Environment • Competitive retail market structure • New retail forms and combinations • Growth of giant retailers • Growth of intertype competition • Emergence of fast retailing • Decline of middle-market retailers

  11. The Modern Retail Marketing Environment • Role of technology • Retailers use technology for business operations, to enhance the consumer shopping experience inside the store, and Internet/social media strategies

  12. Marketing Decisions • Target market • Channels • Product assortment • Procurement • Prices • Services • Store atmosphere • Store activities and experiences • Communications • Location

  13. Product Assortment • Develop product differentiation • Feature exclusive national brands • Feature private-label merchandise • Feature distinctive-merchandise events • Feature ever-changing merchandise • Feature the latest merchandise first • Offer merchandise-customizing services • Offer a highly targeted assortment

  14. Services • Retailers must decide on the services mix to offer customers: Prepurchase services Postpurchase services Ancillary services

  15. Location Central business districts Regional shopping centers Community shopping centers Stand-alone stores Location within a larger store Shopping strips

  16. Private Labels • A private-label brand is a brand that retailers and wholesalers develop • Role of private labels • Private-label success factors

  17. Wholesaling • Wholesaling includes all the activities in selling goods or services to those who buy for resale or business use

  18. Major wholesaler types Merchant wholesalers Full-service wholesalers Specialized wholesalers Limited-service wholesalers Manufacturers’/ retailers’ branches/offices Brokers and agents

  19. Wholesaler functions • Selling and promoting • Buying and assortment building • Bulk breaking • Warehousing • Transportation • Financing • Risk bearing • Market information • Management services and counseling

  20. Market Logistics • Supply chain management (SCM) • Market logistics • Integrated logistics systems (ILS) • Lean manufacturing

  21. Market logistics planning • Deciding on company’s value proposition • Selecting best channel design and network strategy • Developing operational excellence • Implementing solution

  22. Market-Logistics Decisions • Order processing: how should we handle orders? • Warehousing: where should we locate our stock? • Inventory: how much stock should we hold? • Transportation: how should we ship goods?

  23. Figure 18.1Optimal Ordering Quantity

  24. Transportation • Containerization • Piggyback, fishyback, trainship, and airtruck • Private vs. contract vs. common carriers

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