chapter

retailing andmultichannel marketing

sixteen

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16-2

LEARNING OBJECTIVES

LO 16-1 Discuss the four factors manufacturers should consider as they develop their strategy for working with retailers.

LO 16-2 Outline the considerations associated with choosing retail partners.

LO 16-3 List the three levels of distribution intensity.

LO 16-4 Describe the various types of retailers.LO 16-5 Describe the components of a retail

strategy.LO 16-6 Identify the benefits of stores.LO 16-7 Identify the benefits of multichannel

retailing.LO 16-8 Detail the challenges of multichannel

retailing

16-3

Factors for Establishing a Relationship with Retailers

Managing a

multichannel

strategy

Developing a retail strategy

Identifying types of Retailers

Choosing retailing partners

16-4

Choosing Retail PartnersChannel Structure

Degree of vertical integration

Manufacturers brand

Power of manufacturer and

retailer©M Hruby

16-5

Choosing Retail PartnersCustomer Expectations

16-6

Choosing Retail PartnersChannel Member Characteristics

Larger firms

Less likely to use supply

chain intermediaries

Can gain more control, be

more efficient, and save money.

16-7

Choosing Retail PartnersDistribution Intensity

Intensive

Exclusive

Selective©

Jeff

Gre

en

berg

/Ph

oto

Ed

it

©S

usa

n V

an

Ett

en

/Ph

oto

Ed

it

check yourself

16-8

1.What issues should manufacturers consider when choosing retail partners?

2.What is the difference between intensive, exclusive, and selective levels of distribution intensity?

16-9

Types of Retailers

16-10

Food Retailers

Supermarket SupercenterWarehouse

ClubConvenience

Store

Limited nonfood

Includes discount store

Limited assortment Limited variety

Differentiates different types of foods

Wal-Mart, Meijer, K-Mart, Target

Little serviceIncludes:Costco, Sams, BJ’s

Good locations

Peapod Website

16-11

General Merchandise Retailers

• Broad variety and deep assortmentDepartment Stores

• Broad variety at low pricesFull-line Discount

• Limited merchandise with service in small storeSpecialty

• Specialty for pharmaceutical and heathDrugstores

• Discount with narrow but deep assortmentCategory Specialist

• Full line, limited, very low pricesExtreme value

• Inconsistent assortment of brand name at low pricesOff-Price

16-12

GNC Private Brands

Courtesy GNC Corporation Courtesy GNC Corporation

16-13

Services Retailers

Firms that primarily sell services rather

than merchandise, are a large and growing

part of the retail industry

Ryan McVay/Getty Images

check yourself

16-14

1.What strategies distinguish the different types of food retailers?

2.What strategies distinguish the different types of general merchandise retailers?

3.Are organizations that provide services to consumers considered to be retailers?

16-15

Developing a Retail Strategy Using the Four P’s: Product

Providing the right mix of merchandise and services

AP Photo/David Kohl

16-16

Price

Price defines the value of both the merchandise and

the service provided

Courtesy DDB - London

Walmart’s Profits Drop

16-17

Promotion

Retailers use a wide variety of promotions, both within

their retail environment and through mass media

Cou

rtesy

Bass

Pro

Sh

op

s

AP P

hoto

/Mark

Hu

mp

hre

y

16-18

Place

Convenience is a key ingredient to success

©M Hruby

The McGraw-Hill Companies, Inc/Jill Braaten, photographer

16-19

Benefits of Stores for Consumers

Browsing

Touching and Feeling

Personal Service

Cash and Credit

Entertainment and Social Interaction

Instant Gratification

Risk Reduction

16-20

Benefits of the Internet and Multichannel Retailing

Deeper and Broader Selection

Personalization

Gain Insights into Consumer Shopping Behavior

Increase Customer Satisfaction and Loyalty

Expand Market Presence

16-21

Effective Multichannel Marketing

Integrated CRM

Brand Image

PricingSupply Chain

check yourself

16-22

1.What are the components of a retail strategy?

2.What are the advantages of traditional stores versus Internet-only stores?

3.What challenges do retailers face when marketing their products through multiple channels?