Download - Chapter 12 Retailers, Wholesalers, and Their
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For use only with Perreault/Cannon/ McCarthy texts, © 2010 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin
Chapter 12
Retailers, Wholesalers, and Their Strategy Planning
www.mhhe.com/fourps
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1. Understand how retailers plan their marketing strategies.
2. Know about the many kinds of retailers that work with producers and wholesalers as members of channel systems.
3. Understand the differences among the conventional and nonconventional retailers—including Internet merchants and others who accept the mass-merchandising concept.
4. Understand scrambled merchandising and the “wheel of retailing.”
5. See why size or belonging to a chain can be important to a retailer.
At the end of this presentation, you should be able to:
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6. Know what progressive wholesalers are doing to modernize their operations and marketing strategies.
7. Know the various kinds of merchant and agent wholesalers and the strategies they use.
8. Understand why retailing and wholesaling have developed in different ways in different countries.
9. See why the Internet is impacting both retailing and wholesaling.
At the end of this presentation, you should be able to:
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Place Decisions and the Marketing Strategy Planning Process
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CH 12: Retailers, Wholesalers & Their Strategy Planning
Strategy planning for retailers
CH 10: Place and Development of Channel Systems
Nature of retailing
Future of retailing and wholesaling
CH 11: Distribution Customer Service & Logistics
Strategy planning for wholesalers
Marketing Strategy Planning for Retailers and Wholesalers (Exhibit 12-1)
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Must Select Target Markets and Marketing
Mixes Carefully
Must Select Target Markets and Marketing
Mixes Carefully
Marketers Must Understand Retailer/ Wholesaler Evolution
Marketers Must Understand Retailer/ Wholesaler Evolution
Retailing Deals with Final Customers
Retailing Deals with Final Customers
Wholesalers and Retailers Plan Their Strategies
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ConvenienceConvenience
Product SelectionProduct Selection
Fairness in DealingsFairness in Dealings
Helpful InformationHelpful Information
PricesPrices
Social ImageSocial Image
Key Features Affecting
Consumers’ Retail Choice
Shopping AtmosphereShopping Atmosphere
Planning a Retailer’s Strategy
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© 2010 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Shopping Atmosphere
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ConventionalOfferings
Single- &limited-line stores
Expandedassortment&/or reducedmargins & service
Supermarkets,disc. houses,mass merch., super-, club-stores, +
Safeway, IKEA, Home Depot, Costco
Added conv., higher margins,reduced assortment
C-stores, vending, door-to-door, phone,mail, some e-tail
7-11, Pepsi vending, Avon, Lands’ End, QVC
Expandedassortment,reducedmargins, moreinformation
Internet
eBay, Amazon, Zappos, Netflix, Dell
Expandedassortment& service
Specialtyshops &dept. stores
Ritz Camera, Coach, Gap, Macy’s
Conventional Retailers – Try to Avoid Price Competition (Exhibit 12-2)
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ConventionalOfferings
Single- &limited-line stores
Expandedassortment& service
Specialtyshops &dept. stores
Ritz Camera, Coach, Gap, Macy’s
Conventional Retailers – Try to Avoid Price Competition (Exhibit 12-2)
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ConventionalOfferings
Single- &limited-line stores
Expandedassortment&/or reducedmargins & service
Supermarkets,disc. houses,mass merch., super-, club-stores, +
Safeway, IKEA, Home Depot, Costco
Expandedassortment& service
Specialtyshops &dept. stores
RitzRitz Camera, Coach, Gap, Macy’s
Conventional Retailers – Try to Avoid Price Competition (Exhibit 12-2)
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Parties R Us is a large store containing nothing but party
supplies. The store carries everything from costumes to
party favors, decorations to invitations, and paper plates to
birthday candles. The selection is huge and prices are low.
There is even a party consultant on hand to help plan
parties. Parties R Us is a:
A. department store.B. catalog retailer.C. category killer.D. convenience store.
Checking Your Knowledge
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ConventionalOfferings
Single- &limited-line stores
Expandedassortment&/or reducedmargins & service
Supermarkets,disc. houses,mass merch., super-, club-stores, +
Safeway, IKEA, Home Depot, Costco
Added conv., higher margins,reduced assortment
C-stores, vending, door-to-door, phone,mail, some e-tail
7-11, Pepsi vending, Avon, Lands’ End, QVC
Expandedassortment& service
Specialtyshops &dept. stores
Ritz Camera, Coach, Gap, Macy’s
Conventional Retailers – Try to Avoid Price Competition (Exhibit 12-2)
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Vending Machines are Convenient
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Shop at Home in a Variety of Ways
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ConventionalOfferings
Single- &limited-line stores
Expandedassortment&/or reducedmargins & service
Supermarkets,disc. houses,mass merch., super-, club-stores, +
Safeway, IKEA, Home Depot, Costco
Added conv., higher margins,reduced assortment
C-stores, vending, door-to-door, phone,mail, some e-tail
7-11, Pepsi vending, Avon, Lands’ End, QVC
Expandedassortment,reducedmargins, moreinformation
Internet
eBay, Amazon, Zappos, Netflix, Dell
Expandedassortment& service
Specialtyshops &dept. stores
Ritz Camera, Coach, Gap, Macy’s
Conventional Retailers – Try to Avoid Price Competition (Exhibit 12-2)
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Amount of InformationAmount of Information
New Meaning of Convenience
New Meaning of Convenience
Moving Information
Moving Information
Misleading costs?
Misleading costs?
InternetRetailingInternetRetailing
Retailing on the Internet
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More efficient than
competitors
More efficient than
competitors
Complement their
stores/catalogs
Complement their
stores/catalogs
Supplement their stores
Supplement their stores
Very focused on specific needs
of target
Very focused on specific needs
of target
Four Online Retailer
Approaches
Four Online Retailer
Approaches
Four Online Retailer Approaches
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Interactive Exercise: Types of Retail Outlets
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© 2010 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Competitive Effects Influence Other Retailers
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Product Life Cycle Applies
to Retailing
Product Life Cycle Applies
to Retailing
Scrambled Merchandising= Higher Profits
Scrambled Merchandising= Higher Profits
Ethical Issues May Arise
Ethical Issues May Arise
The “Wheel of Retailing” Keeps on Rolling!
Why Retailers Evolve and Change
AND
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Walgreen’s, CVS, and other “drugstores” have become scaled-down versions of mass-merchandisers by adding small appliances, housewares, food, and other items to their traditional lines. This type of “scrambled merchandising” is meant to deal with the increasing desire that consumers have for:
A. personal service.B. convenience.C. low prices.D. prestigious brand names.E. quality.
Checking Your Knowledge
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An Example of a Large Retail Chain
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© 2010 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Big Chains Are Building Market Clout
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New Ideas SpreadNew Ideas Spread
Differences in Retailing in Different Nations
New Ideas SpreadNew Ideas Spread Some Countries Block Change
Some Countries Block Change
Mass-Marketing Requires Mass
Markets
Mass-Marketing Requires Mass
Markets
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Progressive Wholesalers Adapt
Progressive Wholesalers Adapt
Changing With the TimesChanging With the Times
Producing Value and Profits, Not Chasing Orders
Producing Value and Profits, Not Chasing Orders
Goodbye to Some?Goodbye to Some?
Ethical Issues?Ethical Issues?
New Strategies Needed To Survive
New Strategies Needed To Survive
What Is a Wholesaler?
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Wholesalers Add Value in Different Ways (Exhibit 12-4)
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Types of Wholesalers (Exhibit 12-5)
Does wholesaler own the products?
Does wholesaler own the products?
Agent wholesalers• Auction companies• Brokers• Manufacturers’ agents• Selling agents
Agent wholesalers• Auction companies• Brokers• Manufacturers’ agents• Selling agents
No
How many functions does the wholesaler perform?
How many functions does the wholesaler perform?
Yes
Service merchant wholesaler• General merchandise
wholesalers (or mill supply houses)
• Single-line or general-line wholesalers
• Specialty wholesalers
Service merchant wholesaler• General merchandise
wholesalers (or mill supply houses)
• Single-line or general-line wholesalers
• Specialty wholesalers
All functions
Limited-function merchant wholesaler
• Cash-and-carry wholesaler• Drop-shippers• Truck wholesalers• Rack jobbers• Catalog wholesalers
Limited-function merchant wholesaler
• Cash-and-carry wholesaler• Drop-shippers• Truck wholesalers• Rack jobbers• Catalog wholesalers
Some functions
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Types of Merchant
Wholesalers
ServiceService Limited - FunctionLimited - Function
• General merchandise
• Single-line (or general-line)
• Specialty
• Cash-and- Carry
• Drop-Shippers
• Truck
• Rack Jobbers
• Catalog
Types of Merchant Wholesalers
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Manufacturer’s Agents
Manufacturer’s Agents BrokersBrokers
Selling AgentsSelling AgentsAuction
CompaniesAuction
Companies
Types of Agent
Wholesalers
Types of Agent
Wholesalers
Agents Are Strong on Selling
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Atlantic Music distributes various types of musical instruments, sheet music, and accessories that are sold through independent music stores. It carries many different brands, such as Remo and Ludwig drums, and brass instruments from Yamaha, Hohner, and other manufacturers. Atlantic takes title to the musical instruments and supplies it resells, and provides a wide variety of services to its customers. Atlantic Music is a(n):
A. merchant wholesaler.B. limited service merchant wholesaler.C. auction company.D. manufacturer’s broker.E. intermediary.
Checking Your Knowledge
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What Will Happen to Retailers and Wholesalers in the Future?
Improved Logistics Efficiency
Improved Logistics Efficiency
Development of Specialized
Intermediaries
Development of Specialized
Intermediaries
New Web-Based Retailers
New Web-Based Retailers
Increasing CompetitionIncreasing
Competition
Marketers and
Consumers Can Expect
Marketers and
Consumers Can Expect
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1. Understand how retailers plan their marketing strategies.
2. Know about the many kinds of retailers that work with producers and wholesalers as members of channel systems.
3. Understand the differences among the conventional and nonconventional retailers—including Internet merchants and others who accept the mass-merchandising concept.
4. Understand scrambled merchandising and the “wheel of retailing.”
5. See why size or belonging to a chain can be important to a retailer.
You should now be able to:
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6. Know what progressive wholesalers are doing to modernize their operations and marketing strategies.
7. Know the various kinds of merchant and agent wholesalers and the strategies they use.
8. Understand why retailing and wholesaling have developed in different ways in different countries.
9. See why the Internet is impacting both retailing and wholesaling.
You should now be able to:
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• Retailing• General stores• Single-line stores• Limited-line stores• Specialty shop• Department stores• Mass-
merchandising concept
• Supermarkets• Discount houses
• Mass-merchandisers
• Supercenters• Hypermarkets• Convenience (food)
stores• Automatic vending• Door-to-door selling• Telephone and
direct-mail retailing• Wheel of retailing
theory
Key Terms
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• Scrambled merchandising
• Corporate chain• Cooperative chains• Voluntary chains• Franchise operation• Wholesaling• Wholesalers• Manufacturers’
sales branches• Merchant
wholesalers
• Service wholesalers• General
merchandise wholesalers
• Single-line (or general-line) wholesalers
• Specialty wholesalers
• Limited-function wholesalers
• Cash-and-carry wholesalers
• Drop-shippers
Key Terms
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• Truck wholesalers• Rack jobbers• Catalog wholesalers• Agent wholesalers• Manufacturer’s
agents• Export agents• Import agents• Brokers• Export brokers• Import brokers• Selling agents
• Combination export manager
• Auction companies
Key Terms