Managing Retailing, Wholesaling and Logistics

Chapter 16

Four Themes

1. Retailing2. Private Labels3. Wholesaling4. Market Logistics

Retailing

• Retailing includes all activities involved in selling goods or services directly to final consumers for personal, non-business use.

• A retailer or retail store is any business enterprise whose sales volume comes primary from retailing

Major Retailer Types

• Specialty Store• Department Store• Supermarket • Convenience Store • Discount Store• Off-price retailer• Superstore• Catalog showroom

New Model for Success

Two models for department store to be successful:

1. Strong Retail Brand Approachin-house brands feature strongly and managers

take an active roll in choosing inventory

2. The Showcase Storenot only sells other people’s brands but often gets the vendors of those brands to take responsibility for stock, staff, and even selling space

Retail’s Marketing Decisions

• Target Market• Product Assortment

- Feature exclusive national brands that are not available at competing retailers- Feature mostly private branded merchandise- Feature blockbuster distinctive merchandise events- Feature surprise or ever-changing merchandise (Circle K)- Feature the latest or newest merchandise first- Offer merchandise customizing service- Offer a highly targeted assortment

• Service and Store Atmosphere- Prepurchase services

- Postpurchase Services

• Price Decision- High-markup, lower-volume group (fine specialty

stores)- low-markup, higher-volume group (mass merchandisers and discount stores)

• Communication DecisionRetailers use a wide range of communication tools to generate traffic and purchases. They place ads, run special sales, issue money-saving coupons, etc.

• Location Decision- General / central Business Districts

- Regional Shopping Centers- Community Shopping Centers- Strip Malls (also called Shopping Strips)- A Location within a Larger Stores

Trends in Retailing

• New Retail Forms and Combinations• Growth of Intertype Competition• Competition Between Store-based and

Non-Store Based Retailing• Growth of Giant Retails• Decline of Middle Market Retailers• Growing Investment in Technology• Global Profile of Major Retailers

Private Labels

A private label brand (also called reseller, store, house or distributor brand) is one retailers and wholesalers develop.

• House Brands• The Private Label Threat

Wholesaling

Wholesaling (distributors) includes all the activities involved in selling goods or services to those who buy for resale or business use.

The differentiation from Retailers:•Wholesalers pay less attention to promotion, atmosphere and location.• Wholesalers transaction usually larger; cover a larger trade area• The government deals with wholesalers and retails differently in terms of legal regulation and taxes

The Function of Wholesalers

• Selling and Promoting• Buying and assortment building• Bulk breaking• Warehousing• Transportation• Financing• Risk bearing• Market information• Management service and Counseling

Market Logistics

Market Logistics: involves planning the infrastructure to the meet demand, then implementing and controlling the physical flows of materials and final goods from points of origin to point of use, to meet customer requirements at a profit.

Four Steps of Marketing Logistics Planning

1. Deciding on the company’s value preposition to its customers.

2. Deciding on the best channel design and network strategy for reaching the customer

3. Developing operational excellence in sales forecasting, warehouse management, transportation management, and materials management

4. Implementing the solution with the best information system, equipment, policies and procedures

involving materials management, material flow system, and physical distribution, aided by IT

Integrated Logistics System

• Sales forecasting• Distribution scheduling• Production plans• Finishes-goods inventory decisions• Packaging• In-plant warehousing • Shipping-room processing • Outbound transportation• Field warehousing• Customer delivery and servicing

Market Logistics

Market Logistics Decisions

• How should orders be handled?

• Where should stock be located?

• How much stock should be held?

• How should goods be shipped?

Transportation Factors

• Speed

• Frequency

• Dependability

• Capability

• Availability

• Traceability

• Cost

Group Task

• Go to Matahari, Centro, Grand Palace, Sogo, Metro

• Analyze the differences of each Department Store (e.g. target market, style, price)

Thank You