To accompany A Framework for Marketing Management, 2nd Edition Slide 1 in Chapter 15©2003 Prentice Hall, Inc.

Chapter 15Chapter 15

Managing Retailing, Managing Retailing, Wholesaling, and Wholesaling, and Market LogisticsMarket Logistics

PowerPoint by Karen E. JamesPowerPoint by Karen E. JamesLouisiana State University - ShreveportLouisiana State University - Shreveport

To accompany A Framework for Marketing Management, 2nd Edition Slide 2 in Chapter 15©2003 Prentice Hall, Inc.

ObjectivesObjectives

Determine the types of organizations in this sector.

Learn what marketing decisions organizations in this sector make.

Understand the major trends in this sector.

To accompany A Framework for Marketing Management, 2nd Edition Slide 3 in Chapter 15©2003 Prentice Hall, Inc.

RetailingRetailing

Retailing Basics

Types of retailers

Marketing decisions

Retailing trends

Retail life cycle

Wheel-of-retailing

Service levels

Retail positioning strategies

Nonstore retailing

Corporate retailing

To accompany A Framework for Marketing Management, 2nd Edition Slide 4 in Chapter 15©2003 Prentice Hall, Inc.

RetailingRetailing

Specialty store

Department store

Supermarket

Discount store

Convenience store

Off-price retailer Superstore

Major Store Retailer Types

To accompany A Framework for Marketing Management, 2nd Edition Slide 5 in Chapter 15©2003 Prentice Hall, Inc.

RetailingRetailing

Retail-store types pass through the retail life cycle.

The wheel-of-retailing describes how new store types emerge.

Retailers can offer one of four levels of service:

– Self-service, self-selection, limited service, and full service

To accompany A Framework for Marketing Management, 2nd Edition Slide 6 in Chapter 15©2003 Prentice Hall, Inc.

RetailingRetailing

Four broad retail positioning strategies include:

– Bloomingdale’s– Tiffany– Sunglass Hut– Wal-Mart

Non-store retailing has been growing faster than store retailing

To accompany A Framework for Marketing Management, 2nd Edition Slide 7 in Chapter 15©2003 Prentice Hall, Inc.

RetailingRetailing

Corporate chain store

Voluntary chain

Retailer cooperative

Consumer cooperative

Franchise organization

Merchandising conglomerate

Major Types of Retail Organizations

To accompany A Framework for Marketing Management, 2nd Edition Slide 8 in Chapter 15©2003 Prentice Hall, Inc.

RetailingRetailing

Retailing Basics

Types of retailers

Marketing decisions

Retailing trends

Target market

Product assortment and placement

Services mix and store atmosphere

Price

Promotion

Place

To accompany A Framework for Marketing Management, 2nd Edition Slide 9 in Chapter 15©2003 Prentice Hall, Inc.

RetailingRetailing

General business district

Regional shopping center

Community shopping center

Strip mall (shopping strip)

Location within a larger store or operation

Location Options for Retailers

To accompany A Framework for Marketing Management, 2nd Edition Slide 10 in Chapter 15©2003 Prentice Hall, Inc.

RetailingRetailing

Retailing Basics

Types of retailers

Marketing decisions

Retailing trends

New retail forms

Intertype competition

Growth of giant retailers

Technology

Global expansion

Selling experiences

Competition between store-based and non-store-based retailing

To accompany A Framework for Marketing Management, 2nd Edition Slide 11 in Chapter 15©2003 Prentice Hall, Inc.

WholesalingWholesaling

Wholesaling

Wholesaling basics

Types of wholesalers

Marketing decisions

Wholesaling trends

Wholesaling excludes manufacturers, farmers, and retailers

Wholesalers differ from retailers in three key ways

Wholesalers handle many functions more efficiently than do manufacturers

To accompany A Framework for Marketing Management, 2nd Edition Slide 12 in Chapter 15©2003 Prentice Hall, Inc.

WholesalingWholesaling

Selling and promoting

Buying and assortment building

Bulk breaking

Warehousing

Transportation

Financing

Risk bearing

Market information

Wholesaler Functions

To accompany A Framework for Marketing Management, 2nd Edition Slide 13 in Chapter 15©2003 Prentice Hall, Inc.

WholesalingWholesaling

Wholesaling

Wholesaling basics

Growth and types of wholesalers

Marketing decisions

Wholesaling trends

Wholesalers vary in type and function

Wholesaling has been growing due to two key factors:

– Many factories are located far from buyers

– An increasing need to adapt product quantities, features, or packages to meet buyer needs

To accompany A Framework for Marketing Management, 2nd Edition Slide 14 in Chapter 15©2003 Prentice Hall, Inc.

WholesalingWholesaling

Merchant wholesalers

Full-service wholesalers

Limited-service wholesalers

Brokers & agents

Brokers

Agents

Manufacturers’ and retailers’ branches and offices

Miscellaneous wholesalers

Major Wholesaler Types

To accompany A Framework for Marketing Management, 2nd Edition Slide 15 in Chapter 15©2003 Prentice Hall, Inc.

WholesalingWholesaling

Wholesaling

Wholesaling basics

Types of wholesalers

Marketing decisions

Wholesaling trends

Target market

Product assortment and placement

Price

Promotion

Place

To accompany A Framework for Marketing Management, 2nd Edition Slide 16 in Chapter 15©2003 Prentice Hall, Inc.

WholesalingWholesaling

Wholesaling

Wholesaling basics

Types of wholesalers

Marketing decisions

Wholesaling trends

Direct buying trends initially threatened wholesalers

Wholesalers have adapted by:– Adding value– Reducing costs– Strengthening

relationships with manufacturers

To accompany A Framework for Marketing Management, 2nd Edition Slide 17 in Chapter 15©2003 Prentice Hall, Inc.

Market LogisticsMarket Logistics

Interrelated Aspects Associated with Market Logistics:

– Physical distribution– Supply chain management (SCM)– Value network– Demand chain planning– Market logistics– Integrated logistics systems (ILS)

To accompany A Framework for Marketing Management, 2nd Edition Slide 18 in Chapter 15©2003 Prentice Hall, Inc.

Market LogisticsMarket Logistics

Key Elements

Market-logistics objectives

Market-logistics decisions

Market logistics lessons

Logistics involve trade-offs between costs and customer service

Maximizing profits, not sales, is key

A total system basis should be considered

Designing a system that will minimize the cost of achieving objectives should be the outcome

To accompany A Framework for Marketing Management, 2nd Edition Slide 19 in Chapter 15©2003 Prentice Hall, Inc.

Market LogisticsMarket Logistics

M = T + FW + VW + SWhere . . .

M = total market-logistics cost of proposed system; T = total freight cost of proposed system;FW = total fixed warehouse cost of proposed system;VW = total variable warehouse cost of proposed system S = total cost of lost sales due to average delivery delay

Calculating the Cost of Market-Logistics Systems

To accompany A Framework for Marketing Management, 2nd Edition Slide 20 in Chapter 15©2003 Prentice Hall, Inc.

Market LogisticsMarket Logistics

Key Elements

Market-logistics objectives

Market-logistics decisions

Market logistics lessons

Order processing

Warehousing– Storage, distribution,

automated warehouses Inventory

– Determine reorder point, relevant cost comparison, optimal order quantity

Transportation– Containerization– Private vs. contract carriers

To accompany A Framework for Marketing Management, 2nd Edition Slide 21 in Chapter 15©2003 Prentice Hall, Inc.

Market LogisticsMarket Logistics

Key Elements

Market-logistics objectives

Market-logistics decisions

Market logistics lessons

A senior V.P. is needed as the single contact point for all logistical elements

Senior V.P. must maintain close control

Software and systems are essential for competitively superior logistics performance