MGT301MGT301Principles of Principles of MarketingMarketing

Lecture-30Lecture-30

SummarySummaryof of

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Producer

End users

End users

Interme-diaries

Interme-diaries

Producer

Marketingactivities Demand

Demand Demand

Push Strategy

Pull Strategy

Marketing activities

Demand

Marketing Logistics and Supply Marketing Logistics and Supply Chain ManagementChain Management

Functions of Logistics SystemsFunctions of Logistics Systems

InventoryWhen to order

How much to orderJust-in-time

InventoryWhen to order

How much to orderJust-in-time

CostsMinimize Costs ofAttaining Logistics

Objectives

CostsMinimize Costs ofAttaining Logistics

Objectives

WarehousingStorage

Distribution

WarehousingStorage

Distribution

Order ProcessingSubmittedProcessed

Shipped

Order ProcessingSubmittedProcessed

Shipped

Logistics

FunctionsTransportation Water, Truck, Rail, Pipeline & Air

Today’s TopicsToday’s Topics

Retailing and WholesalingRetailing and Wholesaling

RetailingRetailing

Retailing is the process by which goods and Retailing is the process by which goods and services are sold to consumers for their services are sold to consumers for their personal use.personal use.

Retailers provide many benefits such as:Retailers provide many benefits such as:

providing an assortment of merchandise under one providing an assortment of merchandise under one roof,roof,

allowing access to goods customers might never see,allowing access to goods customers might never see,

providing interesting environments in which to spend providing interesting environments in which to spend our leisure time.our leisure time.

Retailing can be done in stores (store retailing) Retailing can be done in stores (store retailing) or out of a store (nonstore retailing) such as:or out of a store (nonstore retailing) such as: Direct mail,Direct mail, Catalogs,Catalogs, Telephone,Telephone, Home shopping shows, Home shopping shows, Internet.Internet.

““...all activities involved in selling, renting, ...all activities involved in selling, renting, and providing goods and services to and providing goods and services to ultimate consumers for personal, family or ultimate consumers for personal, family or household use.”household use.”

-Berkowitz et al-Berkowitz et al

Classification of RetailingClassification of Retailing

Amount of Service

Self-Service, Limited-Service andFull-Service Retailer

Amount of Service

Self-Service, Limited-Service andFull-Service Retailer

Product LineLength and Breadth of the Product

Assortment

Product LineLength and Breadth of the Product

Assortment

Relative PricesPricing Structure that is Used

by the Retailer

Relative PricesPricing Structure that is Used

by the Retailer

Retail OrganizationsIndependent, Corporate, or Contractual

Ownership Organization

Self-Service Retailer

Provide Few or No Services to Shoppers

Limited-ServiceRetailers

Provide Only a Limited Number of Services

to Shoppers

Full-ServiceRetailers

Retailers that Provide a Full Range of Services

to Shoppers

Amount of ServiceAmount of Service

Specialty Stores

Department Stores

Supermarkets

Convenience Stores

Superstores

Discount Stores

Narrow Product Line, Deep Assortment

Wide Variety of Product Lines i.e. Clothing, Home Furnishings

Wide Variety of Food, Laundry, & Household Products

Limited Line of High-Turnover Convenience Goods

Large Assortment of Routinely Purchased Food & Nonfood Products

Standard Merchandise at Lower Prices

Off-Price Retailers Changing Collection of Higher-Quality Goods at a Reduced Price

Warehouse Clubs Limited Selection of Brand-Name Grocery Items, Appliances

Product LineProduct Line

Discount Stores

Discount Stores

“Off-Priced” Retailers

“Off-Priced” Retailers

CatalogShowrooms

CatalogShowrooms

Relative PricesRelative Prices

CorporateChains

Retailerswanting economies

of scale

Retailerswanting economies

of scale

Retail OrganizationRetail Organization

CorporateChains Franchise

Operations

Retailerswanting economies

of scale

Retailerswanting economies

of scale

CorporateChains

Franchise Operations

VoluntaryChains

Cooperative Chains

Retailerswanting economies

of scale

Retailerswanting economies

of scale

Young Store

Young Store

Brand New StoreBrand New Store

High Margin

High Price

High Status

Low Margin

Low Price

Low Status

Older Store

The Wheel of Retailing The Wheel of Retailing

Nonstore RetailingNonstore Retailing

Mail Order• Catalogs - from clothing to computers

• Direct Mail - brochure offering a product or service at one point in time.

Mail Order• Catalogs - from clothing to computers

• Direct Mail - brochure offering a product or service at one point in time.

Direct Selling• Door-to-Door Sales - declining in U.S.• Parties & Networks - presentations

• Telemarketing - over the phone

Direct Selling• Door-to-Door Sales - declining in U.S.• Parties & Networks - presentations

• Telemarketing - over the phone

Automatic Vending• Best suited to inexpensive merchandise

and food and beverages.

Automatic Vending• Best suited to inexpensive merchandise

and food and beverages.

Direct Response Television• Home Shopping Networks - TV channels

that sell products

Direct Response Television• Home Shopping Networks - TV channels

that sell products

Retailer’s Product Assortment and Retailer’s Product Assortment and Services DecisionsServices Decisions

Product Assortment Decisions• Width and Depth of Assortment

• Quality of Products• Product Differentiation Strategies

Product Assortment Decisions• Width and Depth of Assortment

• Quality of Products• Product Differentiation Strategies

Services MixKey Tool of Nonprice Competitionfor Setting One Store Apart From

Another.

Services MixKey Tool of Nonprice Competitionfor Setting One Store Apart From

Another.

Store’s Atmosphere• Physical Layout

• “Feel” That Suits the Target Market and Moves Customers to Buy

Store’s Atmosphere• Physical Layout

• “Feel” That Suits the Target Market and Moves Customers to Buy

Factors Influencing Store Factors Influencing Store AtmosphereAtmosphere

Employee Type and Density

Merchandise Type and Density

Fixture Type and Density

Sound

Odors

Visual Factors

Most InfluentialFactors on

StoreAtmosphere

Most InfluentialFactors on

StoreAtmosphere

Retailer Marketing DecisionsRetailer Marketing Decisions

Retailer MarketingMix

Retailer MarketingMixRetailer StrategyRetailer Strategy

Target Market

Retail Store Positioning

Product and Service

Assortment

Prices

Promotion

Place (Location)

LocationLocation Product AssortmentProduct Assortment Customer ServiceCustomer Service AtmosphericsAtmospherics PricingPricing PromotionPromotion

Strategic Issues in RetailingStrategic Issues in Retailing

WholesalingWholesaling

What is Wholesaling?

All the activities involved in selling goods and services All the activities involved in selling goods and services to those buying for resale or business use.to those buying for resale or business use.

Wholesaler - those firms engaged primarily in Wholesaler - those firms engaged primarily in wholesaling activity.wholesaling activity.

BuyingBuying SellingSelling StoringStoring TransportingTransporting Providing Makret InformationProviding Makret Information FinancingFinancing Risk TakingRisk Taking

Services Provided by Wholesaling Services Provided by Wholesaling IntermediariesIntermediaries

Customer Expectations for Customer Expectations for WholesalingWholesaling

Suppliers’ Logistics SystemsSuppliers’ Logistics Systems

AccuracyEasy

Inquiryand

Order

EasyInquiry

andOrder Reliable

DeliveryOn-timeDelivery

On-timeDelivery

Error-FreeInvoicing

Error-FreeInvoicing

Post-SalesSupport

Post-SalesSupport

Easy ClaimsHandling

Easy ClaimsHandling

Types of WholesalersTypes of Wholesalers

Merchant Wholesaler

Independently Owned Business that Takes

Title to the Merchandise

it Handles.

Merchant Wholesaler

Independently Owned Business that Takes

Title to the Merchandise

it Handles.

Manufacturers’Sales Branches

and Offices

Wholesaling by Sellersor Buyers Themselves Rather Than Through

IndependentWholesalers.

Manufacturers’Sales Branches

and Offices

Wholesaling by Sellersor Buyers Themselves Rather Than Through

IndependentWholesalers.

Brokers/ Agents

They Don’t Take Title to the Goods, and TheyPerform Only a Few

Functions.

Brokers/ Agents

They Don’t Take Title to the Goods, and TheyPerform Only a Few

Functions.

Wholesaler Marketing DecisionsWholesaler Marketing Decisions

Wholesaler MarketingMix

Wholesaler MarketingMixWholesaler StrategyWholesaler Strategy

Target Market

Retail Store Positioning

Product and Service

Assortment

Prices

Promotion

Place (Location)

Compete on value (not just price.)Compete on value (not just price.)Save customers time and energy.Save customers time and energy.

Make shopping fun.Make shopping fun.

So….So….

End of Place part….. End of Place part…..

Enough for today. . Enough for today. . ..

SummarySummary

Retailing and WholesalingRetailing and Wholesaling

Classification of RetailingClassification of Retailing

Amount of Service

Self-Service, Limited-Service andFull-Service Retailer

Amount of Service

Self-Service, Limited-Service andFull-Service Retailer

Product LineLength and Breadth of the Product

Assortment

Product LineLength and Breadth of the Product

Assortment

Relative PricesPricing Structure that is Used

by the Retailer

Relative PricesPricing Structure that is Used

by the Retailer

Retail OrganizationsIndependent, Corporate, or Contractual

Ownership Organization

Nonstore RetailingNonstore Retailing

Mail Order• Catalogs - from clothing to computers

• Direct Mail - brochure offering a product or service at one point in time.

Mail Order• Catalogs - from clothing to computers

• Direct Mail - brochure offering a product or service at one point in time.

Direct Selling• Door-to-Door Sales - declining in U.S.• Parties & Networks - presentations

• Telemarketing - over the phone

Direct Selling• Door-to-Door Sales - declining in U.S.• Parties & Networks - presentations

• Telemarketing - over the phone

Automatic Vending• Best suited to inexpensive merchandise

and food and beverages.

Automatic Vending• Best suited to inexpensive merchandise

and food and beverages.

Direct Response Television• Home Shopping Networks - TV channels

that sell products

Direct Response Television• Home Shopping Networks - TV channels

that sell products

WholesalingWholesaling

Types of WholesalersTypes of Wholesalers

Merchant Wholesaler

Independently Owned Business that Takes

Title to the Merchandise

it Handles.

Merchant Wholesaler

Independently Owned Business that Takes

Title to the Merchandise

it Handles.

Manufacturers’Sales Branches

and Offices

Wholesaling by Sellersor Buyers Themselves Rather Than Through

IndependentWholesalers.

Manufacturers’Sales Branches

and Offices

Wholesaling by Sellersor Buyers Themselves Rather Than Through

IndependentWholesalers.

Brokers/ Agents

They Don’t Take Title to the Goods, and TheyPerform Only a Few

Functions.

Brokers/ Agents

They Don’t Take Title to the Goods, and TheyPerform Only a Few

Functions.

Next….Next….

Review 3rd P (Place)Review 3rd P (Place)

MGT301MGT301Principles of Principles of MarketingMarketing

Lecture-30Lecture-30