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Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Editio Chapter 13 Retailing and Wholesaling

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Page 1: Kotl pom 7ce_ppt_bas_13

Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Chapter 13

Retailing and Wholesaling

Page 2: Kotl pom 7ce_ppt_bas_13

13-2Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Learning Goals

1. Understand the roles of retailers and wholesalers in the marketing channel.

2. Describe the major types of retailers.3. Understand the marketing decisions

facing retailers and wholesalers.4. Identify the major types of

wholesalers.

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13-3Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

• Founded by John Forzani, former CFL player

• Corporate segment: 252 stores (Sport Chek, Sports Experts, Coast Mountain Sports)

• Franchise segment: 192 stores (Athmosphere, RnR)

• 2005 sales of $1.2 billion, has 16.1% market share of Canadian sporting goods market

• Explosive growth in the 1980’s

• Challenged by U.S. big box stores, who offer larger stores, deeper selection

• Store designs are flexible, able to locate in shopping malls

• Use service levels and community involvement as a differentiator

• Focus on keeping costs low

The Forzani Group

Page 4: Kotl pom 7ce_ppt_bas_13

13-4Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Learning Goals

1. Understand the roles of retailers and wholesalers in the marketing channel.

2. Know the major types of retailers.3. Understand the marketing decisions

facing retailers and wholesalers.4. Know the major types of

wholesalers.

Page 5: Kotl pom 7ce_ppt_bas_13

13-5Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Retailing

• Retailing– All activities involved in selling goods or

services directly to final consumers for their personal, nonbusiness use.

• Retailer– Business whose sales come primarily

from retailing.

Page 6: Kotl pom 7ce_ppt_bas_13

13-6Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Learning Goals

1. Understand the roles of retailers and wholesalers in the marketing channel.

2. Know the major types of retailers.3. Understand the marketing decisions

facing retailers and wholesalers.4. Know the major types of

wholesalers.

Page 7: Kotl pom 7ce_ppt_bas_13

13-7Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Types of Retailers

• Amount of service• Product lines• Relative prices• Organizational

approach

• Self-service retailers– Customers are willing to

self-serve to save money– Convenience stores and

fast moving shopping goods

• Limited-service retailers– Most department stores

• Full-service retailers– Salespeople assist

customers in every aspect of shopping experience

– High-end department stores and specialty stores

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13-8Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Discussion QuestionRetailer Level of Service

• Self service checkout scanners are growing in use.

• What advantages for retailer? Consumer?

• What are the disadvantages? ????

Page 9: Kotl pom 7ce_ppt_bas_13

13-9Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Types of Retailers• Amount of service• Product lines• Relative prices• Organizational

approach

• Specialty stores– Narrow product lines

with deep assortments• Department stores

– Wide variety of product lines

• Supermarkets• Convenience stores

– Limited line• Superstores

– Food, nonfood, and services

• Category killers– Giant specialty stores

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13-10Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Types of Retailers

• Amount of service• Product lines• Relative prices• Organizational

approach

• Discount stores– Low margins are

offset by high volume

• Off-price retailers– Independent off-

price retailers• TJ Maxx, Marshall’s

– Factory outlets• Levi Strauss, Reebok

– Warehouse clubs• Sam’s Club, Costco

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13-11Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Types of Retailers

• Amount of service• Product lines• Relative prices• Organizational

approach

• Corporate chain stores.

• Voluntary chains• Retailer

cooperatives• Franchise

organizations• Merchandising

conglomerates

Page 12: Kotl pom 7ce_ppt_bas_13

13-12Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Learning Goals

1. Understand the roles of retailers and wholesalers in the marketing channel.

2. Know the major types of retailers.3. Understand the marketing decisions

facing retailers and wholesalers.4. Know the major types of

wholesalers.

Page 13: Kotl pom 7ce_ppt_bas_13

13-13Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Retailer Marketing Decisions

• Target market and Positioning decision– Define well target market and strong

positioning• Product variables

– Assortment– Services mix– Store atmosphere

• Price decision:– Markups and volume are inversely related

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13-14Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Retailer Marketing Decisions

• Promotion– Retailers use any or all five tools to reach

consumers

• Place decision– Location is critical to attract the target market– Central business districts– Shopping centres

• Regional• Neighbourhood

– Power centres

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13-15Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Retailing

• The Future of Retailing– New retail forms and shortening retail

life cycles• Wheel-of-retailing concept

– Growth of non-store retailing• Mail-order, television, phone, online

shopping

– Retail convergence• The merging of consumers, products,

prices, and retailers

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13-16Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Retailing

• The Future of Retailing– Rise of mega retailers– Growing importance of retail

technology– Global expansion of major retailers– Retail stores as “Communities” or

“Hangouts”

Page 17: Kotl pom 7ce_ppt_bas_13

13-17Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Learning Goals

1. Understand the roles of retailers and wholesalers in the marketing channel.

2. Know the major types of retailers.3. Understand the marketing decisions

facing retailers and wholesalers.4. Know the major types of

wholesalers.

Page 18: Kotl pom 7ce_ppt_bas_13

13-18Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Wholesaling

• Wholesaling– All activities involved in selling goods

and services to those buying for resale or business use.

• Wholesaler– A firm engaged primarily in wholesaling

activity.

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13-19Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Wholesaling

• Wholesalers add value by performing the following functions:– Selling and promoting– Buying and assortment building– Bulk-breaking– Warehousing– Transportation– Financing– Risk bearing– Market information– Management services and advice

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13-20Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Types of Wholesalers

• Merchant Wholesalers• Brokers and Agents • Manufacturers’ and

retailers’ branches and offices

• Full-service wholesalers– Wholesale merchants– Industrial distributors

• Limited-service wholesalers– Cash-and-carry

wholesalers– Truck wholesalers

(jobbers)– Drop shippers– Rack jobbers– Producer’s cooperatives– Mail-order wholesalers

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13-21Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Types of Wholesalers

• Merchant Wholesalers• Brokers and Agents • Manufacturers’ and

retailers’ branches and offices

• Brokers and agents do not take title of the goods.

• Brokers– Bring buyers and

sellers together and assist in negotiation

• Agents– Manufacturers’ agents– Selling agents– Purchasing agents– Commission merchants

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13-22Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Types of Wholesalers

• Merchant Wholesalers• Brokers and Agents • Manufacturers’ and

retailers’ branches and offices

• Sales branches and offices– Branches carry

inventory: lumber, auto equipment, parts

– Offices do not carry inventory: dry goods

• Purchasing officers– Perform roles similar to

brokers and agents; however, these individuals are employees of the organization

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13-23Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Trends in Wholesaling

• Fierce resistance to price increases• Successful wholesalers must add value by

increasing efficiency and effectiveness• The distinction between large retailers

and wholesalers continues to blur• More services will be provided to retailers• Many wholesalers are going global

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13-24Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Learning Goals

1. Understand the roles of retailers and wholesalers in the marketing channel.

2. Know the major types of retailers.3. Know the major types of

wholesalers.4. Understand the marketing decisions

facing retailers and wholesalers.