RETAILING AND

WHOLESALING

CHAPTER

THE VALUE OF RETAILING

Retailing

Retailing includes all activities involved in

Selling and providing goods and

services to ultimate consumers for personal,

or household use.

Classificationof

Retail Establishments

Ownership-place

Level of Service-promotion

Product Assortment-product

Price

Retailers manipulate their 4 P’s to get the best position in the

marketplace– in other words, to create a competitive advantage

CLASSIFYING RETAIL OUTLETS

IndependentRetailers-one store

ownership

Chain Stores-many stores but only one

owner

Franchises-many owners of many

stores

CLASSIFICATION BY OWNERSHIP

Product and

Trade Name

Franchising

Business

Format

Franchising

Dealer agrees to sell certain

products provided by a

manufacturer, but can use any sales

tactics he chooses.

Ex-Michelin Tires, Avon

Dealer must sell the franchiser’s

product in the exact way the

franchiser prescribes.

Ex – McDonalds, Wendy's

BASIC FORMS OF FRANCHISING

Full ServiceFull ServiceSelf ServiceSelf Service

Discount storesDiscount stores

Exclusive storesExclusive storesFactory outletsWarehouse clubsFactory outletsWarehouse clubs

CLASSIFICATION BY LEVEL OF

SERVICE

The mix of products offered to the

consumer by the retailer; also called

the product assortment

Deep & narrow-like Starbucks

Or

Shallow & broad like Walmart

CLASSIFICATION BY PRODUCT

OFFERING

CLASSIFICATION BY PRODUCT

OFFERING

� Depth of Product Line

• Specialty Outlets

• Category Killers

� Breadth of Product Line

• General Merchandise Stores

• Scrambled Merchandising

Why do this?

Breadth versus depth of merchandise lines

Department Stores

Specialty Stores

Supermarkets

Drugstores

Convenience Stores

Discount Stores

Restaurants

MAJOR TYPES OF RETAILERS BY

PRODUCT OFFERING

Major Formsof

NonstoreRetailing

Automatic Vending

Direct Marketing

Electronic Retailing

NON-STORE RETAILING

Telemarketing

Catalogs & Mail Order

Direct Mail

DirectMarketing needs

no personal interaction

DirectMarketing needs

no personal interaction

DIRECT MARKETING

Choosing the Retailing Mix

Product

Price

Promotion

Place

Personnel

Presentation

CHOOSING THE RETAIL MIX

TargetMarket

Product

Price

Promotion

Place

Personnel

Presentation

CHOOSING THE RETAIL MIX

Employee Type & Density

Merchandise Type & Density

Fixture Type & Density

Sound

Odors

Visual Factors

Factors in

CreatingStore’s

Atmosphere

PRESENTATION (COMMUNICATION) OF

THE RETAIL STORE

How many

How knowledgeable

How helpful / invasive

Fit the image of the product

Good personal sellers

Factors in

Personnel decisions

PERSONNEL OF THE RETAIL STORE

RETAILING STRATEGY-PRICING

� Use Everyday Low Pricing

� Benchmark or Signpost Items –

items used by consumers as an index

of overall price level of the store

I.e. – “How much do they sell T shirts for?”

� Allow for Shrinkage and discounting

OR

� How much mark-up?

RETAILING STRATEGY - LOCATION

� Central Business District

� Regional Shopping Centers

� Strip Location

� Multichannel Retailers

• Anchor Stores

Freestanding Store

Shopping Center Tenant

Mall Tenant

• Parasites

• Destination stores

• Power centers

FIGURE 14-5 The retail life cycle

Scrambled Merchandising

Scrambled merchandising involves

offering several unrelated product lines in

a single store.

Retailing Mix

The retailing mix includes the activities

related to managing the store and the

merchandise in the store, which includes

retail pricing, store location, retail

communication, and merchandise.

Shrinkage

Shrinkage is the breakage and theft of

merchandise by customers and

employees.

Multichannel Retailers

Multichannel retailers utilize and

integrate a combination of traditional

store formats and nonstore formats such

as catalogs, television, and online

retailing.

Retail Life Cycle

The retail life cycle is the process of

growth and decline that retail outlets, like

products, experience, which consists of

the early growth, accelerated

development, maturity, and decline

stages.

Parasites

Parasite stores do not create their own

traffic. They make money based on

their proximity to things that will draw

foot traffic. (bigger stores, train

stations, airports, office buildings, etc.)

Destination Stores

Stores that generate customers from larger

trading areas than their neighbors or

competitors.

i.e.-Dunkin’ Donuts: “It’s worth the trip!”

Power Centers

Huge shopping strips with multiple

anchors and often a supermarket

Anchor Stores

A large store, such as a department store or

supermarket, that is prominently located in

a shopping mall to attract customers who

are then expected to patronize the other

shops in the mall.