Managing Retailing, Wholesaling and Logistics Chapter 16

Four Themes Retailing Private Labels Wholesaling 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

Types of Retailers Level of Service * Self-Service Corporate Retailing * Self-Selection * Limited Service * Full Service Corporate Retailing organizations achieve economies of scale, greater purchasing power, wider brand recognition, and better trained employees. Non-store retailing falls into four major categories: direct selling; direct marketing; automatic vending and buying services

New Model for Success Two models for department store to be successful: Strong Retail Brand Approach in-house brands feature strongly and managers take an active roll in choosing inventory The Showcase Store not 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 Decision Retailers 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 Deciding on the company’s value preposition to its customers. Deciding on the best channel design and network strategy for reaching the customer Developing operational excellence in sales forecasting, warehouse management, transportation management, and materials management Implementing the solution with the best information system, equipment, policies and procedures

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

Market Logistics 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 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

Organizational Lessons Companies should appoint a senior vice president of logistics to be the singles point of contact for all logistical elements The senior vice president of logistics should hold periodic meetings (weekly, biweekly) New software and systems are the key to achieving competitively superior logistics performance in the future

Group Task Go to Matahari, Centro, Grand Palace, Sogo, Metro Analyze the differences of each Department Store (e.g. target market, style, price)

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