1. Retailing and Wholesaling
Chapter 14
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Principles of Marketing, Sixth Canadian Edition

2. Learning Objectives
After studying this chapter, you should be able to:
Explain the roles of retailers and wholesalers in the marketing channel
Describe the major types of retailers and give examples of each
Identify the major types of wholesalers and give examples of each
Explain the marketing decisions facing retailers and wholesalers
Principles of Marketing, Sixth Canadian Edition

3. Retailing
Retailing: all activities involved in selling goods or services directly to final consumers for their personal, non-business use
Retailing can take place in stores and non-store environments
Retailers can be classified based on:
Amount of service offered
Depth of products lines
Relative prices charged
How they are organized
Principles of Marketing, Sixth Canadian Edition

4. Types of Retailers Amount of service offered: Products lines:
Self-service retailers
Limited-service retailers
Full-service retailers
Products lines:
Specialty stores
Department stores
Supermarkets
Convenience stores
Discount stores
Off-price retailers
Superstores
Relative prices charged:
Discount stores
Off-price retailers:
Independents
Factory outlets
Warehouse clubs
Principles of Marketing, Sixth Canadian Edition

5. Types of Retailers (continued)
Retail organizations:
Corporate chains
Voluntary chains
Retailer cooperatives
Franchises: contractual association between two businesses, having three characteristics:
The franchiser owns a trade or service mark, and licenses it for use for royalties
Franchisees must pay to be part of the system
Franchisers provide a packaged marketing and operations system
Franchise organizations
Merchandising conglomerates
Principles of Marketing, Sixth Canadian Edition

6. Retailer Marketing Decisions
Target markets chosen will affect all other decisions
Markets chosen and positioning need to be clear
Cannot hope to be “something for everyone”
Product variables:
Assortment
Services mix
Atmospherics
Price decision:
Markups and volume are inversely related
Figure 14.1
Principles of Marketing, Sixth Canadian Edition

7. Retailer Marketing Decisions (continued)
Promotion: retailers will use all five tools to promote themselves
Advertising, personal selling, sales promotion, public relations, and direct marketing
Place decision:
Location is critical to attract the target market
Central business districts
Shopping Centre's
Regional
Neighborhood
Power Centre's
Figure 14.1
Principles of Marketing, Sixth Canadian Edition

8. Future of Retailing Wheel of retailing concept: Other trends:
New types of retailers begin as low-margin, low-price, and low-status operations, but
Evolve into higher-priced, higher-service operations,
Eventually becoming like the conventional retailers they replaced
Other trends:
Growth of non-store retailing
Retailer convergence
Rise of mega retailers
Importance of technology
Global expansion
Retail stores as communities
Principles of Marketing, Sixth Canadian Edition

9. Wholesaling
Wholesaling: all activities involved in selling goods and services to those buying for resale or business use
Buy mostly from producers and resell to retailers, industrial consumers and other wholesalers
Perform some or all of the following functions:
Selling and promoting
Buying and assortment building
Bulk breaking
Warehousing
Transportation
Financing
Risk bearing
Market information
Management services and advice
Principles of Marketing, Sixth Canadian Edition

10. Types of Wholesalers Merchant wholesalers: Brokers and agents:
Full-service wholesalers
Wholesale merchants
Industrial distributors
Limited service wholesalers:
Cash-and-carry wholesalers
Truck jobbers
Drop shippers
Rack jobbers
Producers’ cooperatives
Mail-order wholesalers
Brokers and agents:
Brokers
Agents:
Manufacturer’s agents
Selling agents
Purchasing agents
Commission merchants
Manufacturers’ sales branches and offices
Purchasing offices
Principles of Marketing, Sixth Canadian Edition

11. Wholesaler Marketing Decisions
Wholesalers are challenged by increased competition, demanding customers, new technologies, and more direct-buying by large customers
Must choose target markets carefully, looking for more profitable customers to build relationships with
Figure 14.2
Product lines carried are chosen for profitability
Price competition squeezes gross margins to very low
Not promotion-minded
Locations are more industrial
Principles of Marketing, Sixth Canadian Edition

12. Trends in Wholesaling Fierce resistance to price increases
Consolidation of suppliers
Survival tactics:
Focusing on adding value
Achieving cost efficiencies
Looking for opportunities to partner with suppliers and customers
Differentiate by services offered
Global orientation
Principles of Marketing, Sixth Canadian Edition

13. In Conclusion… The learning objectives for this chapter were:
Explain the roles of retailers and wholesalers in the marketing channel
Describe the major types of retailers and give examples of each
Identify the major types of wholesalers and give examples of each
Explain the marketing decisions facing retailers and wholesalers
Principles of Marketing, Sixth Canadian Edition