1. Managing Retailing, Wholesaling, And Logistics

2. Retailers - businesses whose sales come primarily from retailing.
What is Retailing?
All the activities involved in selling goods or services
directly to final consumers for their personal, nonbusiness use.
Retailers - businesses whose sales come primarily from retailing.
Retailers can be classified as:
Store retailers such as Home Depot, Sears, Walmart
Nonstore retailers such as the mail, telephone, and Internet.

3. Classification of Retail Stores
Amount of Service
Self-Service, Limited-Service and
Full-Service Retailers
Product Line
Length and Breadth of the Product
Assortment
Classification of Retail Stores
Relative Prices
Pricing Structure that is Used
by the Retailer
Retail Organizations
Independent, Corporate, or Contractual
Ownership Organization

4. Types of Retailers Amount of service
Self service retailers:
serve customers who are willing to perform their own process to save time or money such as supermarkets.

5. Types of Retailers Amount of service
 Limited service retailers:
such as Sears provide more sales assistance because they carry more shopping goods about which customers need information. Their increased operating costs result in higher prices

6. Types of Retailers Amount of service
 Full service retailers :
salespeople assist customers in every phase of the shopping process. Full service stores usually carry more specialty goods for which customers need or want assistance or advice.
*Result in higher operating costs ,
which is passed along to customers as higher prices.

7. Classification By Product Line
Length and Breadth of Assortment
Store Type Product
Specialty Stores
Narrow Product Line, Deep Assortment
Department Stores
Wide Variety of Product Lines i.e. Clothing, Home Furnishings, & Household Items
Supermarkets
Wide Variety of Food, Laundry, & Household Products
Convenience Stores
Limited Line of High-Turnover Convenience Goods
Superstores
Large Assortment of Routinely Purchased Food & Nonfood Products, Plus Services
Category Killers
Giant Specialty Store that Carries a Very Deep Assortment of a Particular Line
Hypermarkets
Huge Superstores

8. Department Store Model: The Showcase Store

10. Types of Retailers Relative Prices
Retailing
Types of Retailers Relative Prices
Discount stores
Off-price retailers
Factory outlets
Warehouse clubs

11. Relative prices Discount store:
a retail operation that sells standard merchandise at lower
prices by accepting low margins and selling at higher volume.
 Off price retailer:
a retailer that buys at less than regular wholesale prices
and sells at less than retail
The three main types of the off price retailers are independents, factory outlets and warehouse divisions of larger retail corporations

12. Off price retailer Independent off price retailer:
an off price retailer that is either independently owned
and run or is a division of a larger retail corporation.
 Factory outlet:
which is owned and operated by a manufacturer and that
normally carries the manufacturer’s surplus, discontinued or
irregular goods.
 Warehouse club:
which sells a limited selection of brand name grocery items, clothing or other goods at deep discounts to members who pay annual membership fees

13. Types of Retailers Organizational Approach
Merchandising
Conglomerates
Corporate
Chains
Franchise
Organizations
Voluntary
Chains
Retail Organizations
Retailer
Cooperatives

14. Types of Retailers Organizational Approach
Corporate chains are two or more outlets that are commonly owned and controlled
Size allows them to buy in large quantities at lower prices and gain promotional economies
selling similar lines of merchandise, highly skilled employees.
Sears
 Voluntary chains are wholesale-sponsored groups of independent retailers that engage in group buying and common merchandising
IGA
Western Auto

15. Types of Retailers Organizational Approach
Retailer cooperatives is a group of independent retailers that band together
to set up a joint-owned, central wholesale operation and conduct joint merchandising and promotion effort
Ace Hardware
Associated Grocers

16. Types of Retailers Organizational Approach
 Franchise organizations are based on some unique product or service; on
a method of doing business; or on the trade name, good will, or patent that the franchisor has developed
Contractual association between franchiser (manufacturers, wholesalers, service organizations) and franchisee who are authorized to use the brand name. McDonalds ….

17. Types of Retailers Organizational Approach
 Merchandising conglomerates are corporations that combine several retailing forms under central ownership
Limited Brands
Several diversified retailing lines with integration in management and distribution.

18. Corporate Retail Organizations
Features of corporate retailing
1-Greater purchasing power
2-Achieve economies of scale
3-Wider brand recognition
4-Better trained employees

19. Types of NonStore Retailing
Nonstore Retailing Accounts for More Than 14% of All Consumer Purchases , and May Account for 33% of All Sales by 2000.
Direct Marketing
Direct Selling
Automatic Vending
Catalogs & Direct Mail
TV Shopping Shows
Online Shopping
Home & Office Parties

20. Characteristics of Direct Marketing
Key
Characteristics of
Direct
Marketing
Immediate
Orders
Response
Measurement
Targeted
Individuals
Privacy
Customized
Offer
Continuous
Relationship
Higher
Testing

21. Create Value for Targeted Retail Customers
Retailer Marketing Decisions
Retailer Strategy
Retailer Marketing
Mix
-Product and Service Assortment
-Retail Prices
-Promotion
-Place (Location)
Target Market
Retail Store Positioning
Create Value for Targeted Retail Customers

22. Retailer’s Product Assortment and Services Decisions
Product Assortment Decisions
-Width and Depth of Assortment
-Quality of Products
-Product Differentiation Strategies
Retailer’s Product Assortment and Services Decisions
Services Mix
Key Tool of Nonprice Competition
for Setting One Store Apart From
Another.
Store’s Atmosphere
Physical Layout
“Feel” That Suits the Target Market
and Moves Customers to Buy

23. Postpurchase services
Retailer Services Mix
Prepurchase services
Postpurchase services
Ancillary services

24. Retailer’s Price, Promotion, and Product & Services Assortment
Click to add title
Retailer’s Price, Promotion, and
Place Decisions
Price Decisions
Target Market
Product & Services Assortment
Competition
Promotion Decisions
Using Advertising, Personal Selling, Sales Promotion and Public Relations to Reach Customers.
Place Decisions
Shopping Centers, Central Business Districts, Power Centers, or Outlet Malls. Location!

25. Location Decision * General business districts
* Regional shopping centers
* Community shopping centers
* Strip malls
* Location within a larger store

26. Number of people passing by
Indicators of Sales Effectiveness
Number of people passing by
% who enter store
% of those who buy
Average amount
spent per sale

27. Wall Mart’s Factors of Success:
1-Listen to the customers.
2-Treat employees as partners.
3-Big sign reading (Satisfaction guaranteed), (we sell for less).
5-Customers often welcome by greeter
6-Low price and speed stock replenishment.
7-Expanded their stories outside of US

28. The Future of Retailing
New Retail Forms and Shortening
Retail Lifecycles
Growth of Nonstore Retailing
Increasing Intertype Competition
The Future of Retailing
Rise of Megaretailers
Growing Importance of
Retail Technology
Global Expansion of Major Retailers

29. Trends in Retailing  New retail forms has been emerged.
 New retailers are facing shorter life span, they are rapidly copied and lose novelty. It is familiar in our areas.
Growth of non store retailing.
 Competition is increasing between different types of stores, like Discount stores, Catalog showrooms, Department stores. All are competing the same customers.
 All retailers now moving to one of 2 poles, either mass merchandiser, or as specialty retailer. Super power retailers emerging.

30. Trends in Retailing cont.
Department stores - one stop shopping convenience. Gradually they gave up to Malls where customers can find every thing.
Technology became critical, Retailers using computers to manage better Inventory, Ordering, etc..
Retailers with unique formats and strong positioning are moving to other countries, Like
McDonalds. 18% of US retailers moved out, 40% of Europeans, and 31% of Far East.

31. Buying assortment building Management services and advice
Wholesaling
Wholesaling includes all activities involved in selling goods and services to those buying for resale or business use
Selling and promoting
Buying assortment building
Bulk breaking
Warehousing
Transportation
Financing
Risk bearing
Market information
Management services and advice

32. Wholesaling Selling and promoting
involves the wholesaler’s sales force helping the manufacturer reach many smaller customers at lower cost
Buying assortment
building involves the selection of items and building of assortments needed by their customers, saving the customers work
Bulk breaking
involves the wholesaler buying in larger quantity and breaking into smaller lots for its customers
Warehousing
involves the wholesaler holding inventory, reducing its customers’ inventory cost and risk

33. Wholesaling
Transportation
involves the wholesaler providing quick delivery due to its proximity
to the buyer
Financing
involves the wholesaler providing credit and financing suppliers by ordering earlier and paying on time
Risk bearing
involves the wholesaler absorbing risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence
Market information
involves the wholesaler providing information to suppliers and customers about competitors, new products, and price developments

34. Wholesaling
Management services and advice involves wholesalers helping retailers train their sales clerks, improve store layouts, and set up accounting and inventory control systems

35. They Don’t Take Title to Wholesaling by Sellers
Types of Wholesalers
Brokers/ Agents
They Don’t Take Title to
the Goods, and They
Perform Only a Few
Functions.
Merchant
Wholesaler
Independently Owned
Business that Takes
Title to the
Merchandise
it Handles.
Manufacturers’
Sales Branches
and Offices
Wholesaling by Sellers
or Buyers Themselves
Rather Than Through
Independent
Wholesalers.

36. Types of Wholesalers Merchant wholesalers
is the largest group of wholesalers and include:
Full-service wholesalers who provide a full set of services
 Limited service wholesalers who provide few
services and specialized functions

37. Types of Wholesalers
Brokers and agents do not take title, perform a few functions,
and specialize by product line or customer type
Brokers bring buyers and sellers together and assist in negotiations
Agents represent buyers or sellers
Manufacturers’ sales branches and offices is a form of wholesaling
by sellers or buyers themselves rather than through
independent wholesalers

38. Wholesaler Marketing Decisions
Wholesaling
Wholesaler Marketing Decisions

39. Trends in Wholesaling Must Learn to Compete Effectively Over
Wider and More Diverse Areas
Increasing Consolidations Will Reduce
Number of Wholesalers
Trends in Wholesaling
Wholesaling Developments to Consider
Surviving Wholesalers Will Grow Larger
Through Acquisitions and Mergers
Vertical Integration Will Remain Strong
Global Expansion

40. Wholesaler Marketing Decisions
Wholesaling
Wholesaler Marketing Decisions
1-Target market and positioning decisions
2-Size of customer
3-Type of customer
4-Need for service

41. Wholesaler Marketing Decisions
Wholesaling
Wholesaler Marketing Decisions

42. Trends in Wholesaling  Resistance to price increases
Challenges
 Resistance to price increases
 Lack of suppliers
 Changing customer needs
 Adding value by increasing efficiency and effectiveness

43. Market logistics
*It involves, Planning, Implementing, and controlling the physical flow of materials and final goods till from points of origin to points of use.
* Market logistics starts from the point of sales forecasting which planning for other activities depend on such as scheduling distribution, production and inventory levels.

44. Market-logistics objectives
Getting the right goods to the right places at the right time for the least cost.

45. Organizational Lessons about Marketing Logistics:
1-Market logistics decisions must be based on profit maximizing rather than cost consideration
2-Electronic links among all parties should be established
3-Logistics goals should match or exceed competitors’ service standards.

46. Each market system will lead to the following costs.
M = T+FW+VW+S
M = Total market – logistics cost of proposed system
T = Total freight cost of proposed system
FW = Total fixed warehouse cost of proposed system
VW = Total variable Warehouse cost (include inventory).
S = Total cost of lost sales due to average delivery delay under proposed system.

47. •Order Processing “system of ordering”
Market Logistic Decisions
Four major decision must be made:
•Order Processing “system of ordering”
• Warehousing ”where should stocks be located”
• Inventory “how much stock should be held”
• Transportation “how should goods be shipped”

48. Organizational Lessons about Marketing Logistics:
Market logistics decisions must be based on profit maximizing rather than cost consideration
 Electronic links among all parties should be established
 Logistics goals should match or exceed competitors’ service standards.

49. Market Logistics Decisions
1-How should orders be handled?
2-Where should stock be located?
3-How much stock should be held?
4-How should goods be shipped?