1. Basic Marketing – Chapter 13 Supplementary PowerPoint Archive This is an archive of photos and exhibits from the text and additional graphics and exhibits as referenced in the Basic Marketing Multimedia Lecture Guides. See the Basic Marketing Multimedia Lecture Support Package for additional detail and teaching suggestions. For use only with Perreault/Cannon/McCarthy. These images may not be redistributed or used for any other purpose without permission of the publisher, McGraw- Hill/Irwin, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Best Buy opening photo 13-2

3. Exhibit 13-1: Marketing Strategy Planning for Retailers and Wholesalers 13-3

4. Lands’ End ad and Lands’ End website screenshot 13-4

5. Exhibit 13-2: Types of Retailers and the Nature of Their Offerings 13-5

6. Office Depot (category killer) photo 13-6

7. Pay by Touch and BioPay photos 13-7

8. GlaxoSmithKlin e and 1800PetMeds.co m ads 13-8

9. Best Buy and Home Theater Direct websites 13-9

10. Best Buy website 13-10

11. Home Theater Direct website 13-11

12. Exhibit 13-3: Retailer Life Cycles―Timing and Years to Market Maturity 13-12

13. Ace Hardware ads 13-13

14. Migros ad 13-14

15. Freda’s photo 13-15

16. Exhibit 13-4: U.S. Wholesale Trade by Type of Wholesale Operation 13-16

17. Exhibit 13-5: Types of Wholesalers 13-17

18. Lightech ad 13-18

19. Auto body repair specialty wholesaler photo 13-19

20. eBay Wholesale Lots website 13-20

21. Retailing  Activities involved in the sale of products to final consumers  Consumers buy about $4.5 trillion a year from retailers  Retailers must develop their own strategy  Retailers are part of an overall channel system  Retailing is changing rapidly 13-21

22. 4-Part Collage of Retailing in Different Countries 13-22

23. Examples of Factors that Influence a Consumer’s Choice of a Retailer  Convenience  Variety of selection  Quality of products  Help from salespeople  Reputation  Price  Services offered  … all combine to impact the customer value offered 13-23

24. Features of Retailer’s Offering Relate to Needs  Economic needs  Convenience  Product selection  Special services  Fairness in dealings  Helpful information  Prices  Social and emotional needs  Social image  Shopping atmosphere 13-24

25. Mass-Merchandising Concept  Retailers should offer low prices to get faster turnover and greater sales volume—by appealing to larger markets  Started with supermarkets in 1930s  Really caught on with mass-merchandisers  large stores  self-service oriented  Examples: Wal-Mart, Target  Competition among mass-merchandisers has heated up  Limited-line mass-merchandisers (category killers) grew rapidly, but growth has subsided 13-25

26. Self-service supermarket scanner and Mobil Speed Pass photo 13-26

27. Retailing and the Internet  Growing fast, but still in very early stages  Convenience not defined by location of product assortment  More information of some types but not others  More technical detail  Less touch and feel  Generally requires more advance planning  Delivery takes time and adds costs  Competitive effects impact other retailers  New types of specialists and intermediaries will continue to develop 13-27

28. Some Illustrative Differences between Online and In-Store Shopping 13-28

29. A Three-Dimensional View of the Market for Retail Facilities and the Probable Position of Some Present Offerings 13-29

30. Examples of Scrambled Merchandising  Videotapes and DVDs at grocery stores  Microwave popcorn at video rental stores  Computer software at bookstores  Clothing and fashion accessories at a motorcycle dealership  One-hour prints from digital pictures at drugstores 13-30

31. Illustrative Gross Margins in Selected Retail Trades for Recent Years Type of retail businessGross margin percent Custom tailors, monuments, florists and nurseries, bakery shops, furs 50% or more Garages, jewelry, restaurants, furniture, undertaking 40-50% Instruments, furnishings, gifts, books, bars, shoes, appliances 35-40% Paint, glass, drugs, fuel, clothing, auto parts30-35% Hardware, dry goods20-30% Alcoholic beverage package stores, motor vehicles, groceries Less than 20% 13-31

32. Retailer Size and Profits  Large retail stores do most of the business  Only about 11% of stores sell over $5 million annually but they account for almost 70% of retail sales  Yet, some small retailers control their market  Larger stores enjoy economies of scale  Corporate chain stores also enjoy economies of scale  Account for about half of all retail sales (and much higher in some product categories)  Continuing to grow  Independent retailers form chains  Cooperative chains are retailer sponsored  Voluntary chains are wholesaler sponsored 13-32

33. Lowe’s ad 13-33

34. Examples of Some Well-Known Franchise Operations 13-34

35. Franchise Operations  The franchiser develops a good marketing strategy and the retail franchise holders carry out the strategy in their own units.  Strong legal contracts govern the relationship.  Franchisers have been successful with newcomers.  especially popular with service operations  Franchise sales account for about half of all retail sales. 13-35

36. Location of Retail Facilities  Individual store locations  Downtown central business district  Unplanned shopping strips  Neighborhood shopping center  Community shopping center  Regional shopping center  Discount malls  Cyberspace! 13-36

37. Some Trends in Retailing  Growth of Internet merchants and online retailing  Electronic retailing (kiosks, TV, etc.)  In-home shopping (catalogs, etc.)  More price competition  Vertical integration  More chains and franchises  chains becoming larger, more powerful  More and better information (for example, scanner data) 13-37

38. Trends in Wholesaling  Fewer, but larger, wholesalers  Use of computers to control inventory, order processing  Closer relationships with customers  More selective in picking customers 13-38

39. What a Wholesaler Might Do for Customers  Regroup products—to provide quantity and assortment customers need  Anticipate customers' needs—and buy accordingly  Carry products in inventory—which helps reduce customers' inventory costs  Deliver products promptly and economically  Grant credit  Provide information and advice  Provide part of the buying function—make it easy for customers to buy what they want 13-39

40. What a Wholesaler Might Do for Producer- Suppliers  Provide part of the selling function  Store inventory (cut producer's warehousing costs)  Supply capital (by purchasing producer's output before it is sold to final customers)  Reduce credit risks  Provide marketing information 13-40

41. Wholesalers Provide Economies of Scale in Transporting and Storing 13-41

42. Manufacturer’s Sale Branches  Separate business that producers set up away from their factories to handle wholesaling functions.  Represent only about 4.3 percent of all wholesalers  Handle 28.4 percent of total wholesale sales  Sales high because they are placed in best markets  True operating costs may be difficult to determine 13-42

43. Merchant Wholesalers  Take title to (own) the products they sell  About 88.3% of wholesalers are merchant wholesalers  Handle about 61.2% of total wholesale sales  Two basic types:  Full-service wholesalers  Limited-function wholesalers 13-43

44. Merchant wholesalers in Africa and modern wholesaling in U.S. photos 13-44

45. Full-Service Merchant Wholesalers  Provide all of the wholesaling functions  Three major types:  General merchandise wholesalers  Single-line (or general-line) wholesalers  Specialty wholesalers 13-45

46. Some Limited-Function Merchant Wholesalers  Cash and carry wholesalers  Drop-shippers  Truck wholesalers  Rack jobbers  Catalog wholesalers 13-46

47. Functions Provided by Different Types of Limited-Function Merchant Wholesalers 13-47

48. Orchard Network website 13-48

49. Agent Wholesalers  Wholesalers who do not own the products they sell  Main purpose is to help with buying and selling  Usually operate at relatively low cost  Usually provide fewer functions than merchant wholesalers  Often specialize not only by product-type, but also by customer type 13-49

50. Functions Provided by Different Types of Agent Wholesalers 13-50

51. Manufacturers’ Agents  Sell similar products for several noncompeting producers  Work on a commission basis  Basically are independent, aggressive sales reps  Especially helpful to small producers and producers whose customers are very spread out 13-51

52. Brokers  Main purpose is to bring buyers and sellers together  Usually have a temporary relationship with buyer and seller while the deal is negotiated  Earn a commission—from either the buyer or seller— depending on who hired them  Especially common with seasonal products and products sold infrequently 13-52