1. Copyright © 2005 Pearson Education Inc. Retailing and Wholesaling Chapter 14 PowerPoint slides Express version Instructor name Course name School name Date Principles of Marketing, Sixth Canadian Edition

2. Copyright © 2005 Pearson Education Inc. Principles of Marketing, Sixth Canadian Edition 14.2 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

3. Copyright © 2005 Pearson Education Inc. Principles of Marketing, Sixth Canadian Edition 14.3 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

4. Copyright © 2005 Pearson Education Inc. Principles of Marketing, Sixth Canadian Edition 14.4 Types of Retailers Amount of service offered: –Self-service retailers –Limited-service retailers –Full-service retailers Relative prices charged: –Discount stores –Off-price retailers: Independents Factory outlets Warehouse clubs Products lines: Specialty stores Department stores Supermarkets Convenience stores Discount stores Off-price retailers Superstores

5. Copyright © 2005 Pearson Education Inc. Principles of Marketing, Sixth Canadian Edition 14.5 Types of Retailers (continued) Retail organizations: –Corporate chains –Voluntary chains –Retailer cooperatives –Franchise organizations –Merchandising conglomerates 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

6. Copyright © 2005 Pearson Education Inc. Principles of Marketing, Sixth Canadian Edition 14.6 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

7. Copyright © 2005 Pearson Education Inc. Principles of Marketing, Sixth Canadian Edition 14.7 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 centres Regional Neighbourhood –Power centres Figure 14.1

8. Copyright © 2005 Pearson Education Inc. Principles of Marketing, Sixth Canadian Edition 14.8 Future of Retailing Wheel of retailing concept: –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 megaretailers –Importance of technology –Global expansion –Retail stores as communities

9. Copyright © 2005 Pearson Education Inc. Principles of Marketing, Sixth Canadian Edition 14.9 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

10. Copyright © 2005 Pearson Education Inc. Principles of Marketing, Sixth Canadian Edition 14.10 Types of Wholesalers Merchant wholesalers: –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

11. Copyright © 2005 Pearson Education Inc. Principles of Marketing, Sixth Canadian Edition 14.11 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 Product lines carried are chosen for profitability Price competition squeezes gross margins to very low Not promotion -minded Locations are more industrial Figure 14.2

12. Copyright © 2005 Pearson Education Inc. Principles of Marketing, Sixth Canadian Edition 14.12 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

13. Copyright © 2005 Pearson Education Inc. Principles of Marketing, Sixth Canadian Edition 14.13 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