1. Copyright © Houghton Mifflin Company. All rights reserved. 15–1 Retailing Transactions in which ultimate consumers are the buyers Retailers –Organizations that purchase products for the purpose of reselling them to ultimate consumers Retailers add value—shopping convenience, services, and purchasing assistance to customers Retailers create utility—time, place, possession, and form

2. Copyright © Houghton Mifflin Company. All rights reserved. 15–2 Table 15.1

3. Copyright © Houghton Mifflin Company. All rights reserved. 15–3 General-Merchandise Retailers Offer a variety of product lines Department Stores –Large retail organizations characterized by wide product mixes and organized into separate departments to facilitate marketing efforts and internal management Discount Stores –Self-service, general merchandise stores offering brand name and private brand products at low prices Supermarkets –Large, self-service stores that carry a complete line of food products, along with some nonfood products

4. Copyright © Houghton Mifflin Company. All rights reserved. 15–4 General-Merchandise Retailers (cont’d) Superstores –Giant retail outlets that carry food and nonfood products found in supermarkets, as well as most routinely purchased consumer products Hypermarkets –Stores that combine supermarket and discount shopping in one location Warehouse Clubs –Large-scale, members-only establishments that combine features of cash-and-carry wholesaling with discount retailing

5. Copyright © Houghton Mifflin Company. All rights reserved. 15–5 General-Merchandise Retailers (cont’d) Warehouse Showrooms –Retail facilities in large, low-cost buildings with large, on-premise inventories and minimal services Catalog Showrooms –A form of warehouse showroom where consumers can shop from a catalog and products are stored out of buyers’ reach

6. Copyright © Houghton Mifflin Company. All rights reserved. 15–6 Specialty Retailers Traditional Specialty Retailers –Carry a narrow product mix with deep product lines (e.g., pet supplies) –Also called “limited-line” and “single-line” retailers –Have higher costs and higher margins –Provide more product selection (first-line brands), product expertise, and high levels of personal service

7. Copyright © Houghton Mifflin Company. All rights reserved. 15–7 Specialty Retailers (cont’d) Category Killers –Concentrate on a major product category and compete on the basis of low prices and product availability Off-Price Retailers –Buy manufacturers’ seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts –Charge less than do department stores for comparable merchandise and offer few customer services –Have established long-term relationships with suppliers for continuing supplies of reduced-price goods

8. Copyright © Houghton Mifflin Company. All rights reserved. 15–8 Strategic Issues in Retailing Retail Store Location –Factors affecting location Intended target market Kinds of products Suitability of site for customer access Characteristics of existing retail operations Types of Locations –Free-standing structures –Shopping malls and centers –Traditional business districts

9. Copyright © Houghton Mifflin Company. All rights reserved. 15–9 Types of Traditional Shopping Centers Neighborhood Shopping Centers –Usually consist of several small convenience and specialty stores Community Shopping Centers –Include one or more department stores (anchors), some specialty stores, and convenience stores Regional Shopping Centers –Have the largest department stores, the widest product mix, and the deepest product lines of all shopping centers

10. Copyright © Houghton Mifflin Company. All rights reserved. 15–10 Types of Nontraditional Shopping Centers Factory Outlet Malls –Shopping centers that feature discount and factory outlet stores carrying traditional brand name products Miniwarehouse Mall –Loosely planned centers that lease space to retailers running retail stores out of warehouse bays Nonanchored Malls –Do not have traditional department store anchors; instead combine off-price and category killer stores in a “power center” format

11. Copyright © Houghton Mifflin Company. All rights reserved. 15–11 Strategic Issues in Retailing Retail Positioning –Identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment Store Image –Atmospherics The physical elements in a store’s design that appeal to consumers’ emotions and encourage buying Interior layout, colors, furnishings, and lighting Exterior storefront and entrance design, display windows, and traffic congestion

12. Copyright © Houghton Mifflin Company. All rights reserved. 15–12 Wholesaling Transactions in which products are bought for resale, for making other products, or for general business operations Wholesaler –An individual or organization that facilitates and expedites wholesale transactions Handles the physical distribution of goods Furnishes channel information to facilitate and manage the supply channel

13. Copyright © Houghton Mifflin Company. All rights reserved. 15–13 Major Wholesaling Functions Supply-Chain Management Promotion Warehousing, Shipping, and Product Handling Inventory Control and Data Processing Risk Taking Financing and Budgeting Marketing Research and Information Systems

14. Copyright © Houghton Mifflin Company. All rights reserved. 15–14 Services Provided by Wholesalers Serve as an extension of the producer’s sales force through contact with suppliers and retailers Lend financial assistance for the distribution channel Transport and warehouse inventories Assume credit risks of buyers/customers Purchase producers’ entire output: convert producer’s output immediately to working capital Channel information from and to sellers and buyers

15. Copyright © Houghton Mifflin Company. All rights reserved. 15–15 Types of Wholesalers Merchant Wholesalers –Independently owned businesses that take title to goods, assume ownership risks, and buy and resell products to other wholesalers, business customers, or retailers Provide market coverage Make sales contacts Store inventory Handle orders Collect market information Furnish customer support

16. Copyright © Houghton Mifflin Company. All rights reserved. 15–16 Types of Wholesalers Manufacturers’ Sales Branches and Offices –Sales branches Manufacturer-owned intermediaries that sell products and provide support services to the manufacturer’s sales force –Sales offices Manufacturer-owned operations that provide services normally associated with agents