1. Marketing Intermediary  A business firm that operates between producers and consumers or business users, also called a middleman.  May be a wholesaler, retailer, or facilitating intermediary.

2.  Activities involved in selling goods and services to ultimate consumers Retailing © PhotoDisc

3.  Activities involved in selling goods and services to ultimate consumers Wholesaler Retailing  An intermediary that handles the redistributes of goods to retailers, other distributors, and sometimes end consumers © PhotoDisc

4.  Activities involved in selling goods and services to ultimate consumers Wholesaler Retailing  An intermediary that takes title to the goods it handles and redistributes them to retailers, other distributors, and sometimes end consumers Direct Marketing  A distribution channel consisting of direct communication to a consumer or business recipient

5. Figure 14.2: Major Types of Wholesaling Intermediaries

6. Types of Wholesaling Intermediaries  Sales branch: carries inventory and processes orders from available stock  Sales office: serves as a regional office for for manufacturer’s sales personnel, but does not carry an inventory Manufacturer- Owned Facilities Square D

7. Types of Wholesaling Intermediaries  Trade fair: Periodic show in which manufacturers in a particular industry display their products and services for wholesale and retail buyers  Merchandise mart: A permanent facility in which manufacturers display products for visiting wholesale buyers Manufacturer- Owned Facilities Americas Mart

8. Types of Wholesaling Intermediaries  Merchant wholesaler: An independently owned intermediary that takes title to the goods it sells  Merchant wholesalers include:  Rack Jobbers  Cash-and-Carry Wholesalers  Truck Wholesalers  Drop Shippers  Mail Order Wholesalers Independent Wholesaling Intermediaries

9. Types of Wholesaling Intermediaries  Agents and Brokers: A second group of independent intermediaries who may or may not take possession of the goods, but never take title. They include:  Commission merchants  Auction houses  Brokers  Selling agents  Manufacturer’s agents Independent Wholesaling Intermediaries

10. Types of Wholesaling Intermediaries  Manufacturers’ agent: A wholesaling intermediary who represents multiple manufacturers of related, but noncompeting products  Work on a commission basis and are assigned to geographic territories Independent Wholesaling Intermediaries

11. Fundamental Retail Challenges: Shelf Space  Stockkeeping unit (SKU): specific product offering within a product line that is used to identify items within the line  Slotting allowances: fees paid by manufacturers to secure shelf space from retailers for their products  Assortment Management: selecting the right mix of products and product lines to meet target market.

12. Types of Retailers  Retailers can be categorized by:  Form of ownership  Shopping effort by customer  Services provided to customers  Product lines  Location of retail transactions

13.  Classifying by Product Lines  Classifying by Product Lines: This classification system groups stores by the product lines they carry.  Limited-line store  Limited-line store: A retailer that offers a large assortment within a single product line, or within a few related product lines Examples include IKEA home furnishings and Ethan Allen furniture  Category killers: retailers that combine huge selection and low prices within a single product category Home Depot and Staples are examples

14.  Department store  Department store: large store that offers a variety of merchandise, such as men’s and women’s clothing, appliances, linens, and furniture  Mass merchandiser  Mass merchandiser: store that stocks a wider line of goods than a department store, usually without the same depth of assortment within each line  Supercenters  Supercenters: Large stores, though still smaller than hypermarkets, that combine discount store merchandise and groceries  Off-price retailers  Off-price retailers: Stores that find exceptional deals on well-known, brand-name clothing and resells them at low prices

15.  Classification of Retailers by Form of Ownership  Chain stores: Groups of stores that operate under central ownership and management and sell essentially the same product lines Chain stores have the advantages of purchasing and advertising economies of scale  Independent Retailers: account for about 43% of all retail sales Advantage of friendly, personalized service  Cooperatives: Groups of independent retailers who band together to increase buying and advertising power

16.  Ace Hardware  Cooperatives like Ace help independent retailers compete with chains

17.  Classification by Shopping Effort  Classification by Shopping Effort: Classification system based on the reasons why consumers shop at particular retail outlets  Retail stores can be classified as:  Convenience  Shopping  Specialty

18.  Classifying by Services Provided  Classifying by Services Provided: This classification system consists of three retailer types:  Self-service Store (e.g., Kmart)  Self-selection Store (e.g., Winn-Dixie or Kroger grocery stores)  Full-service Retailers (e.g., Dillard’s or Macy’s)