Chapter ThirteenChapter Thirteen

Retailing, Direct Marketing, Retailing, Direct Marketing, and Wholesalingand Wholesaling

ObjectivesObjectives

Describe retailing & wholesaling functionsCategorize retailersAnalyze patterns of U.S. retail historyIdentify key retailer strategy elementsExplore impact of the Internet on retailingDiscriminate merchant wholesalers & agentsDescribe contributions of wholesalersDescribe contributions of agent intermediariesIdentify key wholesaler strategy elements

RetailingRetailingRetailingRetailing

All business activities concerned with the sale of goods and services to ultimate consumers.

All business activities concerned with the sale of goods and services to ultimate consumers.

Classifying RetailersClassifying Retailers

Type of ownershipProminent strategy

Classifying Retailers by Classifying Retailers by OwnershipOwnership

IndependentIndependentRetailersRetailers

RetailRetailfranchisefranchise

ChainChainStoreStore

CorporateCorporateChainChain

OwnershipOwnershipGroupGroup

Classifying Retailers by Classifying Retailers by StrategyStrategy

In-Store

Direct

Specialty StoresSpecialty Stores

Narrow varietyDeep selectionPersonalized serviceExamples:

Wallpapers to GoBookstore

Department StoreDepartment StoreDepartment StoreDepartment Store

Chain operationWide varietyFull serviceExamples:

Dillard’sMacy’sBloomingdale’s

Chain operationWide varietyFull serviceExamples:

Dillard’sMacy’sBloomingdale’s

SupermarketsSupermarkets

Wide variety of food and nonfood products

Departmentalized operations

Self-serviceCentralized checkoutExamples:

Albertson’sSafeway

Convenience StoresConvenience Stores

Limited varietyShallow selectionFast serviceExamples:

7-11Circle KWawa

STOP & GO

Other In-StoreOther In-Store

General mass merchandiserCatalog showroomWarehouse club

Specialty mass merchandiserOff-price retailerCategory superstore

Direct MarketingDirect Marketing

Mail-order/direct

Door-to-Door

Vending

e-tailing

Internet Retailing: Internet Retailing: AdvantagesAdvantages

Not location bound

Interactive

Convenient24x7x52

Shopbots

Internet Retailing: Internet Retailing: DisadvantagesDisadvantages

Examination

Privacy

The Wheel of RetailingThe Wheel of Retailing

High: status,High: status,margin, pricemargin, price

Prestige specialtyPrestige specialtystoresstores

High: status,High: status,margin, pricemargin, price

Prestige specialtyPrestige specialtystoresstores

ConventionalConventionaldepartmentdepartment

storesstores

ConventionalConventionaldepartmentdepartment

storesstores

MassMassmerchandisemerchandise

retailersretailers

MassMassmerchandisemerchandise

retailersretailers

Low: status, marginLow: status, marginprice, serviceprice, service

Wholesale clubsWholesale clubs

Low: status, marginLow: status, marginprice, serviceprice, service

Wholesale clubsWholesale clubs

The Dialectic View of The Dialectic View of Retail DevelopmentRetail Development

Thesis

Antithesis

DEPARTMENT STORE

DISCOUNT STORE

DISCOUNTDEPT. STORE

Synthesis

Patterns of retail Patterns of retail development: The development: The GGeneral eneral

SSpecific pecific GGeneral Model eneral Model (GSG)(GSG)

General StoresPopulation growthCities

G

S

Specialty StoresPopulation growthCities

General Stores (containing specialty stores)

Retail Marketing MixRetail Marketing Mix

Consumer

Consumer

PRODUCTPRODUCT PLA

CE/

PLA

CE/

DIS

TR

IBU

TIO

ND

ISTR

IBU

TIO

N

PRICEPRICEPR

OM

OTIO

NP

RO

MO

TIO

N

Key Retail IssuesKey Retail Issues

Merchandise assortment

LocationAtmosphericsCustomer ServiceStore imageDatabase

management Internet strategy

Classifying WholesalersClassifying Wholesalers

Merchant WholesalerTake title~ 80% of all

wholesalersNational or regional

AgentsNo title to goodsFacilitatorsWork on commissionMarket experts

Wholesale Management Wholesale Management StrategiesStrategies

Physical Distribution

Selecting Target Markets/Create Assortments

Strategic Alliances

ReviewReview

Describe retailing & wholesaling functionsCategorize retailersAnalyze patterns of U.S. retail historyIdentify key retailer strategy elementsExplore impact of the Internet on retailingDiscriminate merchant wholesalers & agentsDescribe contributions of wholesalersDescribe contributions of agent intermediariesIdentify key wholesaler strategy elements