Chapter 14 - Managing Retailing, Wholesaling, And Logistics

14 Managing Retailing, Wholesaling, and Logistics

Chapter Questions ƒ

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What major types of marketing intermediaries? What marketing decisions do these marketing intermediaries make? What are the major trends in retailing, wholesaling, and logistics?

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Retailing Retailing includes all of the activities involved in selling goods or services directly to final consumers for personal, nonbusiness use. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing.

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Major Retailer Types ƒ ƒ ƒ ƒ

Specialty store Department store Supermarket Convenience store

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Discount store Off-price retailer Superstore Catalog showroom

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Levels of Retail Service ƒ ƒ ƒ ƒ

Self service Self selection Limited service Full service

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Retail Positioning Map

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Nonstore Retailing ƒ ƒ ƒ ƒ

Direct selling Direct marketing Automatic vending Buying service

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Corporate Retailing ƒ ƒ ƒ ƒ

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Corporate chain store Voluntary chain Retailer cooperative Consumer cooperative Franchise organization Merchandising conglomerate 14-8

What is a Franchising System? A franchising system is a system of individual franchisees, a tightly knit group of enterprises whose systematic operations are planned, directed, and controlled by the operation’s franchisor.

Characteristics ƒ The franchisor owns a trade or service mark and licenses it to franchisees in return for royalty payments ƒ The franchisee pays for the right to be part of the system ƒ The franchisor provides its franchisees with a system for doing business 14-9

The New Retail Environment ƒ ƒ

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New retail forms and combinations Competition between store-based and nonstore-based retailing Growth of giant retailers Decline of middle market retailers Growing investment in technology Global profile of major retailers Growth of shopper marketing

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Retailers’ Marketing Decisions ƒ ƒ ƒ ƒ ƒ

Target market Product assortment Procurement Prices Services

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Store atmosphere Store activities Store experiences Communications Location

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Store Atmosphere and Experiences ƒ ƒ ƒ ƒ

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Walls Lighting Signage Product placement Floors Surface space Music 14-12

Location Decision ƒ ƒ ƒ ƒ ƒ

Central business districts Regional shopping centers Community shopping centers Shopping strips Location within a larger store

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Tips for Increasing Sales in Retail Space ƒ ƒ ƒ ƒ

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Keep shoppers in the store Honor the transition zone Don’t make them hunt Make merchandise available to the reach and touch Note that men do not ask questions Remember women need space Make checkout easy

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Indicators of Sales Effectiveness ƒ

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Number of people passing by Percent who enter store Percent who buy Average amount spent per sale

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Retail Category Management Define the category Figure out its role Assess performance Set goals Choose the audience Figure out tactics Implement the plan 14-16

Retailer Services Mix Prepurchase services Postpurchase services Ancillary services

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Private Label Brands ƒ ƒ ƒ

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Private labels are everywhere Consumer accepts private labels Private-label buyers come from all socioeconomic strata Private labels are not a recessionary phenomenon Consumer loyalty shifts from manufacturers to retailers

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Wholesaling Functions ƒ

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Selling and promoting Buying and assortment building Bulk breaking Warehousing

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Transportation Financing Risk bearing Market information Management services and counseling

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Major Wholesaler Types ƒ ƒ ƒ ƒ ƒ ƒ

Merchant Full-service Limited-service Brokers and agents Manufacturers Specialized

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Market Logistics Supply Chain Management Supply chain management starts before physical distribution and means strategically procuring the right inputs (raw materials, components and capital equipment); converting them efficiently into finished products; and dispatching them to the final destinations.

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Market Logistics Planning STEP 1: Deciding on the company’s value proposition to its customers STEP 2: Deciding on the best channel design and network strategy STEP 3: Developing operational excellence STEP 4: Implementing the solution

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What are Integrated Logistics Systems? An integrated logistics system (ILS) includes materials management, material flow systems, and physical distribution, aided by information technology.

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Market Logistics ƒ ƒ

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Sales forecasting Distribution scheduling Production plans Finished-goods inventory decisions Packaging

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In-plant warehousing Shipping-room processing Outbound transportation Field warehousing Customer delivery and servicing 14-24

Market Logistics Decisions ƒ

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How should orders be handled? Where should stock be located? How much stock should be held? How should goods be shipped?

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Determining Optimal Order Quantity

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Transportation Factors ƒ ƒ ƒ ƒ ƒ ƒ ƒ

Speed Frequency Dependability Capability Availability Traceability Cost

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