Chapter Thirteen

RETAILERS, WHOLESALERS AND THEIR STRATEGY PLANNING

 

THE NATURE OF RETAILING

bullet Retailing: Covers all activities involved in the sale of products to final consumers. 
bullet See Exhibit 13-1, page 350 for the types of Retailers.
bullet  Consumers spend $3.7 trillion/yr. 

 

PLANNING A RETAILERS STRATEGY

Reasons for consumers selecting a particular retailer:

bullet Price
bullet Location
bullet Product selection
bullet Helpful information
bullet Fairness in dealings
bullet Special Services
bullet Shopping atmosphere
bullet Social image

Product Classes

bullet Convenience: Stax
bullet Shopping: Dillards
bullet Specialty: Limited

All retailers should carefully define target markets!!!!! 

   

CONVENTIONAL RETAILERS TRY TO AVOID PRICE COMPETITION

bullet Limited line: can satisfy some target markets better/small/are being squeezed
bullet Specialty shops: computer stores/knowledgeable salespeople
bullet Department stores: wide variety/40% markup

 

EVOLUTION OF MASS MERCHANDISING RETAILERS

Mass merchandising concept: low price -- high volume -- larger markets

bullet Supermarkets: Avg sales -- $17 million/1% margin
bullet Catalog showrooms: few services
bullet Discount houses: hard goods/low margins
bullet Mass merchandisers: many depts./soft goods/low margins e.g. Walmart
bullet Supercenters: routinely purchased items/food
bullet Warehouse clubs: Sams/8-10% markup
bullet Singleline mass merchandiser: fast turnover/high sales volume. e.g. Toys-R-Us

 

SOME RETAILERS FOCUS ON ADDED CONVENIENCE

bullet Convenience stores: 4% profit margin/gas stations, etc.
bullet Automatic vending: high cost/41% plus profit margin
bullet Telephone and direct mail retailing: 4% retail sales/7% profit margin
bullet Door/Door selling: less than 1% of retail sales
bullet QVC, Home Shopping Network:  sales are growing

 

RETAILING ON THE INTERNET

bullet Sales are expected to continue to grow
bullet Easy to comparison shop
bullet New sites daily -- Still in its infancy stage

   

RETAILING TYPES ARE EXPLAINED BY CONSUMER NEEDS FILLED

Three dimension view of retailing: See Exhibit 13-2, page 359

   

RETAILER SIZE AND PROFIT

See exhibit 13-4, page 361

   

WHAT IS A WHOLESALER?

bullet Wholesaling is concerned with the activities of those persons or establishments that sell to retailers and other merchants, and or to industrial, institutional and commercial users.
bullet See exhibit 13-7, page 367 for types of wholesalers
bullet Note: To survive, wholesalers must develop a good marketing strategy. Profit margins are thin, and those who survive will need to be efficient!! 

Next Steps:  Please review the PowerPoint Overview slides (23-44) for this chapter.  Then proceed to the discussion area.

 
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