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Chapter 13 Notes.

This document provides an overview of Chapter 13 from a marketing textbook, which covers retailing and wholesaling. The chapter discusses different types of retailers like department stores, supermarkets, convenience stores, and specialty stores. It also examines major retailer decisions around target markets, product assortments, pricing, and location. Additionally, the chapter outlines different wholesaler models including merchant, broker, and manufacturer wholesalers. The objectives are to explain the roles of retailers and wholesalers in distribution channels and describe their major types and marketing decisions.

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Hager Massoud
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28 views

Chapter 13 Notes.

This document provides an overview of Chapter 13 from a marketing textbook, which covers retailing and wholesaling. The chapter discusses different types of retailers like department stores, supermarkets, convenience stores, and specialty stores. It also examines major retailer decisions around target markets, product assortments, pricing, and location. Additionally, the chapter outlines different wholesaler models including merchant, broker, and manufacturer wholesalers. The objectives are to explain the roles of retailers and wholesalers in distribution channels and describe their major types and marketing decisions.

Uploaded by

Hager Massoud
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Foundation of Marketing

(2022-2023)
Course Code: MKT121

Dr. Mayar Farrag


mfarrag@ecu.edu.eg

Dr. Perihan Salah


sperihan@ecu.edu.eg

Group TA Email
Group (A) Muhammad Alaa maamin@ecu.edu.eg
Group (B) Nourhan Ali nali@ecu.edu.eg
Group (C) Nada El-Mahdy nmelmahdy@ecu.edu.eg

1
Chapter 13
Retailing and wholesaling

Chapter overview
This chapter is a continuation of the prior chapter on marketing channels; it provides more detail
on retailing and wholesaling, two very important concepts in the value delivery network.

Retailers can be classified according to several characteristics, including the amount of service
they offer, the breadth and depth of their product lines, the relative prices they charge, and how
they are organized.

The major decisions retailers make are centered on their target market and positioning, their
product assortment and services, their price, their promotion strategies, and where they are
located.

The wheel of retailing concept says that many new retailing forms begin as low-margin, low-
price, low-status operations. They challenge established retailers, and then the new retailers’
success leads them to upgrade their facilities and offer more services. In turn, their costs
increase, and eventually they become like the conventional retailers they replaced. The cycle
begins again.

There are many types of wholesalers, including merchant wholesalers, agents and brokers, and
manufacturers’ sales branches and offices.

Chapter objectives
1. Explain the role of retailers in the distribution channel and describe the major types of
retailers.
2. Describe the major retailer marketing decisions.
3. Discuss the future of retailing.
4. Explain the major types of wholesalers and their marketing objectives.

2
Chapter outline

Retailing

Retailing includes all the activities involved in selling


products or services directly to final consumers for their
personal, nonbusiness use.

Retailers: Businesses whose sales come primarily from


retailing.

Many marketers are now embracing the concept of shopper


marketing, the idea that the retail store itself is an
important marketing medium.

In recent years nonstore retailing has been growing much


faster than has store retailing.

Product Line

Specialty stores carry narrow product lines with deep


assortments within those lines.

Department stores carry a wide variety of product lines.

In recent years, department stores have been squeezed


between more focused and flexible specialty stores on the
one hand, and more efficient, lower-priced discounters on
the other.

Supermarkets are the most frequently shopped type of


retail store.

Supermarkets also have been hit hard by the rapid growth of


out-of-home eating.

Supermarkets’ share of the groceries and consumables


market plunged from 89 percent in 1988 to 50 percent in
2008.

Convenience stores are small stores that carry a limited


line of high-turnover convenience goods.

3
Superstores are much larger than regular supermarkets and
offer a large assortment of routinely purchased food
products, nonfood items, and services.

Supercenters (called hypermarkets in some countries) are


very large combination food and discount stores.

Category killers are superstores that are actually giant


specialty stores. (Best Buy and Circuit City are examples.)

Service retailers include hotels and motels, banks, airlines,


colleges, hospitals, movie theaters, tennis clubs, bowling
alleys, restaurants, repair services, hair salons, and dry
cleaners.

Service retailers in the United States are growing faster than


product retailers.

Hypermarkets

Relative Prices

Discount stores sells standard merchandise at lower prices


by accepting lower margins and selling higher volume.

Off-price retailers offer products to fill the ultralow-price,


high-volume gap by pricing lower than discount stores.

The three main types of off-price retailers are:

1. Independent off-price retailers either are


independently owned and run or are divisions of
larger retail corporations.
2. Factory outlets—manufacturer-owned and operated
stores—sometimes group together in factory outlet
malls and value-retail centers.
3. Warehouse clubs (or wholesale clubs or
membership warehouses), operate in huge, drafty,
warehouse-like facilities and offer few frills.

Wholesaling

Wholesaling includes all activities involved in selling


goods and services to those buying for resale or business
use.

4
Wholesalers are those firms engaged primarily in
wholesaling activities.

Types of Wholesalers

Wholesalers fall into three major groups

1. Merchant wholesalers are the largest single group


of wholesalers, accounting for roughly 50 percent of
all wholesaling. Merchant wholesalers include two
broad types:
a. Full-service wholesalers provide a full set
of services.
b. Limited-service wholesalers offer fewer
services to their suppliers and customers.

The different types of limited-service wholesalers perform


varied specialized functions:

2. Brokers and agents differ from merchant


wholesalers in two ways:
a. They do not take title to goods.
b. They perform only a few functions.

A broker brings buyers and sellers together and


assists in negotiation.

Agents represent buyers or sellers on a more


permanent basis. Manufacturers’ agents (also called
manufacturers’ representatives) are the most common type
of agent wholesaler.

3. Manufacturers’ sales branches and offices are


wholesaling by sellers or buyers themselves rather
than through independent wholesalers.

Market Coverage

Intensive Distribution
– Place a product in as many outlets as possible
Selective Distribution
– Limited number of carefully chosen outlets to distribute
products

5
Exclusive Distribution
– Gives intermediaries exclusive rights to sell a product in
a specific geographic area

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