14

Managing Retailing, Wholesaling,

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

14-2
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 Specialty store ƒ Discount store

ƒ Department store ƒ Off-price retailer
ƒ Supermarket ƒ Superstore
ƒ Convenience store ƒ Catalog showroom

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 Levels of Retail Service

ƒ Self service
ƒ Self selection
ƒ Limited service
ƒ Full service

14-5
Retail Positioning Map

14-6
 Nonstore Retailing

ƒ Direct selling
ƒ Direct marketing
ƒ Automatic vending
ƒ Buying service

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 Corporate Retailing
ƒ Corporate chain store
ƒ Voluntary chain
ƒ Retailer cooperative
ƒ Consumer
cooperative
ƒ Franchise
organization
ƒ Merchandising
conglomerate

14-8
 What is a Franchising System?
A franchising system Characteristics
is a system of ƒ The franchisor owns a

individual franchisees, trade or service mark and

a tightly knit group of licenses it to franchisees
enterprises whose in return for royalty
systematic operations payments
are planned, directed, ƒ The franchisee pays for

and controlled by the the right to be part of the

operation’s franchisor. system
ƒ The franchisor provides

its franchisees with a

system for doing business
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 The New Retail Environment
ƒ New retail forms and combinations
ƒ Competition between store-based and non-
store-based retailing
ƒ Growth of giant retailers
ƒ Decline of middle market retailers
ƒ Growing investment in technology
ƒ Global profile of major retailers
ƒ Growth of shopper marketing

14-10
Retailers’ Marketing Decisions

ƒ Target market ƒ Store atmosphere

ƒ Product assortment ƒ Store activities
ƒ Procurement ƒ Store experiences
ƒ Prices ƒ Communications
ƒ Services ƒ Location

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 Store Atmosphere
and Experiences
ƒ Walls
ƒ Lighting
ƒ Signage
ƒ Product
placement
ƒ Floors
ƒ Surface space
ƒ Music

14-12
 Location Decision

ƒ Central business districts

ƒ Regional shopping centers
ƒ Community shopping centers
ƒ Shopping strips
ƒ Location within a larger store

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

14-14
 Indicators of Sales Effectiveness

ƒ Number of people
passing by
ƒ Percent who enter
store
ƒ Percent who buy
ƒ 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 Private labels are everywhere
ƒ Consumer accepts private labels
ƒ Private-label buyers come from all
socioeconomic strata
ƒ Private labels are not a recessionary
phenomenon
ƒ Consumer loyalty shifts from manufacturers to
retailers

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 Wholesaling Functions
ƒ Selling and ƒ Transportation
promoting ƒ Financing
ƒ Buying and ƒ Risk bearing
assortment building ƒ Market information
ƒ Bulk breaking ƒ Management
ƒ Warehousing services and
counseling

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 Major Wholesaler Types

ƒ Merchant
ƒ Full-service
ƒ Limited-service
ƒ Brokers and agents
ƒ Manufacturers
ƒ 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 Sales forecasting ƒ In-plant

ƒ Distribution warehousing
scheduling ƒ Shipping-room
ƒ Production plans processing
ƒ Finished-goods ƒ Outbound
inventory decisions transportation
ƒ Packaging ƒ Field warehousing
ƒ Customer delivery
and servicing

14-24
 Market Logistics Decisions

ƒ How should orders be

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

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Determining Optimal Order
Quantity

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 Transportation Factors

ƒ Speed
ƒ Frequency
ƒ Dependability
ƒ Capability
ƒ Availability
ƒ Traceability
ƒ Cost

14-27