1. Retailers, Wholesalers, & Direct MarketingIntro to MarketingChapter 14

2. Evolution of Retailing Trading Posts General Stores Super Markets- 1930’s Discount Stores- 1950’s Convenience Food Stores- 1960’s Off Price Retailers- 1980’s to 1990’s Internet Retailing

3. Wheel of Retailing A new type of retailer gains a competitive foothold by offering customers lower prices than current outlets charge, maintaining profits by eliminating services. Once established this retailer adds more services and it’s prices rise. Another new retailer comes in with lower prices.

4. Retailing Strategy A retailer bases it’s decisions on: 1)Selecting a target market 2)Developing a marketing strategy which specifies: Merchandising Strategy Customer Service Strategy Pricing Strategy Location/Distribution Strategy Promotion Strategy Store Atmospherics Targeting Women Shoppers

5. Selecting a Target Market Influenced by: Size of Market Profit Potential Demographics or Other Segmentation

6. Merchandising Strategy Guides the decision on which items to offer Category Management Shelf Space

7. Customer Service Strategy To attract & retain customers Gift wrapping, alterations, returns, bridal registries, delivery, installation, electronic shopping, childcare, lounges, coffee, etc.

8. Pricing Strategy Markup Amount that a retailer adds to a products cost to set the final selling price Higher markup if more services are offered Inventory turnover rate Markdown

10. Financial resource

11. Characteristics of the target market

14. Suggestion selling

16. The Disney StoreThe Disney Store Expands from Shopping Centers to Airport Locations Copyright © 2001 by Harcourt, Inc. All rights reserved.

17. Store Atmospherics Physical characteristics & amenities that contribute to the store’s image. Exterior appearance Window display, signs, architecture Interior Layout Lighting, color, scents, sounds, Cleanliness, merchandise presentation

18. Retailers Classified by Form of Ownership Chain Stores Volume purchasing allows lower prices than independent stores Name recognition Independent Retailers Personalized service

19. Classification by Shopping Effort Convenience Accessible location, close parking Long rows Rapid checkout Shopping Consumers compare prices, assortment Specialty Defined product lines Consumers expend considerable effort

20. Classification by Services Provided Self service -Target Self Selection - Kroger grocery stores Full- Service - Saks Fifth Avenue

21. Classification by Product Line Specialty Stores One product line with considerable Limited Line Retailers Few related product lines Category killers Huge selection & low prices in single product lines General Merchandise Retailers Variety Stores Department stores Mass merchandisers Discount Houses Off Price Retailers Hyper Markets & Super Centers

24. Figure 14.1: Transaction Economies through Wholesaling Intermediaries

25. Types of Wholesaling Intermediaries Manufacturer Owned Sales branches, sales offices, trade fairs, & merchandise marts Independent Retailer Owned eBay Has Expanded the Idea of the Traditional Auction House

26. Direct Marketing Direct mail Sales letters, brochures, video cassettes, catalogs, CD ROM catalogs. Rely on database technology. Narrow target market, personalization possible Telemarketing Direct Selling Direct Response Catalogs, internet, home shopping channels Can orderly mail, phone, computer Automatic Merchandising Vending machines Internet Retailing