Retailing and

Wholesaling

1
 Learning Goals
1. Know the major types of retaile
rs and marketing decisions the
y face.
2. Know the major types of whole
salers and the marketing decisi
ons they face.
 Retailing

 Definition
 All activities involved in selling goods
or services directly to final consumers
for their personal, nonbusiness use.
 Retailer
 Business whose sales come primarily
from retailing.
 Retailing

Types of Retailers
 Specialty Stores  Discount Stores
 Department  Convenience
Stores Stores
 Supermarkets  Off-Price Retailers
 Superstores
 Retailing
 Self-service retailers
Retailers Are  Customers are willing to
self-serve to save money
Classified By:  Convenience stores and fast
moving shopping goods
 Limited-service retailers
 Amount of service  Most department stores
 Full-service retailers
 Product lines  Salespeople assist
 Relative prices customers in every aspect of
shopping experience
 Organizational  High-end department stores
and specialty stores
approach
 Retailing

Retailers Are  Specialty stores

 Narrow product lines with

Classified By: deep assortments

 Department stores
 Wide variety of product
lines
 Amount of service  Supermarkets
 Product lines  Convenience stores
 Limited line
 Relative prices  Superstores
 Organizational  Food, nonfood, and
services
approach  Category killers
 Giant specialty stores
 Retailing

Retailers Are  Discount stores

 Low margins are offset
Classified By: by high volume
 Off-price retailers
  Independent off-price
Amount of service
retailers
 Product lines • TJ Maxx, Marshall’s

 Relative prices  Factory outlets

• Levi Strauss, Reebok
 Organizational  Warehouse clubs
approach • Sam’s Club, Costco
 Retailing
 Corporate chain stores
 Commonly owned /
Retailers Are controlled
 Voluntary chains
Classified By:  Wholesaler-sponsored
groups of independent
retailers
  Retailer cooperatives
Amount of service  Groups of independent
 Product lines retailers who buy in bulk
 Franchise organizations
 Relative prices  Based on something unique
 Organizational  Merchandising
approach conglomerates
 Diversified retailing lines
and forms under central
ownership
 Retailing

 Retailer Marketing Decisions

 Target marketing and positioning
 Product assortment, service mix,
store’s atmosphere
 Price
 Promotion
 Place (location)
 Retailing
 The Future of Retailing
 New retail forms and shortening retail life
cycles
• Wheel-of-retailing concept
 Growth of nonstore retailing
• Mail-order, television, phone, online shopping
 Retail convergence
• The merging of consumers, products, prices, and
retailers
 Rise of megaretailers
 Growing importance of retail technology
 Global expansion of major retailers
 Retail stores as “Communities” or
“Hangouts”
 Wholesaling

 Definition
 All activities involved in selling goods
and services to those buying for
resale or business use.
 Wholesaler
 A firm engaged primarily in
wholesaling activity.
 Wholesaling

 Wholesalers add value by performing the

following functions:
 Selling and promoting
 Buying and assortment building
 Bulk-breaking
 Warehousing
 Transportation
 Financing
 Risk bearing
 Market information
 Management services and advice
 Wholesaling

Types of  Full-service wholesalers

 Wholesale merchants
Wholesalers  Industrial distributors
 Limited-service wholesalers
 Cash-and-carry
 Merchant wholesalers
 Truck wholesalers
Wholesalers (jobbers)
 Brokers and Agents  Drop shippers
 Rack jobbers
 Manufacturers’ and  Producer’s cooperatives
retailers’ branches  Mail-order wholesalers
and offices
 Wholesaling

Types of  Brokers and agents do not

Wholesalers take title of the goods.
 Brokers
 Bring buyers and sellers
 Merchant together and assist in
negotiation
Wholesalers
 Agents
 Brokers and Agents  Manufacturers’ agents
 Manufacturers’ and  Selling agents
retailers’ branches  Purchasing agents
and offices  Commission merchants
 Wholesaling

Types of  Sales branches and

offices
Wholesalers  Branches carry
inventory: lumber, auto
equipment, parts
 Merchant  Offices do not carry
Wholesalers inventory: dry goods
 Purchasing officers
 Brokers and Agents  Perform roles similar to
 Manufacturers’ and brokers and agents;
retailers’ branches however, these
individuals are
and offices employees of the
organization
 Wholesaling

 Wholesaler Marketing Decisions

 Target market and positioning
• Targeting may be made on the basis of size of
customer, type of retailer, need for service
 Marketing mix decisions
• Product and service assortment
• Pricing: usually markup standard percent
• Promotion: largely disorganized and unplanned
• Place: location, facilities
 Wholesaling

 Trends in Wholesaling
 Price competition is still intense
 Successful wholesalers must add value by
increasing efficiency and effectiveness
 The distinction between large retailers and
wholesalers continues to blur
 More services will be provided to retailers
 Many wholesalers are going global