MKTG 2020 Chapter 11: Retailing and Wholesaling - Fall 2024 PDF

RETAILING AND WHOLESALI NG CHAPTER 11 OCTOBER 26, 2024 RETAILING Retailing: Activities involved in selling goods or services directly to consumers for their personal use. Retailer classification can be based on:  Amount of service offered  Breadth and depth of the product lines  Relative p...

RETAILING AND WHOLESALI NG CHAPTER 11 OCTOBER 26, 2024 RETAILING Retailing: Activities involved in selling goods or services directly to consumers for their personal use. Retailer classification can be based on:  Amount of service offered  Breadth and depth of the product lines  Relative prices charged  Way they are organized MAJOR STORE RETAILER TYPES MAJOR STORE RETAILER TYPES (CONT’D)  SHOPPER MARKETING  Shopper Marketing: Focusing the entire marketing process on turning shoppers into buyers as they move toward the point of sale, whether during in-store, online or mobile shopping.  Marketing efforts coordinated around the consumer’s buying journey as opposed to just focusing on buying behaviour.   OMNI-CHANNEL RETAILER RETAILING  Omni-Channel Retailing: A seamless cross-channel buying experience that integrates in-store, online and mobile shopping, merging the virtual and physical worlds.  The path to a retail purchase – from researching to discovery to buying – runs across multiple channels.  Increased online buying means less need for physical stores/shopping malls.  RETAIL TECHNOLOGY  Retail technologies are critically important as competitive tools.  Data is collected and analyzed to gain consumer insights.  Customers can interact with virtual assistants, try on clothing virtually and customize products online.  Retailers are merging physical and digital worlds to create experiential retailing environments.  Technology connects retailers with manufactures, warehouses, distribution centers and shipping. WHOLESALING Selling goods and services to those buying for resale or business use. Wholesalers fall into three groups:  Merchant Wholesalers: Take ownership (or title) of goods, finance goods, store, deliver and have promotions. Largest single group of wholesalers, accounting for roughly 50% of all wholesaling.  Brokers and Agents: Don’t take title (or ownership) of goods but facilitate buying and selling.  Manufacturers’ and Retailers’ Branches and Offices: Wholesaling operations conducted by sellers or buyers themselves rather than operating through independent wholesalers. CHANNEL FUNCTIONS PERFORMED BY WHOLESALERS  Selling and promoting  Bulk breaking  Warehousing  Transportation  Financing  Risk bearing  Market information  Management services and advice  Buying and assortment building COSTCO WHOLESALE  One of the biggest global brands. Specializes in offering good quality items for low prices  Third largest retailer in the world  Most of its revenue generated from membership sales  Doesn’t spend money on TV advertising.  Bulk offerings  Based on a warehouse club concept developed by in 1976 MERCHANDISE ASSORTMENT  Food court, bakery, optical.  Electronics: Apple, Google, LG, Samsung, Philips  Clothing Brands:, Puma, Columbia, Under Armour  Personal Care Brands: Crest, Advil, Aveeno, Neutrogena, Pantene  Costco also owns a private label brand named Kirkland Signature  Core product is good quality manufactures brands at a discount COMMUNICATIONS MIX  Zero budget allocated towards advertising  Co-Founder Jim Sinegal claims advertising is “evil” as it drives up product costs  Saves approximately 2% by not advertising  Rely on loyal customers and word-of- mouth  Samples and demos are Costco’s sales promotions  Uses YouTube as its own advertising channel BREADTH & DEPTH OF PRODUCT ASSORTMENTS Breadth is the number Depth is the number of categories of of similar types of merchandise carried by merchandise within a a retailer. category. Costco has a lot of PetSmart has little breadth but little depth breadth as it carries only as it animal food & carries everything accessories but has a lot from kayaks to apples. of depth because it carries many types of dog treats. DISCUSSION: DISTRIBUTION STRATEGY  Distribution Strategy: The methods and channels a company uses to deliver its products to the consumer.  Can your product be sold through additional channels or more deeply through the same channels?  What type of retailers might be a good fit for product? Think of ones you may not have considered before.  Can you think of strategic placements or retailers that would help further reach your key target markets.