BA 390 week 6
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This 4 page Class Notes was uploaded by Samantha Tucker on Tuesday February 16, 2016. The Class Notes belongs to BA 390 at Oregon State University taught by Toombs in Winter 2016. Since its upload, it has received 27 views. For similar materials see Marketing in Business at Oregon State University.
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Date Created: 02/16/16
BA 390 Week 6 Chapter Thirteen Retailing and Wholesaling Retailing Includes all the activities in selling products or services directly to final consumers for their personal, non-business use Retailers are businesses whose sales come primarily from retailing First moment of truth o No longer takes place only in stores o Growth of digital shopping o Combining in-store and digital shopping o Shopping mobile Types of Retailers o Are classified by… Amount of service Self-service Limited service Full service Product Line o Specialty stores: narrow product line with deep assortment o Department stores Wide variety of product lines Ex: Macy’s, Dillard’s The original one-stop shop; “departments” o Convenience stores Limited line of high-turnover goods Ex: 7-eleven, o Superstores Food and non-food goods Ex: Walmart o Category killers Deep in category with sales staff Ex: Petsmart Relative Prices o Discount Stores: Ex: Target and Walmart o Off-price retailers: T.J. Maxx, Overstock.com; rather than discounting through the store, companies sell at a discount to these retailers (“one-cycle” old) o Factory outlets: relatively new; discounts effective because they are far enough away from the “mother” retail center. o Warehouse clubs: Costco & Sam’s Club; they make more money selling memberships than products Organizational Approach o Corporate chains are two or more outlets that are commonly owned and controlled Size allows them to buy in large quantities at lower prices and gain promotional economies Sears, CVS o Voluntary Chains: allows retailing to survive in secluded areas Wholesale-sponsored groups of independent retailers that engage in group buying and common merchandising Ex: IGA o Retail cooperatives: a group of independent retailers that band together to set up a joint-owned, central wholesale operation and conduct joint merchandising and promotion effects Ex: Ace Hardware o Franchise organizations: based on some unique product or service; on a method of doing business; or on the trade name, good will, or patent that the franchisor has developed. Ex: McDonald’s o Merchandising conglomerates: Ex: Target Retailer marketing decisions o Retail strategy & retail marketing mix create value for targeted retail customers Retail strategy: retail segmentation and targeting; store differentiation and positioning Retail marketing mix: product and service assortment, retail prices, promotion, distribution (location) Product assortment and service decisions: product assortment, services mix, and store atmosphere Price Decisions o Price policy must fit the target market and positioning, product and service assortment, and competition o High markup on lower volume (ex: jewelry store) o Low markup on higher volume (ex: Costco) o High-low pricing: involves charging higher prices on an everyday basis, coupled with frequent sales and other price promotions o Everyday low price (EDLP) involves charging constant, everyday low prices with few sales or discounts Promotion decision: Advertising, personal selling, sales promotion, public relations, direct marketing Place decision: o Central business districts: located in cities and include department and specialty stores, banks, and move theaters o Shopping center: a group of retail businesses planned, developed, owned, and managed as a unit. o Segmentation targeting, differentiation, and positioning involves the definition and profile of the market so the other retail marketing decisions can be made New retail forms and shortening retail life cycles o Retailing Trends and Developments Retail convergence involves the merging of consumers, producers, prices, and retailers, creating greater competition for retailers and greater difficulty differentiating offerings Speed and Content Growth of Non-store Retailing Direct, Online, Mobile (Amazon Prime Now) Growing importance of retail technology provides better forecasts, inventory control, electronic ordering, transfer of information, scanning, online transaction processing, improved merchandise handling systems, and the ability to connect with customers. Green Retailing Environmentally sustainable practices o Store design, construction, operations o Product assortment o Recycling made easier o Package and distribution Global Expansion US retailers moving into other countries with unique formats and strong brands US behind Asian and European companies in global expansion Challenges in meeting needs of local markets o The Future of retailing The rise of mega-retailers involves the rise of mass merchandisers and specialty superstores, the formation of vertical marketing systems, and a rash of retail mergers and acquisitions Superior information systems Buying power Large selection Wholesaling: includes all activities involved in selling goods and services to those buying for resale or business use 1. Selling and promoting: involves the wholesaler’s sales force helping the manufacturer reach many smaller customers at lower cost 2. Buying assortment building: building involves the selection of items and building of assortments needed by their customers, saving the customers work 3. Bulk breaking: wholesaler buying in larger quantity and breaking into smaller lots for its customers 4. Warehousing: wholesaler holding inventory, reducing its customers’ inventory cost and risk 5. Transportation: wholesaler providing quick delivery due to its proximity to the buyer 6. Financing: providing credit and financing suppliers by ordering earlier and paying on time 7. Risk bearing: absorbing risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence 8. Market information: providing information to suppliers and customers about competitors, new products, and price developments 9. Management services and advice: helping retailers train their sales clerks, improve store layouts, and set up accounting and inventory control systems Types of Wholesalers o Merchant wholesalers: largest group of wholesalers and include: Full-service wholesalers who provide a full set of services Limited service wholesalers who provide few service and specialized functions o Brokers and agents: do not take title, perform a few functions, and specialize by product line or customer type Brokers bring buyers and sellers together and assist in negotiations Agents represent buyers or sellers o Manufacturers’ sales branches and offices: sellers or buyers themselves rather than through independent wholesalers Wholesaler marketing decisions o Wholesale strategy Wholesale segmentation and targeting Segmentation, targeting, differentiation, positioning decisions o Size of customer o Type of customer o Need for service Differentiation and service positioning o Wholesale marketing mix Four P’s: product, price, promotion, place Trends in wholesaling o Need for greater efficiency o Added-value customer relationships o Increase in customer demand for more services o Increase use of technology to boost productivity
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