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RETAILING AND
WHOLESALING
THE VALUE OF RETAILING
Retailing
Retailing includes all activities involved in
Selling and providing goods and
services to...
CLASSIFYING RETAIL OUTLETS
Ownership-place
Ownership-place

Level of Service-promotion
Level of Service-promotion

Classif...
CLASSIFICATION BY OWNERSHIP
Independent
Independent
Retailers-one store
Retailers-one store
ownership
ownership
Chain Stor...
BASIC FORMS OF FRANCHISING

Product and
Product and
Trade Name
Trade Name
Franchising
Franchising

Dealer agrees to sell c...
CLASSIFICATION BY LEVEL OF
SERVICE

Self Service

Factory outlets
Warehouse clubs

Full Service
Discount stores
Exclusive ...
CLASSIFICATION BY PRODUCT
OFFERING
The mix of products offered to the
consumer by the retailer; also called
the product as...
CLASSIFICATION BY PRODUCT
OFFERING
 Depth of Product Line
• Specialty Outlets
• Category Killers

 Breadth of Product Li...
Breadth versus depth of merchandise lines
MAJOR TYPES OF RETAILERS BY
PRODUCT OFFERING
Department Stores
Department Stores
Specialty Stores
Specialty Stores
Superma...
NON-STORE RETAILING
Automatic Vending
Automatic Vending

Direct Marketing
Direct Marketing

Major Forms
Major Forms
of
of
...
DIRECT MARKETING

Direct
Direct
Marketing needs
Marketing needs
no personal
no personal
interaction
interaction

Direct Ma...
CHOOSING THE RETAIL MIX

Product
Product
Choosing the
Choosing the
Retailing Mix
Retailing Mix

Place
Place

Price
Price

...
CHOOSING THE RETAIL MIX
Product
Product
Personnel
Personnel

Promotion
Promotion

Target
Market

Presentation
Presentation...
PRESENTATION (COMMUNICATION) OF
THE RETAIL STORE
Employee Type & Density
Employee Type & Density
Merchandise Type & Densit...
PERSONNEL OF THE RETAIL STORE

How many
How many
How knowledgeable
How knowledgeable
How helpful // invasive
How helpful i...
RETAILING STRATEGY-PRICING
 How much mark-up?
 Allow for Shrinkage and discounting
OR
 Use Everyday Low Pricing
 Bench...
RETAILING STRATEGY - LOCATION
 Central Business District
• Parasites

 Regional Shopping Centers
• Anchor Stores

 Stri...
FIGURE 14-5 The retail life cycle
Scrambled Merchandising

Scrambled merchandising involves
Scrambled merchandising involves
offering several unrelated prod...
Retailing Mix

The retailing mix includes the activities
The retailing mix includes the activities
related to managing the...
Shrinkage

Shrinkage is the breakage and theft of
Shrinkage is the breakage and theft of
merchandise by customers and
merc...
Multichannel Retailers

Multichannel retailers utilize and
Multichannel retailers utilize and
integrate a combination of t...
Retail Life Cycle

The retail life cycle is the process of
The retail life cycle is the process of
growth and decline that...
Parasites

Parasite stores do not create their own
Parasite stores do not create their own
traffic. They make money based ...
Destination Stores

Stores that generate customers from larger
Stores that generate customers from larger
trading areas th...
Power Centers

Huge shopping strips with multiple
Huge shopping strips with multiple
anchors and often a supermarket
ancho...
Anchor Stores

A large store, such as a department store
A large store, such as a department store
or supermarket, that is...
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Types of retailing done

  1. 1. RETAILING AND WHOLESALING
  2. 2. THE VALUE OF RETAILING Retailing Retailing includes all activities involved in Selling and providing goods and services to ultimate consumers for personal, or household use.
  3. 3. CLASSIFYING RETAIL OUTLETS Ownership-place Ownership-place Level of Service-promotion Level of Service-promotion Classification Classification of of Retail Retail Establishments Establishments Product Assortment-product Product Assortment-product Price Price Retailers manipulate their 4 P’s to get the best position in the marketplace– in other words, to create a competitive advantage
  4. 4. CLASSIFICATION BY OWNERSHIP Independent Independent Retailers-one store Retailers-one store ownership ownership Chain Stores-many Chain Stores-many stores but only one stores but only one owner owner Franchises-many Franchises-many owners of many owners of many stores stores
  5. 5. BASIC FORMS OF FRANCHISING Product and Product and Trade Name Trade Name Franchising Franchising Dealer agrees to sell certain Dealer agrees to sell certain products provided by a products provided by a manufacturer, but can use any sales manufacturer, but can use any sales tactics he chooses. tactics he chooses. Ex-Michelin Tires, Avon Ex-Michelin Tires, Avon Business Business Format Format Franchising Franchising Dealer must sell the franchiser’s Dealer must sell the franchiser’s product in the exact way the product in the exact way the franchiser prescribes. franchiser prescribes. Ex – McDonalds, Wendy's Ex – McDonalds, Wendy's
  6. 6. CLASSIFICATION BY LEVEL OF SERVICE Self Service Factory outlets Warehouse clubs Full Service Discount stores Exclusive stores
  7. 7. CLASSIFICATION BY PRODUCT OFFERING The mix of products offered to the consumer by the retailer; also called the product assortment Deep & narrow-like Starbucks Or Shallow & broad like Walmart
  8. 8. CLASSIFICATION BY PRODUCT OFFERING  Depth of Product Line • Specialty Outlets • Category Killers  Breadth of Product Line • General Merchandise Stores • Scrambled Merchandising Why do this?
  9. 9. Breadth versus depth of merchandise lines
  10. 10. MAJOR TYPES OF RETAILERS BY PRODUCT OFFERING Department Stores Department Stores Specialty Stores Specialty Stores Supermarkets Supermarkets Drugstores Drugstores Convenience Stores Convenience Stores Discount Stores Discount Stores Restaurants Restaurants
  11. 11. NON-STORE RETAILING Automatic Vending Automatic Vending Direct Marketing Direct Marketing Major Forms Major Forms of of Nonstore Nonstore Retailing Retailing Electronic Retailing Electronic Retailing
  12. 12. DIRECT MARKETING Direct Direct Marketing needs Marketing needs no personal no personal interaction interaction Direct Mail Direct Mail Catalogs & Mail Order Catalogs & Mail Order Telemarketing Telemarketing
  13. 13. CHOOSING THE RETAIL MIX Product Product Choosing the Choosing the Retailing Mix Retailing Mix Place Place Price Price Personnel Personnel Promotion Promotion Presentation Presentation
  14. 14. CHOOSING THE RETAIL MIX Product Product Personnel Personnel Promotion Promotion Target Market Presentation Presentation Place Place Price Price
  15. 15. PRESENTATION (COMMUNICATION) OF THE RETAIL STORE Employee Type & Density Employee Type & Density Merchandise Type & Density Merchandise Type & Density Fixture Type & Density Fixture Type & Density Factors Factors in in Creating Creating Store’s Store’s Atmosphere Atmosphere Sound Sound Odors Odors Visual Factors Visual Factors
  16. 16. PERSONNEL OF THE RETAIL STORE How many How many How knowledgeable How knowledgeable How helpful // invasive How helpful invasive Factors Factors in in Personnel Personnel decisions decisions Fit the image of the product Fit the image of the product Good personal sellers Good personal sellers
  17. 17. RETAILING STRATEGY-PRICING  How much mark-up?  Allow for Shrinkage and discounting OR  Use Everyday Low Pricing  Benchmark or Signpost Items – items used by consumers as an index of overall price level of the store I.e. – “How much do they sell T shirts for?”
  18. 18. RETAILING STRATEGY - LOCATION  Central Business District • Parasites  Regional Shopping Centers • Anchor Stores  Strip Location Freestanding Freestanding Store Store Shopping Shopping Center Tenant Center Tenant • Destination stores • Power centers  Multichannel Retailers Mall Tenant Mall Tenant
  19. 19. FIGURE 14-5 The retail life cycle
  20. 20. Scrambled Merchandising Scrambled merchandising involves Scrambled merchandising involves offering several unrelated product lines in offering several unrelated product lines in a single store. a single store.
  21. 21. Retailing Mix The retailing mix includes the activities The retailing mix includes the activities related to managing the store and the related to managing the store and the merchandise in the store, which includes merchandise in the store, which includes retail pricing, store location, retail retail pricing, store location, retail communication, and merchandise. communication, and merchandise.
  22. 22. Shrinkage Shrinkage is the breakage and theft of Shrinkage is the breakage and theft of merchandise by customers and merchandise by customers and employees. employees.
  23. 23. Multichannel Retailers Multichannel retailers utilize and Multichannel retailers utilize and integrate a combination of traditional integrate a combination of traditional store formats and nonstore formats such store formats and nonstore formats such as catalogs, television, and online as catalogs, television, and online retailing. retailing.
  24. 24. Retail Life Cycle The retail life cycle is the process of The retail life cycle is the process of growth and decline that retail outlets, like growth and decline that retail outlets, like products, experience, which consists of products, experience, which consists of the early growth, accelerated the early growth, accelerated development, maturity, and decline development, maturity, and decline stages. stages.
  25. 25. Parasites Parasite stores do not create their own Parasite stores do not create their own traffic. They make money based on traffic. They make money based on their proximity to things that will draw their proximity to things that will draw foot traffic. (bigger stores, train foot traffic. (bigger stores, train stations, airports, office buildings, etc.) stations, airports, office buildings, etc.)
  26. 26. Destination Stores Stores that generate customers from larger Stores that generate customers from larger trading areas than their neighbors or trading areas than their neighbors or competitors. competitors. i.e.-Dunkin’ Donuts: “It’s worth the trip!” i.e.-Dunkin’ Donuts: “It’s worth the trip!”
  27. 27. Power Centers Huge shopping strips with multiple Huge shopping strips with multiple anchors and often a supermarket anchors and often a supermarket
  28. 28. Anchor Stores A large store, such as a department store A large store, such as a department store or supermarket, that is prominently or supermarket, that is prominently located in a shopping mall to attract located in a shopping mall to attract customers who are then expected to customers who are then expected to patronize the other shops in the mall. patronize the other shops in the mall.
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