What is Retailing?

Retailing refers to the business activity of selling goods services to the final consumer.

Retailer is one whose business firm sells mainly to the final consumer.

A retailer in some cases sell on a non-retail basis, i.e, wholesale. The manufacturer and the
wholesaler may, at times, also perform retailing activities, i.e., sell directly to the final user.

Types of Retailers
Retailers may be classified according to the following:

1. by sales volume

2. by product mix offered

3. by form of ownership

4. by method of operation

Functions of Retailers
Individual consumers or even households require quantities. Because of this, they also tend to buy
small quantities. This condition makes it inevitable for them to become customers of numerous
retailing institutions located throughout the nation.

Retail outlets have become a permanent fixture in every city or town, and it is unthinkable for even a
small town not to have one. It may be probable for a town not to have a single manufacturer or
wholesaler but it will be very difficult to find a town without retailer.

Retailers perform several functions. They are the following:

1. they provide convenience;

2. they provide guarantee and service;

3. they provide financing of transactions;

4. they perform promotional activities;

5. they perform storage function;

6. they perform intelligence service for the manufacturer; and

7. they serve as buying agent of the consumers.

 
Retailers also vary according to their method of operation. They may either be:

(1) full service retailers;

(2) supermarkets;

(3) discount stores; or

(4) nonstore retailers.

Full Service Retailers are stores where assistance in a variety of ways is extended to the
customers. Salespeople who answer product related queries from the customers are a permanent
fixture of these stores. Full service retailers; however, have higher operating costs. This is, of
course, due to the full service extended to the customers. (Lazada, Shopee, Amazon...)

Supermarkets are large department stores which offers a variety of goods including apparel,
groceries, bread, dairy, and candies. There is a minimum of customer service in supermarkets.
Supermarkets abound in Metro Manila and at least one supermarket operates in every city located in
the provinces.

Discount Stores are self-service retailers that sells a wide variety of goods at less than traditional
retail prices. Discount retailers carry many different product lines but which are limited in offerings
per line. Only the highly saleable items are carried to make its discount operations more feasible.

Nonstore Retailers refer to those who sell outside of the store. They may be classified as:

(1) at-home retailers;

(2) telephone retailers;

(3) vending machine retailers;

(4) mail-order retailers;

(5) internet retailers; and

(6) cell phone service retailers.

What is Wholesaling?
Wholesaling refers to all activities involved in selling goods and services to those who intend to
resell or use the same producing goods or services.

Wholesaler is the one who performs wholesaling activities. The wholesale may be called as such
depending on the intention of the buyer.

The following transactions are considered wholesale:

1. the sale of a computer unit for office use;

2. the sale of sugar as raw material for candies;

3. the sale of an electric guitar to a professional guitarist;

4. the sale of janitorial services to an office; the sale of a bus to a transportation company;

5. the sale of books to a university; and the sale of vegetables to a retailer.

 
Functions of the Wholesaler
Any activity that is not needed will be driven out of existence mercilessly by our economic system.
As wholesalers endure, however, proof is provided that they perform certain functions that are
indispensable.

Wholesalers serve as important links between the manufacturers and retailers. They perform all or
any of the following:

1. anticipating customer needs;

2. selling and promotion;

3. financing;

4. storage;

5. breaking bulk;

6. transportation; and

7. risk-taking.

Types of Wholesalers
Wholesalers may be classified according to the functions they perform. They are either:

(1) full function wholesalers;

(2) limited function wholesalers; or

(3) industrial wholesalers.

1. Full Function Wholesalers Full function wholesalers are those who perform most, if not all of the
functions discussed above. They may be further classified into the following: merchant wholesalers;
sales offices and branches; agents; and brokers and commission houses.

2. Limited Function Wholesalers Limited function wholesalers provide only some wholesaling

functions, like order taking and processing. They may be classified as follows: drop shippers; truck
distributors ;mail-order wholesalers cash-and-carry wholesalers cooperatives rack jobbers.

3. Industrial distributors They are also full function Wholesalers performing all or most of the
marketing functions. They stock products which they later sell. They serve the customers by acting
as purchasing agent, storing and delivering goods, extending credit, providing service, and supplying
information. They also serve the manufacturers by covering his market and acting as intelligence
agent.

SUMMARY OF THE LESSON

Retailers and wholesalers play important roles in the distribution of products. Without them, the
manufacturers will be hard-pressed locating customers, motivating them, and serving them
individually. The customers will also be in a difficult position of locating manufacturers and adjusting
to the manufacturers' availability and requirements.

Selling to the final consumer is called retailing. Retailers provide convenience, guarantee and
service, and financing. They also perform promotional activities, storage function, and intelligence
service for manufacturers. Retailers also serve as buying agents of consumers. Retailers may be
classified according to sales volume, product mix offered, form of ownership, and method of
operation. Wholesaling refers to selling goods and services to resellers and manufacturers.
Wholesalers perform any or all of the following: anticipating customer needs, selling and promotion,
financing, storage, breaking bulk, transportation, and risk-taking. Wholesalers may be classified as
either full function, limited function, or industrial wholesalers.

PERSONAL SELLING
What is Personal Selling
Personal selling refers to the direct face-to-face communication between sellers and prospective
buyers. This is an attempt to communicate on a person-to-person basis with the object of making
sales.

Advantage and Disadvantage of Personal Selling

Through the salesperson, the company is able to respond immediately to any inquiry about the
product, making it easier for the prospective customer to decide. The salesperson's efforts are,
sometimes, productive. There are times when seemingly lost opportunities for the company to make
some sales are retrieved by the salesperson and converted into closed sales.

The negative aspect of personal selling, however, is the high cost of maintaining a sales force in the
field. The cost consists of travel expenses, hotel, and food. On the administrative aspect of
maintaining a sales force; the cost covers recruiting, hiring, training, and compensating.
Purposes of Personal Selling

Purposes of Personal Selling personal selling is made because of some purposes, They may be
classified into three:

(l) finding prospects;

(2) convincing prospects to buy; and

(3) keeping customers satisfied.

Finding Prospects

Potential buyers are ever present in the multitude of people in the streets, in the offices, in the
factories, in the farms, and in their homes. To reach all of them would be very costly, but sales have
to be made nevertheless. The first purpose of selling is to identify the prospects so that selling efforts
may be directed to them. The booksellers in Manila, for instance, find that most of their prospects
are students within the university belt. For the same reason, sellers of recorded music, like VCDs
and CDs construct their stores alongside the bookstores.

Convincing the Prospects to Buy After identifying the prospects, the next task is to convince them
to buy. Customers may be motivated to buy, but the actual conversion of motives to cash
transactions is one of the objectives of personal selling.

Keeping Customers Satisfied

Maximizing sales is one of the objectives of the firm. This is possible through the following:

1. convincing new prospects to buy; and

2. convincing customers to continue patronizing the firm.

If new customers keep coming and old customers stay, the result will be a yearly increase in sales.
However, customers will continue buying from the firm if they are satisfied with the service provided
by the firm. As salespersons are in the frontlines, they hold the sensitive positions in keeping the
customers satisfied somet. plain courtesy shown to customers keep them from moving to other
patronages. Others require prompt delivery and services lot If requirements like these are attended
to, selling would be easiet

Duties and Responsibilities of Salespeople

To effectively accomplish the purposes of personal sellin salespersons are expected to perform all or
some of the following responsibilities:

1. direct selling

2. indirect selling
3. nonselling tasks

1. Direct Selling Direct selling is a responsibility of some salespersons. This activity includes
prospecting for new customers, increasing sales to current customers, making sales presentations,
demonstrating products, quoting price and sales terms, and writing orders.

2. Indirect Selling The promotion of company goodwill is an activity that will help generate sales. It is
achieved through indirect selling methods

 1. Advising and counseling. This activity involves providing assistance to customers through
information dissemination.
 2.Handling complaints of customers which will require assistance from salespersons.
 3. Attending sales meetings. This activity will improve the salesperson's knowledge about
new products and new product uses. This, in turn, will help him better serve the customers.

3. Nonselling Tasks Nonselling tasks are those that the company may require to rove the overall
management of the firm and the performance of salespersons. The tasks are composed of the
following:

 1. reporting sales activities

 2. collecting payments for merchandise sold;
 3. assisting the credit department in collecting credit information;
 4. organizing his sales efforts;
 5. working with management;
 6. traveling to cover sales area assignment; and
 7. studying to acquire new knowledge about the company, its products, and its customer's
problems.

Types of Salespersons Salespersons maybe classified according to the functions they perform.

They consist of the following:

1. order getters;

2. order takers; and

3. support personnel.

1. Order Getters Order getters are salespersons whose jobs are to increase the firm's sales. This is
achieved by convincing prospects to buy and convince present customers to buy some more. These
two tasks of order getting pave the way for further classifying order getters into:

 (1) current customer salesperson; and

 (2) new business salesperson.
2. Order Takers Order takers are those that serve the purchase orders of Current customers. This is
done with the objective of satisfying the to motivate him to buy again.

3. Support Personnel Support personnel are those that facilitate the selling function by locating
prospects, educating customers, building goodwill, and providing after sales service. support
personnel include:

 (1) missionary salespersons;

 (2) trade salespersons; and
 (3) technical salespersons.

Missionary salespersons are those who encourage users of the product to purchase their
company's products from distributors and retailers. This is exemplified by detailmen of drug
companies who call on physicians.

Trade salespersons are those who perform, in addition to order taking, product promotion.

The extra tasks they perform are:

 restocking shelves,
 obtaining more shelf space,
 setting up displays,
 providing in-store demonstrations, and
 distributing samples.

Technical salespersons are those whose main function is to increase sales by providing technical
information and assistance to present and potential customers.

The Selling Process

Selling, to be effective, must be undertaken by using proven procedures. The selling process is
composed of various steps. It must be noted at this point that the steps will only be done as a matter
of procedure. Some of them may be eliminated if the situation no longer requires them.

For example, a person, for one reason or another, may already have made up his mind to buy even
before a salesperson meets him. It is better, however, for the student to learn the various steps in
the selling process.

These steps are as follows:

1.prospecting;

2. the preapproach;

3. the approach;

4. the presentation;

5. meeting objections;
6. the close; and

7. the follow-up.