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Retailing and Wholesaling

Retailing
Retailing
All activities involved in selling goods or services
directly to final consumers for their personal,
non-business use.

Retailer
Business whose sales come primarily from
retailing.

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Table 13.1
Major Store Retailer Types

Retailing
Retailers Are
Classified By:

Self-service retailers
Customers are willing to selfserve to save money
Discount stores

Amount of service

Limited-service retailers

Product lines

Full-service retailers

Most department stores


Salespeople assist customers in
every aspect of shopping
experience
High-end department stores
Specialty stores

Relative prices
Organizational
approach
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Retailing
Retailers Are
Classified By:

Specialty stores
Narrow product lines with
deep assortments

Department stores
Wide variety of product lines

Amount of service

Supermarkets

Product lines

Convenience stores

Relative prices

Superstores

Limited line
Food, nonfood, and services

Organizational
approach

Category killers
Giant specialty stores
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Retailing
Retailers Are
Classified By:
Amount of service
Product lines

Discount stores
Low margins are offset by
high volume

Off-price retailers
Independent off-price
retailers
Mydin, EconSave.

Relative prices

Factory outlets

Organizational
approach

Warehouse clubs

Bata, Reebok
Sams Club, Costco
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Retailing
Retailers Are
Classified By:
Amount of service
Product lines

Corporate chain stores


Commonly owned / controlled

Voluntary chains
Wholesaler-sponsored groups
of independent retailers

Retailer cooperatives
Groups of independent
retailers who buy in bulk

Relative prices

Franchise organizations

Organizational
approach

Based on something unique

Merchandising conglomerates
Diversified retailing lines and
forms under central ownership
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Retailing
Retailer Marketing Decisions
Price Decision

Price policy must fit the target market and


positioning, product and service assortment,
and competition

High markup
on lower
volume
Low markup
on higher
volume

Retailing
Retailer Marketing Decisions
Price Decision

High-low pricing involves charging higher prices on an everyday


basis, coupled with frequent sales and other price promotions
Everyday low price (EDLP) involves charging constant,
everyday low prices with few sales or discounts

Retailing

The Future of Retailing


New Retail Forms and Shortening Retail Life Cycles

Growth of non-store retailing includes:

Mail order

Television

Phone

Online

Wholesaling
Wholesaling
All activities involved in selling goods and
services to those buying for resale or business
use.

Wholesaling
A firm engaged primarily in wholesaling activity.

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Wholesaling
Wholesaling includes all activities involved in selling goods and services to those buying for resale or business use

Selling and promoting


Buying assortment building
Bulk breaking
Warehousing
Transportation
Financing
Risk bearing
Market information
Management services and advice

Wholesaling
Types of
Wholesalers
Merchant
Wholesalers
Brokers and
Agents
Manufacturers
and retailers
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branches and

Full-service wholesalers
Wholesale merchants
Industrial distributors

Limited-service wholesalers

Cash-and-carry wholesalers
Truck wholesalers (jobbers)
Drop shippers
Rack jobbers
Producers cooperatives
Mail-order wholesalers

Wholesaling
Types of
Wholesalers
Merchant
Wholesalers
Brokers and
Agents
Manufacturers
and retailers
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branches and

Brokers
Bring buyers and sellers
together and assist in
negotiation

Agents

Manufacturers agents
Selling agents
Purchasing agents
Commission merchants

Wholesaling
Types of
Wholesalers
Merchant
Wholesalers
Brokers and
Agents
Manufacturers
and retailers
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branches and

Sales branches and offices


Branches carry inventory:
lumber, auto equipment, parts
Offices do not carry inventory:
dry goods

Purchasing officers
Perform roles similar to
brokers and agents, however
these individuals are
employees of the organization

Promotion Strategy
Topic 8

Topic Outline
The promotion mix.
Integrated marketing communications.
A view of the communication process.

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The Promotion Mix


The promotion mix is the specific blend of advertising,
public relations, personal selling, and direct-marketing
tools that the company uses to persuasively
communicate customer value and build customer
relationships

The Promotion Mix


Major Promotion Tools

Marketing Communication / Promotion Mix

Advertising
Direct connections
with carefully
targeted individual
customers to
obtain immediate
response and
cultivate lasting
relationships

Any paid form


of nonpersonal
presentation
and promotion
by an
identified
sponsor

Direct
Marketing

Public Relations
Building good relations with
publics by obtaining favorable
unpaid publicity
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Personal Selling
Personal
presentation to
make sales and
build customer
relationships

Sales Promotion
Short-term incentives to
encourage purchase or sale of
a product or service

Setting the Promotional Mix


Promotion Tools

Reaches large, geographically


dispersed audiences, often with high
frequency
Low cost per exposure, though
overall costs are high

Advertising
Personal Selling

Consumers perceive advertised


goods as more legitimate
Dramatizes company/brand

Sales Promotion

Builds brand image; may stimulate


short-term sales

Public Relations

Impersonal; one-way communication

Direct Marketing
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Major media types: Newspaper,


Radio, TV, magazines, direct mail,
outdoor, Internet

Setting the Promotional Mix


Promotion Tools
Advertising
Personal Selling
Sales Promotion
Public Relations
Direct Marketing
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Most effective tool for building buyers


preferences, convictions, and actions
Personal interaction allows for
feedback and adjustments
More effective than advertising in
complex selling situation
Relationship-oriented
Buyers are more attentive
Sales force represents a long-term
commitment
Most expensive of the promotional
tools
The sales force works to produce
customer satisfaction and company
profit.

Setting the Promotional Mix


Promotion Tools

May be targeted at the trade or


ultimate consumer
Makes use of a variety of formats:
premiums, coupons, contests, etc.

Advertising
Personal Selling
Sales Promotion
Public Relations
Direct Marketing
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Attracts attention, offers strong


purchase incentives, dramatizes
offers, boosts sagging sales
Stimulates quick response
Short-lived
Not effective at building long-term
brand preferences

Sales Promotion
Consumer Promotion Tools
Samples
Cash Refunds
(Rebates)
Price packs (centsoff deals)
Advertising
Specialties
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Premiums
Patronage Rewards
Point-of-Purchase
Communications
Contests, Games,
and Sweepstakes

Sales Promotion
Trade Promotion Tools
Discounts (price off, off-list, and off invoice)
Allowances
Advertising allowances
Display allowances

Free goods
Push money
Specialty advertising items
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Sales Promotion
Business Promotion Tools
Includes many of the same tools used in
consumer and trade promotions
Two additional tools:
Conventions and trade shows
Sales contests

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Setting the Promotional Mix


Promotion Tools

Highly credible

Often the most underused element in


the promotional mix

Many forms: news stories, news


features, events and sponsorships, etc.
Reaches many prospects missed via
other forms of promotion

Advertising
Personal Selling
Sales Promotion
Public Relations
Direct Marketing
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Good public relations can be a powerful


brand-building tool

Advantages:

Strong impact on public


awareness at lower cost than
advertising
Greater credibility than advertising

Public Relations
Public Relations Tools
News
Speeches
Corporate Identity
Materials
Mobile
Marketing
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Special Events
Written Materials
Audiovisual
Materials
Public Service
Activities

Public Relations
Public Relations Functions/Events
Press
Relations
Product
Publicity
Public Affairs
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Lobbying
Investor
Relations
Development

Setting the Promotional Mix


Promotion Tools
Advertising
Personal Selling
Sales Promotion
Public Relations
Direct Marketing
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Many forms: Telephone


marketing, direct mail,
online marketing, etc.
Four distinctive
characteristics:

Nonpublic
Immediate
Customized
Interactive

Well-suited to highly
targeted marketing efforts

Direct Marketing
Benefits of Direct Marketing
to Buyers

Convenient
Easy to use
Private
Access to a wealth of
information
Immediate
Interactive

Benefits of Direct Marketing


to Sellers
Powerful tool for building
relationships
Allows for targeting of small
groups or individuals with
customized offers in a
personalized fashion
Offers access to buyers that
couldnt be reached via other
channels
Low-cost, effective
alternative for reaching
specific markets

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Direct Marketing
Forms of Direct Marketing
Face-to-Face
Selling
Telemarketing
Direct-Mail
Marketing
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Catalog Marketing
Kiosk Marketing
Online Marketing
Direct-Response
TV Marketing

Setting the Promotional Mix


Promotion Mix Strategies
Push strategy: trade promotions and personal
selling efforts push the product through the
distribution channels.
Pull strategy: producers use advertising and
consumer sales promotions to generate strong
consumer demand for products.

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Setting the Total Promotion


Budget and Mix
Promotion Mix Strategies

Integrated Marketing
Communications
Integrated Marketing Communications
The concept under which a company carefully
integrates and coordinates its many
communications channels to deliver a clear,
consistent, and compelling message about the
organization and its products.
IMC implementation often requires the hiring of a
MarCom manager.

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A View of the Communication


Process
The Communication Process