Marketing: An Introduction

Sixth Canadian Edition

Chapter 12
Retailing and Wholesaling

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Copyright © 2017 Pearson Canada Inc. 12 - 2
Chapter 12: Learning Objectives
1. Explain the role of retailers in the distribution channel,
and describe the major types of retailers
2. List and describe the major marketing decisions made by
retailers
3. Identify and discuss the major trends and developments
in contemporary retailing
4. Explain the role of wholesalers in the distribution channel,
and describe the major types of wholesalers
5. List and describe the major marketing decisions made by
wholesalers

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What Is Retailing?
• Retailing - includes all the activities involved in selling
products or services directly to final consumers for their
personal, nonbusiness use.
• Many institutions—manufacturers, wholesalers, and
retailers—do retailing.
• Most retailing is done by retailers - businesses whose
sales come primarily from retailing.

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Retailing in Canada

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Types of Retailers: Amount of Service

Limited-
Self-serve Service Full-service
Retailers Retailers Retailers
• Convenience • Home • Higher-end
Stores Depot market
• Discount • Canadian • Luxury
Stores Tire goods
• Gas Stations

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Types of Retailers: Product Line (1 of 2)

Speciality
stores
→ Narrow product line
Deep assortment
Lululemon

Supermarkets
→ Wide assortment

Department
Stores
→ Wide variety

General
Merchandise
→ Walmart

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Types of Retailers: Product Line (2 of 2)
Superstore
→ Larger than
department stores
Large assortment

Category Killer
→ Large specialty stores
Big Box

Service Retailer
→ Tennis clubs
Dry cleaner

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Types of Retailers: Organizational
Approach (1 of 2)
Table 12.1 Major Types of Retail Organizations

Type Description Examples

Corporate chain Two or more outlets that are SaveOnFoods,
commonly owned and controlled. Shoppers
Corporate chains appear in all Drug Mart,
types of retailing but are strongest Hudson’s Bay,
in department stores, discount Sobeys
stores, food stores, drugstores,
and restaurants.
Voluntary chain Wholesaler-sponsored group of Independent
independent retailers engaged in Grocers Alliance
group buying and merchandising. (IGA)

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Types of Retailers: Organizational
Approach (2 of 2)
[Table 12.1 Continued]

Type Description Examples

Retailer Group of independent retailers Home Hardware,
cooperative who jointly establish a central Best Western
buying organization and conduct
joint promotion efforts.
Franchise Contractual association between a Boston Pizza,
organization franchisor (a manufacturer, Subway, Mr. Lube,
wholesaler, or service Giant Tiger, 7-
organization) and franchisees Eleven
(independent businesspeople who
buy the right to own and operate
one or more units in the franchise
system).

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Retailer Marketing Strategies

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Retailer Marketing Strategies: Targeting
and Positioning

Five Guys Burger and

Fries succeeds by
positioning itself strongly
away from McDonald’s
and other large fast food
giants. The menu is very
limited, but what you can
get at Five Guys you
simply can’t get at
McDonald’s.

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Retailer Marketing Strategies: Product
Assortment and Services Decisions
• Product assortment
• Services mix
• Store atmosphere

Sport Chek’s 12 000-

square-foot “retail lab”
store in Toronto
demonstrates the latest
in experiential retail
combined with the high-
energy environment of
a sports stadium.

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Retailer Marketing Strategies:
Price, Promotion, and Place Decisions
PRICE PROMOTION PLACE
DECISIONS DECISIONS DECISIONS
• Mark-up vs. • Retailers use • Location is
Volume? all five critical
• Everyday low promotional • Shopping
pricing (EDLP) – tools centre
Walmart/Costco • Interact with • Power centre
• High-low customers • Lifestyle centre
pricing using social
media

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Retailing Trends and Developments (1 of 7)
Trend Description
Experiential Concept stores with customer friendly ambience aimed
to engage rather than dazzle
In-Store In-store digital elements ranging from kiosks for viewing,
Technology searching content, to scannable product information and
self-checkout

Gift Cards $1B industry in Canada, builds brand awareness and

capitalizes on time-starved Canadians. Also profitable
due to excessive non-redemption
Shopper Using point-of-sale promotions and advertising to extend
Marketing brand equity to “the last mile” and encourage favorable
in-store purchase decisions
Social Media Smartphones and other handheld electronic devices are
& Mobile becoming like “butlers” to shoppers

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Retailing Trends and Developments (2 of 7)

• Experiential Retail BMW’s concept store in Paris looks

more like a posh retailer than a car dealership.

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Retailing Trends and Developments (3 of 7)

• In-Store, Mobile, and • Shoppable Media

Wearable Technology

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Retailing Trends and Developments (4 of 7)
• Increasing Use of Gift Cards
– Billion-dollar Industry
– Many go unused
• Shopper Marketing
– Pre-shopping
– Shopping
– Post-shopping

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Retailing Trends and Developments (5 of 7)
• Online Retail
– Showrooming
• Social Media and
Mobile

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Retailing Trends and Developments (6 of 7)
• New Retail Forms and
Retail Convergence
– Pop-up Stores
• Green Retailing

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Retailing Trends and Developments (7 of 7)
• International
Retailing
– Vancouver’s Aritzia
is expanding into
the U.S., carefully
choosing just the
right locations for
its unique stores.

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Wholesaling
• Wholesaling:
– Many of the largest and
most important
wholesalers are largely
unknown to consumers.
But they are very well
known and much valued
by the business
customers they serve

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Wholesaler Functions
• Selling and promoting • Transportation
• Buying and assortment • Financing
building
• Risk bearing
• Bulk breaking
• Market Information
• Warehousing
• Management Services

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Types of Wholesalers
• Wholesalers fall into three basic groups:
1. Merchant wholesalers
2. Full-service wholesalers
3. Limited-service wholesalers

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Major Types of Wholesalers
• Merchant wholesalers
• Full-Service Wholesalers
• Cash-and-carry
wholesalers
• Truck wholesalers
• Producers’ cooperatives
• Mail-order or Web
wholesalers
• Manufacturers’ agents
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• Selling agents
• Purchasing agents
• Commission merchants
• Manufacturers’ and
Retailers’ Branches and
Offices
• Sales Branches and
Offices
• Purchasing Offices
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Wholesaler Marketing Decisions

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Trends in Wholesaling
• Wholesalers are challenged by:
– Need to achieve greater cost efficiencies
– Demand for lower prices
– Changing needs of suppliers

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Reviewing the Concepts
1. Explain the role of retailers in the distribution channel,
and describe the major types of retailers
2. List and describe the major marketing decisions made by
retailers
3. Identify and discuss the major trends and developments
in contemporary retailing
4. Explain the role of wholesalers in the distribution channel,
and describe the major types of wholesalers
5. List and describe the major marketing decisions made by
wholesalers

Copyright © 2017 Pearson Canada Inc. 12 - 28