Chapter

18
Managing Retailing,
Wholesaling,
and Logistics

Copyright © 2016 Pearson Education Ltd. 18-1

Learning Objectives
1. What major types of marketing intermediaries occupy this
sector?
2. What major changes are occurring in the modern retail
marketing environment with respect to competitive market
structure and technology?
3. What marketing decisions do marketing intermediaries make?
4. What does the future hold for private label brands?
5. What are some of the important issues in wholesaling??
6. What are some important issues in logistics?

Copyright © 2016 Pearson Education Ltd. 18-2

 Retailing
• Retailing
– All the activities in selling
goods or services directly to
final consumers for personal,
nonbusiness use
• Retailer/retail store
– Any business enterprise
whose sales volume comes
primarily from retailing

Copyright © 2016 Pearson Education Ltd. 18-3

 Types of retailers
• Store retailers, nonstore retailers, and retail
organizations

Copyright © 2016 Pearson Education Ltd. 18-4

 Types of retailers
• Store retailers:

• Specialty store • Discount store

• Department store • Extreme value or hard-
• Supermarket discount store
• Convenience store • Off-price retailer
• Drug store • Superstore
• Catalog showroom

Copyright © 2016 Pearson Education Ltd. 18-5

 Types of retailers
• Levels of service for store retailers

 Self-service
 Self-selection
 Limited service
 Full service

Copyright © 2016 Pearson Education Ltd. 18-6

 Types of retailers
• Nonstore retailing
– Direct marketing
– Direct selling
– Automatic vending
– Buying services

Copyright © 2016 Pearson Education Ltd. 18-7

 Types of retailers
• Corporate retailing and franchising

Copyright © 2016 Pearson Education Ltd. 18-8

 Corporate Retailing and
Franchising
• Franchises are distinguished by three
characteristics:
– The franchisor owns a trade or service mark
and licenses it to franchisees in return for
royalty payments
– The franchisee pays for the right to be part of
the system
– The franchisor provides its franchisees with a
system for doing business

Copyright © 2016 Pearson Education Ltd. 18-9

 The Modern Retail Marketing
Environment
• Competitive retail market structure

 New retail forms and combinations

 Growth of giant retailers
 Growth of intertype competition
 Emergence of fast retailing
 Decline of middle-market retailers

Copyright © 2016 Pearson Education Ltd. 18-10

 The Modern Retail Marketing
Environment
• Role of technology
– Retailers use
technology for
business operations,
to enhance the
consumer shopping
experience inside the
store, and
Internet/social media
strategies

Copyright © 2016 Pearson Education Ltd. 18-11

 Marketing Decisions

• Target market • Services

• Channels • Store atmosphere
• Product assortment • Store activities and
• Procurement experiences
• Prices • Communications
• Location

Copyright © 2016 Pearson Education Ltd. 18-12

 Product Assortment
• Develop product differentiation

 Feature exclusive national brands

 Feature private-label merchandise
 Feature distinctive-merchandise events
 Feature ever-changing merchandise
 Feature the latest merchandise first
 Offer merchandise-customizing services
 Offer a highly targeted assortment

Copyright © 2016 Pearson Education Ltd. 18-13

 Services
• Retailers must decide on the services mix to
offer customers:

Prepurchase services

Postpurchase services

Ancillary services

Copyright © 2016 Pearson Education Ltd. 18-14

 Location

Central Regional
business shopping
districts centers

Community
Stand-alone shopping
stores centers

Location within Shopping

a larger store strips

Copyright © 2016 Pearson Education Ltd. 18-15

 Private Labels
• A private-label brand is a brand that retailers
and wholesalers develop
– Role of private labels
– Private-label success factors

Copyright © 2016 Pearson Education Ltd. 18-16

 Wholesaling
• Wholesaling
includes all the
activities in selling
goods or services to
those who buy for
resale or business
use

Copyright © 2016 Pearson Education Ltd. 18-17

 Major wholesaler types

Merchant Full-service
wholesalers wholesalers

Limited-
Specialized
service
wholesalers
wholesalers

Manufacturers’/
Brokers and
retailers’
agents
branches/offices

Copyright © 2016 Pearson Education Ltd. 18-18

 Wholesaler functions

• Selling and promoting • Transportation

• Buying and • Financing
assortment building • Risk bearing
• Bulk breaking • Market information
• Warehousing • Management services
and counseling

Copyright © 2016 Pearson Education Ltd. 18-19

 Market Logistics
• Supply chain
management (SCM)
• Market logistics
• Integrated logistics
systems (ILS)
• Lean manufacturing

Copyright © 2016 Pearson Education Ltd. 18-20

 Market logistics planning
1. Deciding on company’s value
proposition
2. Selecting best channel design and
network strategy
3. Developing operational excellence
4. Implementing solution

Copyright © 2016 Pearson Education Ltd. 18-21

 Market-Logistics Decisions
• Order processing: how should we handle
orders?
• Warehousing: where should we locate our
stock?
• Inventory: how much stock should we hold?
• Transportation: how should we ship goods?

Copyright © 2016 Pearson Education Ltd. 18-22

 Figure 18.1
Optimal Ordering Quantity

Copyright © 2016 Pearson Education Ltd. 18-23

 Transportation
• Containerization
– Piggyback,
fishyback,
trainship, and
airtruck
• Private vs. contract
vs. common carriers

Copyright © 2016 Pearson Education Ltd. 18-24

Copyright © 2016 Pearson Education Ltd. 18-25