Kotler Pom18 PPT 13

Principles of Marketing
Eighteenth Edition, Global Edition
Chapter 13
Retailing and Wholesaling
Copyright © 2021 Pearson Education Ltd.

UNIQLO: The Innovative Route in
Fashion Retailing
UNIQLO positions itself as the
world’s only “lifewear” brand,
which means everyday clothes
that are high quality,
fashionable, affordable, and
comfortable.
In a growing global environment

in which cheap can also mean
chic and feeling good, UNIQLO
has found the best cut in fabric.

Learning Objectives
13.1 Explain the role of retailers in the distribution channel
and describe the major types of retailers.
13.2 Discuss how retailers are using omni-channel retailing
to meet the cross-channel shopping behavior of
today’s digitally connected consumers.
13.3 Describe the major retailer marketing decisions.
13.4 Discuss the major trends and developments in
retailing.
13.5 Explain the major types of wholesalers and their
marketing decisions.

Learning Objective 1
Explain the role of retailers in the distribution channel and
describe the major types of retailers.

Retailing (1 of 2)
Retailing includes all the activities in selling products or
services directly to final consumers for their personal,
nonbusiness use.
Retailers are businesses whose sales come primarily from
retailing.
Shopper Marketing focuses the entire marketing process
on turning shoppers into buyers as they approach the point
of sale, whether during in-store, online, or mobile shopping.

Retailing (2 of 2)
Omni-channel retailing creates a seamless cross-channel
buying experience that integrates in-store, online, and mobile
shopping, creating a single shopping experience.
The new retailing model: Digital technologies have caused a
massive shift in how and where people buy. Today’s retailers must
adopt omni-channel retailing that integrates in-store, online, and
mobile shopping.

Types of Retailers (1 of 8)
Amount of Service Classifications
• Self-service
• Limited service
• Full service

Product Line Classifications
• Specialty stores
• Department stores
• Convenience stores
• Superstores
• Category killers

Relative Price Characteristics
• Discount stores
• Off-price retailers
• Factory outlets
• Warehouse clubs

Table 13.2 Major Types of Retail Organizations
Type Description Examples
Corporate Two or more outlets that are commonly owned Macy’s (department stores),
chain and controlled. Corporate chains appear in all Target (discount stores), Kroger
types of retailing but they are strongest in (grocery stores), CVS
department stores, discount stores, food stores, (drugstores)
drugstores, and restaurants.
Voluntary Wholesaler-sponsored group of independent Independent Grocers Alliance

chain retailers engaged in group buying and (IGA), Western Auto (auto
merchandising. supply),
True Value (hardware)
Retailer Group of independent retailers who jointly Associated Grocers (groceries),
cooperative establish a central buying organization and Ace Hardware (hardware)
conduct joint promotion efforts.
Franchise Contractual association between a franchisor (a McDonald’s, Subway, Pizza Hut,
organization manufacturer, wholesaler, or service Jiffy Lube, Meineke Mufflers,
organization) and franchisees (-independent 7-Eleven
businesspeople who buy the right to own and
operate one or more units in the franchise
system).

Organizational Approach
Corporate chains are two or more outlets that are

commonly owned and controlled.
• Size allows them to buy in large quantities at lower prices
and gain promotional economies
– Macy’s
– CV S

Voluntary chains are wholesale-sponsored groups of

independent retailers that engage in group buying and
common merchandising.
• IGA
• Western Auto
• True Value

Retailer cooperatives are a group of independent retailers

that band together to set up a joint-owned, central wholesale
operation and conduct joint merchandising and promotion
efforts.
• Ace Hardware
• Associated Grocers

Organizational Approach Franchising covers a lot more than just
burger joints and fitness centers.
Franchises are contractual
Century 21 consists of over 127,000
associations between a manufacturer,
independent agents working in more
wholesaler, or service organization (a
than 9,400 franchise offices in 80
franchisor) and independent business
countries.
people (franchisees) who buy the right
to own and operate one or more units in
the franchise system.

Discuss how retailers are using omni-channel retailing to
meet the cross-channel shopping behavior of today’s digitally
connected consumers.

Omni-Channel Retailing
The key to omni-channel retailing is to integrate channels for a
seamless buying experience.
Omni-channel retailing: Used-car giant CarMax makes the entire
used-car buying experience simple and seamless across its digital
and store shopping channels.

Describe the major retailer marketing decisions.

Retailer Marketing Decisions (1 of 7)
Figure 13.1 Retailer Marketing Strategies

Segmentation targeting, differentiation, and positioning involve the
definition and profile of the market so the other retail marketing decisions
can be made.
Retail targeting and positioning: Lush Fresh Handmade Cosmetics
succeeds by carefully positioning itself away from its larger competitors.
It makes premium beauty products made by hand from the freshest
possible natural ingredients.

Major product variables: Experiential retailing: adidas’s stadium-
• Product assortment like flagship store on Fifth Avenue in
New York City carries about every
• Services mix
product that adidas offers. But the
• Store atmosphere store focuses as much on offering
customer experiences as on selling
products.

Price Decision
Price policy must fit the target market and positioning,

product and service assortment, competition, and economic
factors.
• High markup on lower volume
• Low markup on higher volume

Price Decision
Everyday low pricing (EDL P) involves charging constant,

everyday low prices and offering few sales or discounts.
High-low pricing involves charging higher prices on an
everyday basis, coupled with frequent sales and other price
promotions.

Promotion Decision
• Advertising
• Personal selling
• Sales promotion
• Public relations
• Direct marketing

Place Decision
Central business districts are located in cities and include

department and specialty stores, banks, and movie theaters.
A shopping center is a group of retail businesses planned,
developed, owned, and managed as a unit.

Discuss the major trends and developments in retailing.

Retailing Trends and Developments
(1 of 6)
Tighter Consumer spending Value positioning: To attract today’s
more value-oriented consumers,
• Changed consumer spending
T G I Friday offers Fridays 5, “a
patterns
selection of delicious drinks and
• Some retailers benefit appetizers, all for $5 each…
• Other retailers have tough times whenever you want.”.

(2 of 6)
New Retail Forms, Shortening Retail Life Cycles, and
Retail Convergence
Retail convergence involves the merging of consumers,

producers, prices, and retailers, creating greater competition
for retailers and greater difficulty differentiating offerings.

(3 of 6)
The Rise of Megaretailers
The rise of megaretailers involves the rise of mass
merchandisers and specialty superstores, the formation of
vertical marketing systems, and a rash of retail mergers and
acquisitions.
• Superior information systems
• Buying power
• Large selection

(4 of 6)
Growing Importance of Retail Technology
Retail technology provides

better forecasts, inventory
control, electronic ordering,
transfer of information,
scanning, online transaction
processing, improved
merchandise handling
systems, and the ability to
connect with customers.
Retail technology: “If you want to glimpse

the future of retail, check out an Amazon
Go store.”

(5 of 6)
Green Retailing
Environmentally Sustainable Practices

• Store design, construction, operations
• Product assortment
• Recycling made easier
• Package and distribution

(6 of 6)
Global Expansion of Major Retailers
• Retailers with unique formats and strong brands in other

countries
• U.S. behind Asian and European companies in global
expansion
• Challenges in meeting needs of local markets

Explain the major types of wholesalers and their marketing
decisions.

Wholesaling (1 of 15)
Wholesaling includes all activities involved in selling goods
and services to those buying for resale or business use.
• Selling and promoting

• Buying and assortment building
• Bulk breaking
• Warehousing
• Transportation

Wholesaling includes all activities involved in selling goods
and services to those buying for resale or business use.
• Financing
• Risk bearing
• Market information
• Management services and advice

Selling and promoting involves the wholesaler’s sales
force helping the manufacturer reach many small customers
at a low cost.
Buying and assortment building involves the selection of
items and building of assortments needed by customers,
saving the customers work.

Bulk breaking involves the wholesaler buying in large
quantities and breaking into smaller lots for customers.
Warehousing involves the wholesaler holding inventory,
reducing its customers’ inventory cost and risk.

Transportation involves the wholesaler providing quick
delivery due to its proximity to the buyer.
Financing involves the wholesaler providing credit and
financing suppliers by ordering early and paying on time.

Risk bearing involves the wholesaler absorbing risk by
taking title and bearing the cost of theft, damage, spoilage,
and obsolescence.
Market information involves the wholesaler providing
information to suppliers and customers about competitors,
new products, and price developments.

Management services and advice involves wholesalers helping
retailers train their sales clerks, improve store layouts, and set up
accounting and inventory control systems.
Wholesaling: Many of the nation’s largest and most important
wholesalers—like Grainger—are largely unknown to final consumers.
But they are very well known and much valued by the business
customers they serve.

Types of Wholesalers
• Merchant wholesalers
• Brokers and agents
• Manufacturers’ and retailers’ branches and offices

Merchant wholesalers are the largest group of wholesalers

and include:
• Full-service wholesalers that provide a full set of services
• Limited service wholesalers that provide few services and
specialized functions

Brokers and agents do not take title, perform a few

functions, and specialize by product line or customer type.
• Brokers bring buyers and sellers together and assist in
negotiations.
• Agents represent buyers or sellers.

Manufacturers’ and retailers’ branches and offices are a

form of wholesaling by sellers or buyers themselves, rather
than through independent wholesalers.

Figure 13.2 Wholesaler Marketing Strategies

Wholesaler Marketing Decisions
Segmentation, targeting, differentiation, positioning

decisions:
• Size of customer
• Type of customer
• Need for service

Wholesaler Marketing Decisions
Marketing mix decisions

• Product
• Price
• Promotion
• Place

Trends In Wholesaling
• Need for greater efficiency

• Value-adding customer relationships
• Increase in customer demand for services
• Increase in use of technology to boost productivity

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Principles of Marketing

Eighteenth Edition, Global Edition

Copyright © 2021 Pearson Education Ltd.

In a growing global environment

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Voluntary Wholesaler-sponsored group of independent Independent Grocers Alliance

Copyright © 2021 Pearson Education Ltd.

Corporate chains are two or more outlets that are

Copyright © 2021 Pearson Education Ltd.

Voluntary chains are wholesale-sponsored groups of

Copyright © 2021 Pearson Education Ltd.

Retailer cooperatives are a group of independent retailers

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Price policy must fit the target market and positioning,

Copyright © 2021 Pearson Education Ltd.

Everyday low pricing (EDL P) involves charging constant,

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Central business districts are located in cities and include

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Retail convergence involves the merging of consumers,

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Retail technology provides

Retail technology: “If you want to glimpse

Copyright © 2021 Pearson Education Ltd.

Environmentally Sustainable Practices

Copyright © 2021 Pearson Education Ltd.

• Retailers with unique formats and strong brands in other

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

• Selling and promoting

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Copyright © 2021 Pearson Education Ltd.

Merchant wholesalers are the largest group of wholesalers

Copyright © 2021 Pearson Education Ltd.

Brokers and agents do not take title, perform a few