Chapter 11 - Lecture notes 11 PDF

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Chapter 11 Retailing: All the activities involved in selling goods or services directly to consumers for their personal use Retailer: Business whose sales come primarily from retailing Shopper marketing: Focusing the entire marketing process toward turning shoppers into buyers as they approach the point of sale Omni-Channel Retailing is creating a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping Types of Store Retailers classification can be based on ● Amount of service offered ○ Self-service retailers: Serve customers who are willing to perform their own locate-compare-select process ○ Limited-service retailers: Carry more shopping goods about which customers need information and provide more sales assistance ○ Full-service retailers: Carry more specialty goods and assist customers in every phase of the shopping process ● Breadth and depth of the product lines ○ Specialty store: A retail store that carries a narrow product line with a deep assortment within the line ○ Department store: A retail store that carries a wide variety of product lines, each operated as a separate department managed by specialist buyers or merchandisers ○ Supermarket: A large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of grocery and household products ○ Convenience store: A small store, located near a residential area, that is open long hours seven days a week and carries limited line of highturnover convenience goods ● Relative prices charged ○ Discount Store: A retail operation that sell standard merchandise at lower prices by accepting lower margins and selling at a higher volume ○ Off-Price Retailer: A retailer that buys at less-than-regular wholesale prices and sells at less than retail ○ Independent Off-Price Retailer: An off-price retailer that is independently owned and operated or a division of a larger corporation ○ Factory Outlet: An off-price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturer’s surplus, discontinued, or irregular goods ○ Warehouse club: An off-price retailer that sells a limited selection of brand name grocery items, appliances, clothing, and other goods at deep discounts to members who pay annual membership fees ● Way they are organized ○ Corporate Chains: Two or more outlets that are commonly owned and controlled ○ Voluntary Chain: Wholesaler-sponsored group of independent retailers engaged in group buying and merchandising. ○ Retailer Cooperative: Group of independent retailers who jointly

establish a central buying organization and conduct joint promotion efforts. ○ Franchise Organization: Contractual association between a franchisor (a manufacturer, wholesaler, or service organization) and franchisees (independent businesspeople who buy the right to own and operate one or more units in the franchise system) Omni-Channel Retailing: Blending In-Store, Online, Mobile, and Social Media Channels ● In this age of websites, smartphones, mobile apps, social media, and other things digital—shopping typically involves a dazzling array of channels and platforms. ● Omni-channel consumers readily research products and prices online, shop digitally from home, from work, in stores, or anywhere in between. ● The boundaries between in-store and online retailing are rapidly blurring. ● Online retail in Canada still accounts for only a fraction of all retail, but it is growing faster than in-person ● Omni-channel retailing involves more than just researching and purchasing ○ Buy online, return in person to bricks-and-mortar store ○ Order online, pickup in person, no shipping fees ○ Keeping shopping lists on retailers’ mobile apps ○ Receiving exclusive offers/coupons ○ Using smart phone to find items in-store Retailer Marketing Strategies

Segmentation, Targeting, Differentiation, and Positioning Decisions ● Target markets must be segmented and defined. ● Retailers then decide how to differentiate and position themselves in those markets. ● Until segments are defined & profiled, it’s hard to make consistent decisions about:

○ Product assortment, pricing, service level ○ Advertising, store décor, ○ Online and mobile site design Product Assortment should differentiate the product while matching target shoppers’ expectations Services Mix can help set one retailer apart from another Store’s Atmosphere is where retailers want to create a unique store experience, one that suits all the target market and moves customers to buy Price Policy must fit the retailers ● Target market ● Product and service assortment ● Competition ● Economic factors Everyday Low Pricing (EDPL) is where retailers charge constant, everyday low prices with few sales or discounts High-Low Pricing is where retailers charge higher prices on an everyday bases with frequent sales and price promotions Promotion Decisions are made using various combinations of promotional tools ● Advertising ● Personal selling ● Sales promotion ● PR ● Direct and social media marketing Place Decision sees that locations should be accessible to the target market in areas that are consistent with the retailer’s positioning Shopping Centre is a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit Tighter Consumer Spending ● The impact of the recession caused a change in consumer spending patterns, consumers became value-seeking ● Impact on retailers has lead to ○ Cost-cutting, price promotions, bankruptcy ○ New value pitches in positioning ○ Some retailers already positioned on ‘value’ benefitted New Retail Forms, Shortening Retail Life Cycles, and Retail Convergence ● Established retailers experimenting with ‘pop-up’ stores ● Online stores using ‘flash sale’ Rise of Megaretailers ● Offer better merchandise selections, good service, and strong price savings to consumers ● Shifted balance of power between retailers and consumers Growth of Direct, Online, Mobile, and Social Media Retailing ● Availability of a variety if non-store alternatives Growing Importance of Retail Technology

● Produce better forecasts ● Control inventory costs ● Interact digitally with suppliers ● Send information between stores ● Sell to customers within stores ● Increased use of surveillance technologies Green Retailing ● Promoting more environmentally responsible products ● Launching programs to help customers be more responsible ● Working with channel partners to reduce their environmental impact Global Expansion of Major Retailers ● Escaping saturated home markets Impact of Covid-19 ● Many retailers gone bankrupt and others headed in that direction ● Overnight shift in what consumers want ○ Toilet paper, computer cameras & headsets, comfy clothes to work in from home ○ Rekindling of home production – bread making, gardening, preserving food ● If companies switch permanently to working from home, what will happen to retail stores located near major employers (downtown, industrial parks) Wholesaling includes all the activities involved in selling goods and services to those buying for resale or business use Wholesaler is a firm engaged primarily in wholesaling activities Channel Functions Performed by Wholesalers ● Selling and promoting ● Buying and assortment building ● Bulk breaking ● Warehousing ● Transportation ● Financing ● Risk bearing ● Market information ● Management services and advice Merchant Wholesaler is an independent owned wholesale business that takes titles to the merchandise it handles ● Full-Service Wholesaler provide a full set of services ● Limited-Service Wholesaler offer fewer services to their suppliers and customers Broker is a wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation Agent is a wholesaler who represents the buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title of goods

Manufacturers’ and Retailers’ Branches and Offices are wholesaling by sellers or buyers themselves rather than through independent wholesalers

Wholesaler Marketing Strategies

Trends in Wholesaling ● Need for greater efficiency ● Demands for lower prices ● Sorting out suppliers who are not adding value based on cost and quality ● Blurring distinction between large retailers and wholesalers ● Increased use of technology to contain costs and boost productivity...