Chapter 15 - Retailing, Direct Marketing, and Wholesaling PDF

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Chapter 15: Retailing, Direct Marketing, and Wholesaling ● Retailing: all transactions in which the buyer intends to consume the product through personal, family, or household use ● Retailer: an organization that purchases products for the purpose of reselling them to ultimate consumers ● Multichannel retailing: employing multiple distribution channels that complement their brick and mortar stores with websites, catalogs, and apps where consumers can research products, read other buyers’ reviews, and make actual purchases ● General-merchandise retailer: a retail establishment that ofers a variety of product lines that are stocked in considerable depth. The primary types of GMR are department stores, discount stores, convenience stores, supermarkets, superstores, hypermarkets, warehouse clubs, and warehouse showrooms. ● Department stores: large retail organizations characterized by a wide product mix and organized into separate departments to facilitate marketing eforts and internal management. ● Discount stores: self-service general-merchandise stores that ofer brand-name and private-brand products at low prices. Examples: Walmart and Target ● Extreme-value stores: retailers that are a fraction of the size of conventional discount stores and typically ofer very low prices on smaller size name-brand non-perishable household items. Examples: Dollar general, Dollar tree. Ofer very low per-unit prices.

● Convenience stores: a small self-service store that is open long hours and carries a narrow assortment of products, usually convenience items such as soft drinks, snacks, newspapers, tobacco, gasoline, as well as services such as ATM use. ● Supermarkets: Large, self-service stores that carry a complete line of food products, along with some nonfood products. A large portion of this industry has moved online, especially in large cities. ● Superstores: giant retail outlets that carry food and non-food products found in supermarkets, as well as most routinely purchased consumer products. Superstores combine features of discount stores and supermarkets. They also ofer additional services such as dry cleaning, automotive repair, check cashing, and bill paying ● Hypermarkets: stores that combine supermarket and discount store shopping in one location. All hypermarkets focus on low prices and vast selections. They are larger than superstores. ● Warehouse clubs: large-scale, members-only establishments that combine features of cash and carry wholesaling with discount retailing. They ofer the same types of products as discount stores but in a limited range of sizes and styles. Example: Costco ● Warehouse showrooms: retail facilities in large, low-cost buildings with large on-premises inventories and minimal services. They have 5 basic characteristics: large, low-cost buildings, warehouse materials-handling technology, vertical merchandise displays, large on-premise inventories, and minimal services. Example: IKEA ● Traditional speciality retailers: stores that carry a narrow product mix with deep product lines.

An example is Foot Locker, which ofers limited product lines but great depth within this product line. Specialty stores usually ofer better selections and more sales expertise than department stores, their main competitor. ● Category killer: a very large specialty store that concentrates on a major product category and competes on the basis of low prices and product availability. Examples are Home Depot and Lowe’s (home improvement), Staples (office supply), Petco and PetSmart (pet supplies), and Toys ‘R’ Us (toys). ● Of-price retailers: stores that buy manufacturers’ seconds, overruns, returns, and of season merchandise for resale to consumers at deep discounts. Of-price retailers ofer limited lines of national-brand and designer merchandise. Examples: TJ Maxx, Marshalls ● Neighborhood shopping centers: a type of shopping center usually consisting of several small convenience and specialty stores. Generally, product mixes consist of essential products, and depth of the product lines is limited. ● Community shopping centers: a type of shopping center with one or two department stores, some specialty stores, and convenience stores. Community shopping centers are planned, and retailer eforts are coordinated to attract shoppers. Such centers have wide product mixes and deep product lines. ● Regional shopping centers: a type of shopping center with the largest department stores, widest product mixes, and deepest product lines of all shopping centers.

● Super Regional shopping centers: a type of shopping center with the widest and deepest product mixes that attract customers from many miles away. Example: Mall of America in Minneapolis. This shopping center can also include aquariums, museums, a movie theater, etc. ● Lifestyle shopping center: a type of shopping center that is typically open air and features upscale speciality, dining, and entertainment stores. Example: Austin’s Domain ● Power shopping centers: a type of shopping center that combines of-price stores with category killers ● Retail positioning: identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of the consumers in that segment ● Atmospherics: the physical elements in a store’s design that appeal to customers’ emotions and encourage buying ○ Example: atmospherics can greatly infuence customers’ experiences. The colors, lighting, and spaciousness make Starbucks attractive and inviting. ● Category Management: a retail strategy of managing groups of similar, often substitutable, products produced by diferent manufacturers. ● Direct marketing: the use of telephone, internet, and nonpersonal media to introduce products to customers, who can then purchase them via mail, telephone, or the internet ● Non-store retailing: the selling of products outside the confnes of a retail facility. A form of direct marketing that can occur through online retailing, catalog marketing, direct-response marketing, telemarketing, and television home shopping.

● Online retailing: retailing that makes products available to buyers through computer connections ● Catalog marketing: a type of marketing in which an organization provides a catalog from which customers make selections and place orders by mail, telephone, or the internet ● Direct response marketing: a type of marketing in which a retailer advertises a product and makes it available through mail or telephone orders. Example: television commercials ofering exercise machines, cosmetics, or household cleaning products available through a toll free number. ● Telemarketing: the performance of marketing-related activities by telephone. Telemarketing can help to generate sales leads, improve customer service, speed up payments on past-due accounts, raise funds for non-proft organizations, and gather marketing data. ● Television home shopping: form of selling in which products are presented to television viewers, who can buy them by calling a toll free number and paying with a credit card. Example: QVC. This method is particularly popular among older consumers, who tend to be less comfortable with online shopping and are less mobile to physically go to a store. ● Direct selling: marketing products to ultimate consumers through face-to-face sales presentations at homes or in the workplace. ● Automatic vending: the use of machines to dispense products ● Franchising: an arrangement in which a supplier (franchiser) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration ○ It enables a franchisee to start a business with limited capital and beneft from the

business experience of others. ● Wholesaling: transactions in which products are bought for resale, for making other products, or for general business operations ● Wholesaler: an individual or organization that sells products that are bought for resale, for making other products, or for general business operations. Wholesaling activities are not limited to goods. ○ Wholesalers can establish information systems that help producers and retailers manage the supply chain from producer to consumer....