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SHH Kazmi, 2007
Excel BooksMarketing Management Text and Cases,S H H Kazmi19-1
Wholesaling and Retailing
Marketing Management Text and Cases
Excel Books19-1
Wholesaling
and Retailing
19Chapter
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Excel BooksMarketing Management Text and Cases,S H H Kazmi19-2
Wholesaling and Retailing
Wholesaling is concerned with the activities of individuals and establishments
that sell to retailers and other merchants, or to industrial, institutional, and
commercial users, but do not sell in large amounts to ultimate consumers.
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Wholesaling and Retailing
WholesalerFunctionsfor
Producers and
Customers
Functions for Producers Functions for Customers
Market Coverage. Product Availability.
Sales Contacts. Assortment Convenience.
Inventory Holding. Bulk-breaking.
OrderProcessing. Credit Facility and Finance.
Market Information. CustomerService.
CustomerSupport. Technical Support.
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Wholesaling and Retailing
Major Types of Wholesalers
1. merchant wholesaler,
2. agents and brokers, and
3. manufacturerssales branches andoffices.
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Merchant Wholesalers
These are independent businesses that take title to goods and assumerisks
associatedwithownership and generally buy andresellproducts to industrial
orretailcustomers.
They aredivided into twosubtypes:
full-service and
limited-servicewholesalers.
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Wholesaling and Retailing
Full-Service Merchant Wholesalers
General merchandisewholesalers
Industrialdistributors
Limitedline-wholesalers
Speciality-linewholesalers
Rack jobbers
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Wholesaling and Retailing
Limited-Service Merchant Wholesalers
Cash-and-carry
Truckwholesalers
Drop-shippers
Mail-orderwholesalers
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Wholesaling and Retailing
Agents and Brokers
Agents and brokersform thesecond majorcategory ofwholesalers.They
negotiatepurchase andspeedupsales but do not take title to merchandise.
They perform fewerservicesforproducers andworkon commission, generally
basedon product price.Agents represent buyersorsellerson an almostpermanent basis.Brokers areemployed torepresent buyersorsellers
temporarily.
Manufacturers Agents:
Asell
ing agent
Commission merchants
Export or import
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Wholesaling and Retailing
Manufacturers Sales Branches and OfficesManufacturersset up Sales branches andoffices to improveselling, promotion,
and inventory control.Sales branches carry inventory andprovidesupport
services to manufacturerssalesforce, particularly in areaswithconcentration
oflargecustomers andconsiderabledemand.Sales offices do not carryinventory andoperate muchlike agents and in addition to manufacturers
products may sellothercomplimentary productsproduced by otherfirms.
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Excel BooksMarketing Management Text and Cases,S H H Kazmi19-10
Wholesaling and Retailing
RetailingA retaileris a business andcan be an individual, chain store, departmental
store, supermarket, speciality store, smalllocality shop,paan-bidikiosk, or
a serviceretaileretc., wholinks theproducers and thefinalconsumer.
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Wholesaling and Retailing
TheWheelofRetailing
Vulnerability phase Entry phase
Topheaviness
Conservatism
Declining ROI
Trading-upphase
Becomes
Lowprice
Low marginPoorfacilities
Lowstatus
Limitedproducts
Up-market location
Fashion orientation
Extended assortment
Higherprices
Elaboratefacilities
Exoticservices
Becomes
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Wholesaling and Retailing
Functions of Retailers Arranging Assortment
Breaking Bulk
Holding Stock
Channel ofCommunication
Promotional Support
Extending Services
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Wholesaling and Retailing
Major Types of Retail StoresVariousschemeshave been proposed tocategoriseretailers basedon (a)
numberofoutlets, (b) margin vs turnover, (c) location, and (d) size.
An independent store is a singleretailunit owned by an individual, partnership,
orcorporation. A retailchain store is a part ofa multipleretailoutlet business.
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1. General Merchandise RetailersGeneral merchandiseretailerscarry a variety ofproduct lines, withconsiderable
depth. Some majortypesof thesestores includesupermarkets and
hypermarkets, discount stores, anddepartment stores.
Supermarkets:A supermarket is a largeself-serviceretailstore that carriesa wide variety ofconsumerproductsunderoneroof, such ascompleteline
offoodproducts, laundry requirements, household maintenance items, and
OTCornon-prescription drugsetc.
DiscountStore: Thesestores areself-service, standard general
merch
and
ise
re
tailers
re
gul
arly
offering b
ran
dnam
ean
dpr
ivate
bran
dit
em
sat lowprices, earn lowermargins, andpushforhighsales turnover.
DepartmentStores:A department store islargeretailstoreorganised into
severaldepartments, offering a broad variety anddepthofproduct lines.
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2. Speciality Stores
Speciality storescarry a narrowproduct mix anddeepproduct lines.
Speciality Retail Stores
Off-Price Retailers
Category Killers
3. Shopping Malls
4. Retail Chains
5. Non-Store Retailing
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Target Market and Store Location
Identifying target market isessential todetermine allotheraspectsof
retailing decisions, such aslocation, merchandise mix, pricing, store
atmospherics, promotionalefforts, andlevelofservice. Location decision is
quitesignificant because it dictates the area ofcustomercoverage and it is
theleast flexiblestrategic issue.
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Merchandise Variety and Assortment
Merchandise variety generally means breadthofproduct lines and
assortment refers todifferent models in thesameordifferent brands in a
category.
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Store Image and Atmospherics
Thiswouldrequireproperlocation, consideration oftrafficcongestion, exterior
storefront appearance, display windows, andentranceetc.
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Wholesaling and Retailing
Services, Price, and PromotionService mix includespre-purchase, andpost-purchaseservices, such as
accepting customersorderson telephoneorby mail, advertising and
promotions, helpfulsalespersonnel, gift-wrapping, delivery, returns,
installations, extending credit, andrepairsetc.
Price is also a criticaldifferentiating factorand needs to becarefully
determined in relation to target customers, the natureofproduct mix, desired
levelofservice, andwhat kindofcompetition exists and anticipated.