Retailers, wholesalers, strategy planning
Wholesalers and retailers - links in channel system.
Consumers - shop at retail stores. Wholesaling - outside view of most consumers.
Retailing: all activities involved in the sale of products to final consumers.
Service retailing - retailer is also the producer.
Reasons for buying from a retailer - retailer’s whole offering—assortment of goods, advice from salesclerks, convenience, and other factors—is its product. Ie: advice from salespeople, assortment of services, convenient parking, width and depth of product assortment
¾ of new retailing ventures fail during the first year
1. Features of a retailer’s offering - economic needs:
a. Convenience: convenience in retail outlets.
b. Product Selection: customers want a choice of assortment and quality.
c. Fairness in Dealings: is honest.
d. Helpful Information: Knowledgeable salesple, displays, demonstrations, product info.
Prices. weigh the value offered; varied through credit terms, special discounts.
2. Features of a retailer’s offering - social or emotional needs:
a. Social Image: status, prestige, or a feeling of “fitting in.”
b. Shopping Atmosphere: Comfort, safety, excitement, relaxation, sounds, smells. each can be a source of competitive advantage. relate to segmentation and positioning, different strategies. individual consumers have different economic and emotional needs.
Conventional Stores:
1. General stores: stores that carried anything they could sell in reasonable volume.
2. Single-line or limited-line stores: specialize by product area and offer a wide assortment in that area. Stock some slow-moving items in order to satisfy the store’s target market - costly. Many are small, with high expenses relative to sales, usually believe in a "buy low and sell high" philosophy, most conventional retailers are single- or limited-line stores.
a. Specialty shop: conventional limited-line store; known for distinctiveness of product assortment and the special services they offer.
The "Fashion Place" carries a carefully selected and distinctive assortment of traditional women's business clothing and accessories for upper-class executives in Boston. It emphasizes customer service with its well-trained salesclerks.
Price and service - often related—more service usually means higher prices and vice versa. shoppers place emphasis on service and assortment depth than on assortment width.
Specialty shops usually sell shopping products, and focus on a narrow target market with better service, knowledgeable salespeople, and a unique assortment.
b. Department stores: lgr stores organized into separate departments, offer many product lines. combine many limited-line stores and specialty shops.
Specialty shops, dpmt stores – specialized retailers providing lg assortments and service.
Mass-merchandising concept. retailers should offer low prices for faster turnover and greater sales volume. The idea underlying the mass-merchandising concept is that a big profit on each item sold won't earn much if sales volume is low.
1.Supermarkets: lg stores specializing in groceries - self-service and wide assortments. Survival is based on efficiency—high volume and low costs. First retailers that showed importance of mass-merchandising concept. Introduced self-service to reduce costs, newer SMs carry 40,000 product items, average sales - $17 million annually, started as an experiment during the Depression.
2. Mass-merchandisers are more than discounters: large, self-service stores with many departments that emphasize “soft goods” and staples, with low prices and lower margins to get faster turnover. lead the way in streamlining distribution with technology. Most of their growth today comes from international expansion. Facing declining profits
Some SMs and mass-merchandisers moved toward supercenters (hypermarkets): very large stores - carry groceries, services, non-food items - concerned with providing
