Principles of marketing: Lecture 30

MGT301
Principles of Marketing
Lecture­30


Summary
of  
Lecture­29


Producer

Marketing
activities

Intermediaries

Demand
End users

Demand

Push Strategy
Marketing activities

Producer

Demand

Intermediaries

Demand

End users

Pull Strategy


Marketing Logistics and Supply Chain 
Management


Functions of Logistics Systems


Costs
Costs

Minimize
MinimizeCosts
Costsof
of
Attaining
AttainingLogistics
Logistics
Objectives
Objectives

Order
Order Processing
Processing

Submitted
Submitted
Processed
Processed
Shipped
Shipped

Logistics

Transportation
Water, Truck,
Rail, Pipeline & Air

Functions

Warehousing
Warehousing
Storage
Storage
Distribution
Distribution

Inventory
Inventory

When
Whento
toorder
order
How

How much
muchto
toorder
order
Just-in-time
Just-in-time


Today’s Topics

Retailing and Wholesaling
Retailing


Retailing is the process by which goods and 
services are sold to consumers for their personal 
use.


Retailers provide many benefits such as:
providing an assortment of merchandise under one roof,
allowing access to goods customers might never see,
providing interesting environments in which to spend our 
leisure time.


Retailing can be done in stores (store retailing) or out of 
a store (nonstore retailing) such as:
 Direct mail,
 Catalogs,

 Telephone,
 Home shopping shows, 
 Internet.


“...all activities involved in selling, renting, and 
providing goods and services to ultimate 
consumers for personal, family or household 
use.”
­Berkowitz et al


Classification of Retailing


Amount
Amount of
of Service
Service
Self-Service,
Self-Service, Limited-Service
Limited-Service and
and
Full-Service
Full-Service Retailer
Retailer
Product
Product Line
Line
Length

Length and
and Breadth
Breadth of
of the
the Product
Product
Assortment
Assortment
Relative
Relative Prices
Prices
Pricing
Pricing Structure
Structure that
that is
is Used
Used
by
by the
the Retailer
Retailer
Retail Organizations
Independent, Corporate, or Contractual
Ownership Organization


Amount of Service
Self-Service
Retailer

Limited-Service
Retailers

Provide Few or No
Services to
Shoppers

Provide Only a Limited
Number of Services
to Shoppers

Full-Service
Retailers
Retailers that Provide a
Full Range of Services
to Shoppers


Product Line
Specialty Stores

Narrow Product Line, Deep Assortment

Department Stores

Wide Variety of Product Lines i.e.
Clothing, Home Furnishings

Supermarkets

Wide Variety of Food, Laundry, &
Household Products

Convenience Stores

Limited Line of High-Turnover
Convenience Goods

Superstores

Large Assortment of Routinely
Purchased Food & Nonfood Products

Discount Stores

Standard Merchandise at Lower Prices

Off-Price Retailers

Changing Collection of Higher-Quality
Goods at a Reduced Price

Warehouse Clubs

Limited Selection of Brand-Name
Grocery Items, Appliances



Relative Prices

Discount
Discount
Stores
Stores

“Off-Priced”
“Off-Priced”
Retailers
Retailers

Catalog
Catalog
Showrooms
Showrooms


Retail Organization
Corporate
Chains

Retailers
Retailers
wanting
wanting economies
economies
of
of scale
scale

Corporate
Chains

Franchise

Operations
Retailers
Retailers
wanting
wanting economies
economies
of
of scale
scale


Corporate
Chains

Franchise
Operations
Retailers
Retailers
wanting
wanting economies
economies
of
of scale
scale

Voluntary
Chains

Cooperative
Chains



The Wheel of Retailing 

High Margin
High Price
High Status

Older Store

Young
Young
Store
Store

Brand
Brand New
New Store
Store

Low Margin
Low Price
Low Status

Nonstore Retailing


Mail
MailOrder
Order
••Catalogs
Catalogs--from
fromclothing
clothingto
tocomputers
computers
••Direct
DirectMail
Mail--brochure
brochureoffering
offeringaaproduct
product
or
orservice
serviceat
atone
onepoint
pointin
intime.
time.

Direct
DirectSelling

Selling
••Door-to-Door
Door-to-DoorSales
Sales--declining
decliningin
inU.S.
U.S.
••Parties
Parties&&Networks
Networks--presentations
presentations
••Telemarketing
Telemarketing--over
overthe
thephone
phone
Automatic
AutomaticVending
Vending
Best
suited
to
inexpensive
•• Best suited to inexpensivemerchandise
merchandise
and
andfood
foodand
andbeverages.
beverages.

Direct
DirectResponse
ResponseTelevision
Television
••Home
HomeShopping
ShoppingNetworks
Networks--TV
TVchannels
channels
that
thatsell
sellproducts
products


Retailer’s Product Assortment and 
Services Decisions