Chapter 17

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C H A P T E R

Retailing and Multichannel Marketing

17

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17-2

L E A R N I N G O B J E C T I V E S

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Discuss the four factors manufacturers should consider as they develop their strategy for working with retailers.

Outline the considerations associated with choosing retail partners.

List the three levels of distribution intensity.

Describe the various types of retailers.

Describe the components of a retail strategy.

Identify the benefits of stores.

Identify the benefits of multichannel retailing.

Detail the challenges of multichannel retailing.

Retailing and Multichannel Marketing

LO1

LO2

LO3

LO4

LO5

LO6

LO7

LO8

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Factors for Establishing a Relationship with Retailers

Managing a multichannel

strategy

Developing a retail

strategy

Identifying types of Retailers

Choosing retailing partners

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Choosing Retail PartnersChannel Structure

Degree of vertical integration

Manufacturers brand

Power of manufacturer and

retailer©M Hruby

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Choosing Retail PartnersCustomer Expectations

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Choosing Retail PartnersDistribution Intensity

Intensive

Exclusive

Selective©

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CHECK YOURSELF

1. What issues should manufacturers consider when choosing retail partners?

2. What is the difference between intensive, exclusive, and selective levels of distribution intensity?

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Types of Retailers

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Food Retailers

Supermarket SupercenterWarehouse

ClubConvenience

Store

Limited nonfoodIncludes discount store

Limited assortment

Limited variety

Differentiates different types of foods

Wal-Mart, Meijer, K-Mart, Target

Little serviceIncludes:Costco, Sams, BJ’s

Good locations

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General Merchandise Retailers

• Broad variety and deep assortmentDepartment Stores

• Broad variety at low pricesFull-line Discount

• Limited merchandise with service in small storeSpecialty

• Specialty for pharmaceutical and heathDrugstores

• Discount with narrow but deep assortmentCategory Specialist

• Full line, limited, very low pricesExtreme value

• Inconsistent assortment of brand name at low pricesOff-Price

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Services Retailers

Firms that primarily sell services rather than

merchandise, are a large and growing part of the

retail industry

Ryan McVay/Getty Images

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1. What strategies distinguish the different types of food retailers?

2. What strategies distinguish the different types of general merchandise retailers?

3. Are organizations that provide services to consumers considered to be retailers?

CHECK YOURSELF

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Developing a Retail Strategy Using the Four P’s: Product

Providing the right mix of merchandise and services

AP Photo/David Kohl

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Benefits of Stores for Consumers

Browsing

Touching and Feeling

Personal Service

Cash and Credit

Entertainment and Social Interaction

Instant Gratification

Risk Reduction

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Benefits of the Internet and Multichannel Retailing

Deeper and Broader Selection

Personalization

Gain Insights into Consumer Shopping Behavior

Increase Customer Satisfaction and Loyalty

Expand Market Presence

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Effective Multichannel Marketing

Integrated CRM

Brand Image

Pricing Supply Chain

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1. What are the components of a retail strategy?

2. What are the advantages of traditional stores versus Internet-only stores?

3. What challenges do retailers face when marketing their products through multiple channels?

CHECK YOURSELF

17-18

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Category specialists are discount stores that offer a narrow but deep assortment of merchandise.

Glossary

17-19

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Convenience stores provide a limited variety and assortment of merchandise at a convenient location in 2,000-3,000 square foot stores with speedy checkout.

Glossary

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A conventional supermarket is a self-service food store offering groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise.

Glossary

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Department stores are retailers that carry a broad variety and deep assortment, offer customer services, and organize their stores into distinct departments for displaying merchandise.

Glossary

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Drugstores are specialty stores that concentrate on pharmaceuticals and health and personal grooming merchandise.

Glossary

17-23

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An exclusive distribution policy is when manufacturers grant exclusive geographic territories to one or very few retail customers so no other customers in the territory can sell a particular brand.

Glossary

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Extreme value retailers are small, full-line discount stores that offer a limited merchandise assortment at very low prices.

Glossary

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Full-line discount stores are retailers that offer a broad variety of merchandise, limited service, and low prices.

Glossary

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An intensive distribution strategy is designed to get products into as many outlets as possible.

Glossary

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Multichannel retailers are retailers that use some combination of stores, catalogs, and the Internet to sell merchandise.

Glossary

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Off-price retailers offer an inconsistent assortment of brand name merchandise at low prices.

Glossary

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Selective distribution uses a few selected customers in a territory.

Glossary

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Specialty stores concentrate on a limited number of complementary merchandise categories and provide a high level of service in relatively small stores.

Glossary

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Supercenters are large stores that combine a supermarket with a full-line discount store.

Glossary

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Warehouse clubs are large retailers that offer a limited and irregular assortment of food and general merchandise with little service at low prices for ultimate consumers and small businesses.

Glossary