Stephen Ginns --- 4nov09 --- Slide 1 of 35 Managing Retailing, Wholesaling, and Logistics Marketing Management, European ed Lecture 8 Place
Stephen Ginns --- 4nov09 --- Slide 1 of 35
Managing Retailing, Wholesaling, and Logistics
Marketing Management, European ed
Lecture 8
Place
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Chapter Questions
• What major types of marketing intermediaries occupy this sector?
• What marketing decisions do these marketing intermediaries make?
• What are the major trends with marketing intermediaries?
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Retailing
“Includes all the activities involved inselling goods or services directlyto final consumers for personal,
non-business use.”
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Company-to-Consumer Channels
Company
Indirect Direct
Telephone Mail ElectronicPersonal Selling
Wholesaler/Distributor
Broker/Rep
Retailer or Dealer
Customer
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Major Retailer Types
• Speciality store - Maplin
• Department store – John Lewis
• Supermarket - Sainsbury
• Convenience store - Londis
• Discount store - Aldi• Off-price retailer -
TKMaxx• Superstore – Tesco
Bar Hill• Catalogue showroom
- Argos
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Levels of Retail Service
Self-service - they even get you to scan the barcodes on your purchases!
Self-selection
Limited service
Full service
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Retail Positioning Map
TescoHarrod’s
AldiCarphone Warehouse
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Indicators of Sales Effectiveness (KPIs)
• Number of people passing by location
• Percentage who enter store
• Percentage of those who enter who also buy
• Average amount spent per sale.
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Trends in Retailing
• New retail forms and combinations- eg coffee bar in a bookshop
• Growth of intertype competition• Competition between store-based and non-store-
based retailing (eg the Internet)• Growth of giant retailers• Decline of middle market retailers – eg Woolworth, Debenhams, House of Fraser
• Growing investment in technology, Lean Thinking• Global presence of major retailers• Ebay and other Internet providers.
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Nonstore Retailing
Direct
selling
Buying
service
Automatic
vending
Direct
marketing
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Characteristics of Franchises
• The franchisor owns a trade or service mark and licenses it to franchisees in return for royalty payments
• The franchisee pays for the right to be part of the system
• The franchisor provides its franchisees with a system for doing business
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Retailers’ Marketing Decisions
Target market
Product assortment
Procurement
Prices
Services
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Retailers’ Marketing Decisions (cont.)
Store atmosphere
Store activities
Communications
Locations
Selfridge’s store in Birmingham
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Selfridge’s store in Birmingham
Retailers’ Marketing Decisions (cont.)
General business districts
Regional shopping centres
Community shopping centers
Retail Parks
Community shopping centres
Retail Parks
Location within a larger store.
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Wholesaling Functions
• Selling and promoting
• Buying and assortment building
• Bulk breaking• Warehousing
• Transportation• Financing• Risk bearing• Market information• Management
services and counseling
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Major Wholesaler Types
Merchant
Full-service
Limited-service
Brokers and agents
Manufacturers
Specialized Nisa-Today’s warehouse - Scunthorpe
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Logistics
“That part of the supply chain process that plans, implements and controls the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption in order to meet customers’ requirements”
Information, Control, Integration
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Market Logistics Planning
• Deciding on the company’s value proposition* to its customers
• Deciding on the best channel design and network strategy
• Developing operational excellence
• Implementing the solution
*Value Proposition = Total Product Concept = The Marketing Mix = The USP
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Market Logistics
• Sales forecasting• Distribution scheduling• Production plans• Finished-goods
inventory decisions• Packaging
• In-plant warehousing• Shipping-room
processing• Outbound
transportation• Field warehousing• Customer delivery and
servicing
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Logistics Objectives Attain market coverage
Deliver Customer
Service
Ensure Adherence to
Product Specifications
Cost-Containment
LOGISTICSLOGISTICS
SYSTEMSYSTEM
LOGISTICSLOGISTICS
SYSTEMSYSTEM
These four key factors are inter-related, and should not be viewed in isolation. Often compromises need to be reached – maybe the cost-containment aspects force us to compromise on lowering our standards of customer service.
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Market Logistics Decisions
• How should orders be handled?
• Where should stock be located?
• How much stock should be held?
• How should goods be shipped?
Load-planning board – thanks to Rom Ltd
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Logistics and Channel Management
Right C
ostRight ConditionsRig
ht Tim
e
Right Price
The Aim of Logistics:
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Relational Logistics Model
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The Five Logistics Mediators – 1 - Inventory Management
• Electronic Data Interchange (EDI)• Just-in-Time Manufacturing (JIT)• Quick-Response Logistics
Inventory -- often called stock -- is a tangible asset capable of being mined, converted or created. It is one of the largest investments in any logistics system.
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The Five Logistics Mediators –2 - Transportation
• Product Decisions• Location decisions• Purchasing Decisions• Pricing Decisions
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The Five Logistics Mediators –3 - Warehousing
• Movement• Materials Handling• Storage• Information Transfer
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The Five Logistics Mediators – 4 - Purchasing
• Forecasting Materials Demand• Selection of suppliers – “sourcing”• Minimizing transaction and product costs• Maximizing transaction and product quality
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The Five Logistics Mediators – 5 - Packaging
Containment
Protection
Apportionment
Unitization
Communication
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LOGISTICS TRENDS
SAME TIME, SAME PLACE DISTRIBUTIONSAME TIME, SAME PLACE DISTRIBUTION Technology-driven reduction in waiting times between channel Technology-driven reduction in waiting times between channel
members.members.
BOUNDARYLESS DISTRIBUTIONBOUNDARYLESS DISTRIBUTIONMultiple market entry facilitated by coordinated logistics systems.Multiple market entry facilitated by coordinated logistics systems.
THIRD-PARTY LOGISTICSTHIRD-PARTY LOGISTICSChannel members are increasingly “outsourcing” logistics Channel members are increasingly “outsourcing” logistics
functions.functions.
STRATEGIC LOGISTICS PARTNERINGSTRATEGIC LOGISTICS PARTNERINGAlliances between channel members will become a mainstay of Alliances between channel members will become a mainstay of
competitive distribution advantagecompetitive distribution advantage..
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Determining Optimal Order Quantity
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Transportation Factors
• Speed• Frequency• Dependability• Capability• Availability• Traceability• Cost
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Sources
Banks: see chart from Economist, 8nov08
Minerals and Mining: See USGS
Insurance: see ABI website
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See website www.sginns.co.uk for links to each business segment
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Stephen Ginns --- 4nov09 --- Slide 35 of 35The Thiepval Memorial, the Memorial to the Missing of the Somme