MGT301 MGT301 Principles of Principles of Marketing Marketing Lecture-30 Lecture-30
Jan 11, 2016
MGT301MGT301Principles of Principles of MarketingMarketing
Lecture-30Lecture-30
SummarySummaryof of
Lecture-29Lecture-29
Producer
End users
End users
Interme-diaries
Interme-diaries
Producer
Marketingactivities Demand
Demand Demand
Push Strategy
Pull Strategy
Marketing activities
Demand
Marketing Logistics and Supply Marketing Logistics and Supply Chain ManagementChain Management
Functions of Logistics SystemsFunctions of Logistics Systems
InventoryWhen to order
How much to orderJust-in-time
InventoryWhen to order
How much to orderJust-in-time
CostsMinimize Costs ofAttaining Logistics
Objectives
CostsMinimize Costs ofAttaining Logistics
Objectives
WarehousingStorage
Distribution
WarehousingStorage
Distribution
Order ProcessingSubmittedProcessed
Shipped
Order ProcessingSubmittedProcessed
Shipped
Logistics
FunctionsTransportation Water, Truck, Rail, Pipeline & Air
Today’s TopicsToday’s Topics
Retailing and WholesalingRetailing and Wholesaling
RetailingRetailing
Retailing is the process by which goods and Retailing is the process by which goods and services are sold to consumers for their services are sold to consumers for their personal use.personal use.
Retailers provide many benefits such as:Retailers provide many benefits such as:
providing an assortment of merchandise under one providing an assortment of merchandise under one roof,roof,
allowing access to goods customers might never see,allowing access to goods customers might never see,
providing interesting environments in which to spend providing interesting environments in which to spend our leisure time.our leisure time.
Retailing can be done in stores (store retailing) Retailing can be done in stores (store retailing) or out of a store (nonstore retailing) such as:or out of a store (nonstore retailing) such as: Direct mail,Direct mail, Catalogs,Catalogs, Telephone,Telephone, Home shopping shows, Home shopping shows, Internet.Internet.
““...all activities involved in selling, renting, ...all activities involved in selling, renting, and providing goods and services to and providing goods and services to ultimate consumers for personal, family or ultimate consumers for personal, family or household use.”household use.”
-Berkowitz et al-Berkowitz et al
Classification of RetailingClassification of Retailing
Amount of Service
Self-Service, Limited-Service andFull-Service Retailer
Amount of Service
Self-Service, Limited-Service andFull-Service Retailer
Product LineLength and Breadth of the Product
Assortment
Product LineLength and Breadth of the Product
Assortment
Relative PricesPricing Structure that is Used
by the Retailer
Relative PricesPricing Structure that is Used
by the Retailer
Retail OrganizationsIndependent, Corporate, or Contractual
Ownership Organization
Self-Service Retailer
Provide Few or No Services to Shoppers
Limited-ServiceRetailers
Provide Only a Limited Number of Services
to Shoppers
Full-ServiceRetailers
Retailers that Provide a Full Range of Services
to Shoppers
Amount of ServiceAmount of Service
Specialty Stores
Department Stores
Supermarkets
Convenience Stores
Superstores
Discount Stores
Narrow Product Line, Deep Assortment
Wide Variety of Product Lines i.e. Clothing, Home Furnishings
Wide Variety of Food, Laundry, & Household Products
Limited Line of High-Turnover Convenience Goods
Large Assortment of Routinely Purchased Food & Nonfood Products
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
Product LineProduct Line
Discount Stores
Discount Stores
“Off-Priced” Retailers
“Off-Priced” Retailers
CatalogShowrooms
CatalogShowrooms
Relative PricesRelative Prices
CorporateChains
Retailerswanting economies
of scale
Retailerswanting economies
of scale
Retail OrganizationRetail Organization
CorporateChains Franchise
Operations
Retailerswanting economies
of scale
Retailerswanting economies
of scale
CorporateChains
Franchise Operations
VoluntaryChains
Cooperative Chains
Retailerswanting economies
of scale
Retailerswanting economies
of scale
Young Store
Young Store
Brand New StoreBrand New Store
High Margin
High Price
High Status
Low Margin
Low Price
Low Status
Older Store
The Wheel of Retailing The Wheel of Retailing
Nonstore RetailingNonstore Retailing
Mail Order• Catalogs - from clothing to computers
• Direct Mail - brochure offering a product or service at one point in time.
Mail Order• Catalogs - from clothing to computers
• Direct Mail - brochure offering a product or service at one point in time.
Direct Selling• Door-to-Door Sales - declining in U.S.• Parties & Networks - presentations
• Telemarketing - over the phone
Direct Selling• Door-to-Door Sales - declining in U.S.• Parties & Networks - presentations
• Telemarketing - over the phone
Automatic Vending• Best suited to inexpensive merchandise
and food and beverages.
Automatic Vending• Best suited to inexpensive merchandise
and food and beverages.
Direct Response Television• Home Shopping Networks - TV channels
that sell products
Direct Response Television• Home Shopping Networks - TV channels
that sell products
Retailer’s Product Assortment and Retailer’s Product Assortment and Services DecisionsServices Decisions
Product Assortment Decisions• Width and Depth of Assortment
• Quality of Products• Product Differentiation Strategies
Product Assortment Decisions• Width and Depth of Assortment
• Quality of Products• Product Differentiation Strategies
Services MixKey Tool of Nonprice Competitionfor Setting One Store Apart From
Another.
Services MixKey Tool of Nonprice Competitionfor Setting One Store Apart From
Another.
Store’s Atmosphere• Physical Layout
• “Feel” That Suits the Target Market and Moves Customers to Buy
Store’s Atmosphere• Physical Layout
• “Feel” That Suits the Target Market and Moves Customers to Buy
Factors Influencing Store Factors Influencing Store AtmosphereAtmosphere
Employee Type and Density
Merchandise Type and Density
Fixture Type and Density
Sound
Odors
Visual Factors
Most InfluentialFactors on
StoreAtmosphere
Most InfluentialFactors on
StoreAtmosphere
Retailer Marketing DecisionsRetailer Marketing Decisions
Retailer MarketingMix
Retailer MarketingMixRetailer StrategyRetailer Strategy
Target Market
Retail Store Positioning
Product and Service
Assortment
Prices
Promotion
Place (Location)
LocationLocation Product AssortmentProduct Assortment Customer ServiceCustomer Service AtmosphericsAtmospherics PricingPricing PromotionPromotion
Strategic Issues in RetailingStrategic Issues in Retailing
WholesalingWholesaling
What is Wholesaling?
All the activities involved in selling goods and services All the activities involved in selling goods and services to those buying for resale or business use.to those buying for resale or business use.
Wholesaler - those firms engaged primarily in Wholesaler - those firms engaged primarily in wholesaling activity.wholesaling activity.
BuyingBuying SellingSelling StoringStoring TransportingTransporting Providing Makret InformationProviding Makret Information FinancingFinancing Risk TakingRisk Taking
Services Provided by Wholesaling Services Provided by Wholesaling IntermediariesIntermediaries
Customer Expectations for Customer Expectations for WholesalingWholesaling
Suppliers’ Logistics SystemsSuppliers’ Logistics Systems
AccuracyEasy
Inquiryand
Order
EasyInquiry
andOrder Reliable
DeliveryOn-timeDelivery
On-timeDelivery
Error-FreeInvoicing
Error-FreeInvoicing
Post-SalesSupport
Post-SalesSupport
Easy ClaimsHandling
Easy ClaimsHandling
Types of WholesalersTypes of Wholesalers
Merchant Wholesaler
Independently Owned Business that Takes
Title to the Merchandise
it Handles.
Merchant Wholesaler
Independently Owned Business that Takes
Title to the Merchandise
it Handles.
Manufacturers’Sales Branches
and Offices
Wholesaling by Sellersor Buyers Themselves Rather Than Through
IndependentWholesalers.
Manufacturers’Sales Branches
and Offices
Wholesaling by Sellersor Buyers Themselves Rather Than Through
IndependentWholesalers.
Brokers/ Agents
They Don’t Take Title to the Goods, and TheyPerform Only a Few
Functions.
Brokers/ Agents
They Don’t Take Title to the Goods, and TheyPerform Only a Few
Functions.
Wholesaler Marketing DecisionsWholesaler Marketing Decisions
Wholesaler MarketingMix
Wholesaler MarketingMixWholesaler StrategyWholesaler Strategy
Target Market
Retail Store Positioning
Product and Service
Assortment
Prices
Promotion
Place (Location)
Compete on value (not just price.)Compete on value (not just price.)Save customers time and energy.Save customers time and energy.
Make shopping fun.Make shopping fun.
So….So….
End of Place part….. End of Place part…..
Enough for today. . Enough for today. . ..
SummarySummary
Retailing and WholesalingRetailing and Wholesaling
Classification of RetailingClassification of Retailing
Amount of Service
Self-Service, Limited-Service andFull-Service Retailer
Amount of Service
Self-Service, Limited-Service andFull-Service Retailer
Product LineLength and Breadth of the Product
Assortment
Product LineLength and Breadth of the Product
Assortment
Relative PricesPricing Structure that is Used
by the Retailer
Relative PricesPricing Structure that is Used
by the Retailer
Retail OrganizationsIndependent, Corporate, or Contractual
Ownership Organization
Nonstore RetailingNonstore Retailing
Mail Order• Catalogs - from clothing to computers
• Direct Mail - brochure offering a product or service at one point in time.
Mail Order• Catalogs - from clothing to computers
• Direct Mail - brochure offering a product or service at one point in time.
Direct Selling• Door-to-Door Sales - declining in U.S.• Parties & Networks - presentations
• Telemarketing - over the phone
Direct Selling• Door-to-Door Sales - declining in U.S.• Parties & Networks - presentations
• Telemarketing - over the phone
Automatic Vending• Best suited to inexpensive merchandise
and food and beverages.
Automatic Vending• Best suited to inexpensive merchandise
and food and beverages.
Direct Response Television• Home Shopping Networks - TV channels
that sell products
Direct Response Television• Home Shopping Networks - TV channels
that sell products
WholesalingWholesaling
Types of WholesalersTypes of Wholesalers
Merchant Wholesaler
Independently Owned Business that Takes
Title to the Merchandise
it Handles.
Merchant Wholesaler
Independently Owned Business that Takes
Title to the Merchandise
it Handles.
Manufacturers’Sales Branches
and Offices
Wholesaling by Sellersor Buyers Themselves Rather Than Through
IndependentWholesalers.
Manufacturers’Sales Branches
and Offices
Wholesaling by Sellersor Buyers Themselves Rather Than Through
IndependentWholesalers.
Brokers/ Agents
They Don’t Take Title to the Goods, and TheyPerform Only a Few
Functions.
Brokers/ Agents
They Don’t Take Title to the Goods, and TheyPerform Only a Few
Functions.
Next….Next….
Review 3rd P (Place)Review 3rd P (Place)
MGT301MGT301Principles of Principles of MarketingMarketing
Lecture-30Lecture-30