Major Points Major Points of Ch. 1 of Ch. 1 1. Key Terms and Definitions 2. Why Marketing Channels and Intermediaries?** 3. Marketing Channels and other Marketing Concepts 4. The Flows in the Marketing Channels** 5. Basic Principles for Marketing Channels** 6. Evolution of Marketing Channel Concept 1 1 Let’s Learn about:
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Major PointsMajor Points of Ch. 1 of Ch. 1
1. Key Terms and Definitions
2. Why Marketing Channels and Intermediaries?**
3. Marketing Channels and other Marketing Concepts
4. The Flows in the Marketing Channels**
5. Basic Principles for Marketing Channels**
6. Evolution of Marketing Channel Concept
11
Let’s Learn about:
Chapter 2Chapter 2
The Channel Participants
Major Points of Ch. 2Major Points of Ch. 2
1.Who Are Major Participants in the Marketing Channel*
2. Why does a manufacturer shift (delegate) Why does a manufacturer shift (delegate) distribution tasks to intermediaries?distribution tasks to intermediaries? **
1.Who Are Major Participants in the Marketing Channel*
2. Why does a manufacturer shift (delegate) Why does a manufacturer shift (delegate) distribution tasks to intermediaries?distribution tasks to intermediaries? **
• Motor vehicle & parts dealers• Furniture & home furnishings
stores• Electronics & appliance
stores• Building material & garden
equip. & supply dealers• Food & beverage stores• Health & personal care
stores
• Gasoline stations• Clothing & clothing
accessories stores• Sporting goods, hobby, book,
& music stores• General merchandise stores• Miscellaneous store retailers• Nonstore retailers
Retail Structure TrendsRetail Structure Trends11
Decreasing number of establishments
Increasing sales
= increase in size of retail establishments measured by average sales volume
per store
11Concentration in RetailingConcentration in Retailing
4% of all retail firms accounted for nearly 80%
of total sales!!
Distribution Tasks Performed by Retailers Distribution Tasks Performed by Retailers 22
The role of the retailer is to interpret the demands of his customers and to find and stock the goods these customers want, when they want them, and in the way they want them. This adds up to having the right assortments at the time customers are ready to buy.
— Charles Y. Lazarus (1961)
22Distribution Tasks Performed by Distribution Tasks Performed by RetailersRetailers
• Interpret and relay consumer demand*
• Remove risk by ordering in advance of the season
• Divide large quantities into consumer-sized lots
• Offer manpower & physical facilities close to consumers’ residences
• Provide personal assistance to help sell products*
• Offer storage
• Interpret and relay consumer demand*
• Remove risk by ordering in advance of the season
• Divide large quantities into consumer-sized lots
• Offer manpower & physical facilities close to consumers’ residences
• Provide personal assistance to help sell products*
• Offer storage
RETAILER TYPE
MAIN FOCUS ON MARGIN
OR TURNOVER?
BULK-BREAKING
SPATIAL CONVEN-
IENCE
WAITING & DELIVERY
TIME
VARIETY (BREADTH)
ASSORT-MENT
(DEPTH)
Department store (e.g., May Co.)
Margin Yes Moderate Low wait time Broad Moderate/ Shallow
Specialty store (e.g., The Gap)
Margin Yes Moderate Low wait time Narrow Deep
Mail Order/ Catalog (e.g., Lands' End)
Margin Yes Extremely High Moderate/ High wait time
Narrow Moderate
Convenience store (e.g., 7-Eleven)
Both Yes Very High Low wait time Broad Shallow
Category killer (e.g., Toys "R" Us)
Turnover Yes Low Low wait time Narrow Deep
Mass Merchandiser (e.g., Wal-Mart)
Turnover Yes Low Moderate wait time (may be out of stock)
Broad Shallow
Hypermarket (e.g., Carrefour)
Turnover Yes Low Moderate wait time
Broad Moderate
Warehouse Club (e.g., Sam's Club)
Turnover No Low Moderate/high wait time (may be out of stock)
Broad Shallow
A TAXONOMY OF RETAILER TYPES*
Retailers’ Growing Power Retailers’ Growing Power in Marketing Channels*in Marketing Channels*
22
Increased size & buying power
Become power retailers &
category killers
Application of advancedTechnologies
Information technology & the Internet; threetailing*
Use of modern marketing strategies
Modern techniques; relationship marketing
THE INCREASING POLARITY OF RETAIL TRADE
Stagnant Rates ofGrowth and Low Profitability
ConventionalOutlets
Mass-Merchandisers:
High Tech
SpecializedRetail Outlets:
High Touch
High Rates ofGrowth and
Attractive Profitability
Facilitating Agencies in Marketing Facilitating Agencies in Marketing ChannelsChannels
Topic 5: 22
• Transportation agencies (3PLS)
• Storage agencies• Order processing agencies• Advertising agencies• Financial agencies• Insurance companies• Marketing research firms
SOME SOURCES OF INFORMATION ABOUT THE WHOLESALING/RETAILING
• General industry information:– http://www.naw.org (National Association of