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1、17Retailing and Direct MarketingObjectivesTo understand the purpose and function of retailers in the marketing channelTo identify the major types of retailersTo understand direct marketing and two other forms of nonstore retailingTo examine major types of franchising and the benefits and weaknesses
2、of franchisingTo explore strategic issues in retailingChapter OutlineThe Nature of RetailingMajor Types of Retail StoresDirect MarketingOther Types of Nonstore RetailingFranchisingStrategic Issues in RetailingThe Nature of RetailingRetailingTransactions in which ultimate consumers are the buyersReta
3、ilersOrganizations that purchase products for the purpose of reselling them to ultimate consumersRetailers add valueshopping convenience, services, and purchasing assistance to customersRetailers create utilitytime, place, possession, and formSuccess in retailing comes from having a strong customer
4、focus coupled with desired levels of service, product quality, and innovation.Major Types of Retail StoresGeneral-Merchandise RetailersA retail establishment that offers a variety of product linesDepartment storesLarge retail organizations characterized by wide product mixes and organized into separ
5、ate departments to facilitate marketing efforts and internal managementDiscount storesSelf-service, general merchandise stores offering brand name and private brand products at low pricesMajor Types of Retail Stores (contd)General-Merchandise Retailers (contd)SupermarketsLarge, self-service stores t
6、hat carry a complete line of food products, along with some nonfood productsSuperstoresGiant retail outlets that carry food and nonfood products found in supermarkets, as well as most routinely purchased consumer productsMajor Types of Retail Stores (contd)General-Merchandise Retailers (contd)Hyperm
7、arketsStores that combine supermarket and discount shopping in one locationWarehouse clubsLarge-scale, members-only establishments that combine features of cash-and-carry wholesaling with discount retailing Major Types of Retail Stores (contd)General-Merchandise Retailers (contd)Warehouse showroomsR
8、etail facilities in large, low-cost buildings with large on-premise inventories and minimal servicesCatalog showroomsA form of warehouse showroom where consumers can shop from a catalog and products are stored out of buyers reachMajor Types of Retail Stores (contd)Specialty RetailersTraditional spec
9、ialty retailersAlso called “limited-line and “single-line retailersCarry a narrow product mix with deep product lines (e.g., pet supplies)Have higher costs and higher marginsProvide more product selection (first-line brands), product expertise, and high levels of personal serviceMajor Types of Retai
10、l Stores (contd)Specialty Retailers (contd)Off-price retailersBuy manufacturers seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discountsCharge less than department stores for comparable merchandise and offer few customer servicesHave established long-term rela
11、tionships with suppliers for continuing supplies of reduced-price goodsCategory killersConcentrate on a major product category and compete on the basis of low prices and product availabilityDirect MarketingDirect MarketingThe use of telephone and nonpersonal media to introduce products to consumers,
12、 who then can purchase them via mail, telephone, or the InternetA type of nonstore retailingNonstore RetailingThe selling of products outside the confines of a retail facilityDirect Marketing (contd)Catalog MarketingA type of marketing in which an organization provides a catalog from which customers
13、 can make selections and place orders by mail, telephone, or the InternetConsumer advantages are efficiency and convenienceMarketer advantages are lower location, facility, selling, and operating costs.Disadvantages are inflexibility and limited selection and local service availability.Direct Market
14、ing (contd)Direct-Response MarketingA type of marketing that occurs when a retailer advertises a product and makes it available through mail or telephone ordersTelemarketingThe performance of marketing-related activities by telephoneDirect Marketing (contd)Television Home ShoppingA form of selling i
15、n which products are presented to television viewers, who can buy them by calling a toll-free number and paying with a credit cardOnline RetailingRetailing that makes products available to buyers through computer connectionsOther Types of Nonstore RetailingDirect SellingThe marketing of products to
16、ultimate consumers through face-to-face sales presentations at home or in the workplaceParty plans: hosting groups to view a product demonstration and encouraging participants to purchase the productsBenefitsPersonal attention to customerConvenience of time and place of presentationLimitationsHigh c
17、osts make it the most expensive form of sellingNegative consumer view of direct sellingOther Types of Nonstore Retailing (contd)Automatic VendingThe use of machines to dispense productsCan include items such as candy, chewing gum, soft drinks, cigarettes, newspapers, and coffeeAdvantages: small amou
18、nt of space needed and no sales personnelDisadvantages: high costs of equipment and frequent servicingFranchisingFranchisingAn arrangement in which a supplier (franchiser) grants a dealer (franchisee) the right to sell products in exchange for some type of considerationFranchiser furnishes equipment
19、, buildings, management know-how, and marketing assistance.Franchisee supplies labor and capital and operates the business by the provisions of the franchise agreement.Major Types of Retail FranchisesManufacturer AuthorizationProduct producer licenses retailers to sell its brand name product(s)Distr
20、ibutor AuthorizationProduct producer licenses distributors to sell its brand name product to retailersProducer AuthorizationFranchiser supplies brand names, production techniques, or other services to franchisee while maintaining development and control of marketing strategiesFranchising (contd)Adva
21、ntagesEnables startup with limited capitalProvides developed and proven business to franchiseeAttracts customers with established brand nameAllows immediate market entryMotivates franchisee to succeedDisadvantagesControl over aspects of the business and its operations by franchiserExpense of continu
22、ing franchise royalties and advertising feesLack of control of franchisees by franchisorStrategic Issues in RetailingRetail Store LocationFactors affecting locationIntended target marketKinds of productsSuitability site for customer accessCharacteristics of existing retail operationsTypes of Locatio
23、nsFree-standing structuresTraditional business districtsStrategic Issues in Retailing (contd)Traditional Shopping CentersNeighborhood shopping centersUsually consist of several small convenience and specialty stores.Community shopping centersInclude one or more department stores (anchors), some spec
24、ialty stores, and convenience stores.Regional shopping centersHave the largest department stores, the widest product mix, and the deepest product lines of all shopping centers.Strategic Issues in Retailing (contd)Nontraditional Shopping CentersFactory outlet mallsFeature discount and factory outlet
25、stores carrying traditional brand name productsMiniwarehouse mallLoosely planned; lease space to retailers running retail stores out of warehouse baysNonanchored mallsDo not have traditional department store anchors; combine off-price and category killer stores in a “power center formatStrategic Iss
26、ues in Retailing (contd)Retail PositioningIdentifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segmentStore ImageAtmosphericsThe physical elements in a stores design that appeal to consum
27、ers emotions and encourage buyingInterior layout, colors, furnishings, and lightingExterior storefront and entrance design, display windows, and traffic congestionStrategic Issues in Retailing (contd)Scrambled MerchandisingThe addition of unrelated products and product lines to an existing product mix, particularly fast-moving items that can be sold in volumeIntent of scrambled merchandisingConvert
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