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Principles of
Contemporary Marketing
Kurtz & Boone
Chapter 14
Retailers, Wholesalers,
and Direct Marketers
CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Chapter Objectives
1.
Explain the wheel of retailing.
2.
Discuss how retailers select target markets.
3.
Show how the elements of the marketing mix apply to
retailing strategy.
4.
Explain the concepts of retail convergence and scrambled
merchandising.
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Chapter Objectives
5.
Identify the functions performed by wholesaling
intermediaries.
6.
Outline the major types of independent wholesaling
intermediaries and the appropriate situations for using each.
7.
Compare the basic types of direct marketing and nonstore
retailing.
8.
Describe how much the Internet has altered the wholesaling,
retailing, and direct marketing environments.
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Retailing Strategy
o Retailers base key decisions on two fundamental steps
in the marketing strategy process:
o Selecting a target market
o Developing a retailing mix to satisfy the chosen market
Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.
CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.
CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Merchandising Strategy
o Guides retailer’s decisions on the items it will offer
o While developing the merchandise mix, retailers
should consider:
o Needs and preferences of its target market
o Competitive environment influencing choices
o Overall profitability of each product line and category
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Customer Service Strategy
o Heightened customer service is one possible retailing
strategy
o The goal is to attract and retain target customers to
increase sales and profits
o Some services that retailers could provide:
o Enhanced comfort through lounges, complimentary
coffee, convenient restrooms
o Child-care services for customers
o Virtual assistance programs
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Pricing Strategy
o Prices reflect a retailer’s marketing objectives and
policies
o They affect consumer perceptions
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Location/Distribution Strategy
o Location depends on many factors, including the
type of merchandise, the retailer’s financial resources,
characteristics of the target market, and site availability
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Promotional Strategy
o Promotion informs customers about locations,
merchandise selections, hours of operation, and prices
o Helps retailers attract shoppers and build customer
loyalty
o National chains purchase advertising in print and
broadcast media
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Classification of Retailers
o By form of ownership
o By shopping effort
o By services provided
o By product lines
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Retail Convergence and Scrambled
Merchandising
o Retail convergence - Situation in which similar
merchandise is available from multiple retail outlets,
resulting in the blurring of distinctions between type of
retailer and merchandise offered
o Scrambled merchandising - Retailing practice of
combining dissimilar product lines to boost sales
volume
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Functions of Wholesaling Intermediaries
o Creating utility
o Providing services
o Lowering costs by limiting contacts
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Direct Marketing and Other Nonstore
Retailing
o Direct marketing - Direct communications, other than
personal sales contacts, between buyer and seller,
designed to generate sales, information requests, or
store or Web site visits
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Other Nonstore Retailing
o Direct mail
o Direct selling
o Direct-response retailing
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Telemarketing
o Direct marketing conducted by telephone
o Most frequently used form of direct marketing
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Internet Retailing
o Selling directly to consumers via Web storefronts
o Internet-based retailers keep little or no inventory
o Fill customer orders directly from vendors
o Some traditional brick-and-mortar stores have
successfully extended their presence to the Web
o Examples: Gap and Lands’ End
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CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
Automatic Merchandising
o Primarily used to sell food items, lottery tickets in the
U.S.
o Other countries use vending machines to offer a wider
variety of goods
o As technology advances, high-end products are being
sold in vending machines
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