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Principles of Marketing
Eighteenth Edition
Chapter 13
Retailing and Wholesaling
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
WALMART: A Battle between Titans in
the New World of Retail
Walmart is the world’s largest
retailer and the world’s largest
company. Walmart has faced
challenges as it tries to
maintain its rapid growth. In
particular, massive shifts toward
digital and mobile buying have
changed how Walmart delivers
on its “Save money. Live
better.” promise. Walmart has invested heavily to
build its omni-channel
capabilities to better serve
today’s mobile-first, omni-
channel consumers.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Learning Objectives
13.1 Explain the role of retailers in the distribution channel
and describe the major types of retailers.
13.2 Discuss how retailers are using omni-channel retailing
to meet the cross-channel shopping behavior of
today’s digitally connected consumers.
13.3 Describe the major retailer marketing decisions.
13.4 Discuss the major trends and developments in retailing.
13.5 Explain the major types of wholesalers and their
marketing decisions.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Learning Objective 1
Explain the role of retailers in the distribution channel and
describe the major types of retailers.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailing (1 of 2)
Retailing includes all the activities in selling products or
services directly to final consumers for their personal,
nonbusiness use.
Retailers are businesses whose sales come primarily from
retailing.
Shopper Marketing focuses the entire marketing process
on turning shoppers into buyers as they approach the point
of sale, whether during in-store, online, or mobile shopping.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailing (2 of 2)
Omni-channel retailing creates a seamless cross-channel buying
experience that integrates in-store, online, and mobile shopping,
creating a single shopping experience.
The new retailing model: Digital technologies have caused a
massive shift in how and where people buy. Today’s retailers must
adopt omni-channel retailing that integrates in-store, online, and
mobile shopping.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Types of Retailers (1 of 8)
Amount of Service Classifications
• Self-service
• Limited service
• Full service
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Types of Retailers (2 of 8)
Product Line Classifications
• Specialty stores
• Department stores
• Convenience stores
• Superstores
• Category killers
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Types of Retailers (3 of 8)
Relative Price Characteristics
• Discount stores
• Off-price retailers
• Factory outlets
• Warehouse clubs
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Types of Retailers (4 of 8)
Table 13.2 Major Types of Retail Organizations
Type Description Examples
Corporate
chain
Two or more outlets that are commonly owned
and controlled. Corporate chains appear in all
types of retailing but they are strongest in
department stores, discount stores, food stores,
drugstores, and restaurants.
Macy’s (department stores),
Target (discount stores), Kroger
(grocery stores), CVS
(drugstores)
Voluntary
chain
Wholesaler-sponsored group of independent
retailers engaged in group buying and
merchandising.
Independent Grocers Alliance
(IGA), Western Auto (auto
supply),
True Value (hardware)
Retailer
cooperative
Group of independent retailers who jointly
establish a central buying organization and
conduct joint promotion efforts.
Associated Grocers (groceries),
Ace Hardware (hardware)
Franchise
organization
Contractual association between a franchisor (a
manufacturer, wholesaler, or service organization)
and franchisees (-independent businesspeople
who buy the right to own and operate one or
more units in the franchise system).
McDonald’s, Subway, Pizza Hut,
Jiffy Lube, Meineke Mufflers,
7-Eleven
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Types of Retailers (5 of 8)
Organizational Approach
Corporate chains are two or more outlets that are
commonly owned and controlled.
• Size allows them to buy in large quantities at lower prices
and gain promotional economies
– Macy’s
– C V S
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Types of Retailers (6 of 8)
Organizational Approach
Voluntary chains are wholesale-sponsored groups of
independent retailers that engage in group buying and
common merchandising.
• IGA
• Western Auto
• True Value
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Types of Retailers (7 of 8)
Organizational Approach
Retailer cooperatives are a group of independent retailers
that band together to set up a joint-owned, central wholesale
operation and conduct joint merchandising and promotion
efforts.
• Ace Hardware
• Associated Grocers
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Types of Retailers (8 of 8)
Organizational Approach
Franchises are contractual
associations between a manufacturer,
wholesaler, or service organization (a
franchisor) and independent business
people (franchisees) who buy the right
to own and operate one or more units
in the franchise system.
Franchising covers a lot more than just
burger joints and fitness centers.
Century 21 consists of over 127,000
independent agents working in more
than 9,400 franchise offices in 80
countries.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Learning Objective 2
Discuss how retailers are using omni-channel retailing to
meet the cross-channel shopping behavior of today’s digitally
connected consumers.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Omni-Channel Retailing
The key to omni-channel retailing is to integrate channels for a
seamless buying experience.
Omni-channel retailing: Used-car giant CarMax makes the entire
used-car buying experience simple and seamless across its digital
and store shopping channels.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Learning Objective 3
Describe the major retailer marketing decisions.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailer Marketing Decisions (1 of 7)
Figure 13.1 Retailer Marketing Strategies
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailer Marketing Decisions (2 of 7)
Segmentation targeting, differentiation, and positioning involve the
definition and profile of the market so the other retail marketing decisions
can be made.
Retail targeting and positioning: Lush Fresh Handmade Cosmetics
succeeds by carefully positioning itself away from its larger competitors.
It makes premium beauty products made by hand from the freshest
possible natural ingredients.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailer Marketing Decisions (3 of 7)
Major product variables:
• Product assortment
• Services mix
• Store atmosphere
Experiential retailing: adidas’s stadium-
like flagship store on Fifth Avenue in
New York City carries about every
product that adidas offers. But the
store focuses as much on offering
customer experiences as on selling
products.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailer Marketing Decisions (4 of 7)
Price Decision
Price policy must fit the target market and positioning,
product and service assortment, competition, and economic
factors.
• High markup on lower volume
• Low markup on higher volume
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailer Marketing Decisions (5 of 7)
Price Decision
Everyday low pricing (E D L P) involves charging constant,
everyday low prices and offering few sales or discounts.
High-low pricing involves charging higher prices on an
everyday basis, coupled with frequent sales and other price
promotions.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailer Marketing Decisions (6 of 7)
Promotion Decision
• Advertising
• Personal selling
• Sales promotion
• Public relations
• Direct marketing
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailer Marketing Decisions (7 of 7)
Place Decision
Central business districts are located in cities and include
department and specialty stores, banks, and movie theaters.
A shopping center is a group of retail businesses planned,
developed, owned, and managed as a unit.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Learning Objective 4
Discuss the major trends and developments in retailing.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailing Trends and Developments
(1 of 6)
Tighter Consumer spending
• Changed consumer spending
patterns
• Some retailers benefit
• Other retailers have tough times
Value positioning: To attract today’s
more value-oriented consumers,
T G I Friday offers Fridays 5, “a
selection of delicious drinks and
appetizers, all for $5 each…
whenever you want.”.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailing Trends and Developments
(2 of 6)
New Retail Forms, Shortening Retail Life Cycles, and
Retail Convergence
Retail convergence involves the merging of consumers,
producers, prices, and retailers, creating greater competition
for retailers and greater difficulty differentiating offerings.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailing Trends and Developments
(3 of 6)
The Rise of Megaretailers
The rise of megaretailers involves the rise of mass
merchandisers and specialty superstores, the formation of
vertical marketing systems, and a rash of retail mergers and
acquisitions.
• Superior information systems
• Buying power
• Large selection
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailing Trends and Developments
(4 of 6)
Growing Importance of Retail Technology
Retail technology provides
better forecasts, inventory
control, electronic ordering,
transfer of information,
scanning, online transaction
processing, improved
merchandise handling
systems, and the ability to
connect with customers.
Retail technology: “If you want to glimpse
the future of retail, check out an Amazon
Go store.”
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailing Trends and Developments
(5 of 6)
Green Retailing
Environmentally Sustainable Practices
• Store design, construction, operations
• Product assortment
• Recycling made easier
• Package and distribution
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Retailing Trends and Developments
(6 of 6)
Global Expansion of Major Retailers
• Retailers with unique formats and strong brands in other
countries
• U.S. behind Asian and European companies in global
expansion
• Challenges in meeting needs of local markets
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Learning Objective 5
Explain the major types of wholesalers and their marketing
decisions.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (1 of 15)
Wholesaling includes all activities involved in selling goods
and services to those buying for resale or business use.
• Selling and promoting
• Buying and assortment building
• Bulk breaking
• Warehousing
• Transportation
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (2 of 15)
Wholesaling includes all activities involved in selling goods
and services to those buying for resale or business use.
• Financing
• Risk bearing
• Market information
• Management services and advice
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (3 of 15)
Selling and promoting involves the wholesaler’s sales
force helping the manufacturer reach many small customers
at a low cost.
Buying and assortment building involves the selection of
items and building of assortments needed by customers,
saving the customers work.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (4 of 15)
Bulk breaking involves the wholesaler buying in large
quantities and breaking into smaller lots for customers.
Warehousing involves the wholesaler holding inventory,
reducing its customers’ inventory cost and risk.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (5 of 15)
Transportation involves the wholesaler providing quick
delivery due to its proximity to the buyer.
Financing involves the wholesaler providing credit and
financing suppliers by ordering early and paying on time.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (6 of 15)
Risk bearing involves the wholesaler absorbing risk by
taking title and bearing the cost of theft, damage, spoilage,
and obsolescence.
Market information involves the wholesaler providing
information to suppliers and customers about competitors,
new products, and price developments.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (7 of 15)
Management services and advice involves wholesalers helping
retailers train their sales clerks, improve store layouts, and set up
accounting and inventory control systems.
Wholesaling: Many of the nation’s largest and most important
wholesalers—like Grainger—are largely unknown to final consumers. But
they are very well known and much valued by the business customers
they serve.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (8 of 15)
Types of Wholesalers
• Merchant wholesalers
• Brokers and agents
• Manufacturers’ and retailers’ branches and offices
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (9 of 15)
Types of Wholesalers
Merchant wholesalers are the largest group of wholesalers
and include:
• Full-service wholesalers that provide a full set of services
• Limited service wholesalers that provide few services and
specialized functions
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (10 of 15)
Types of Wholesalers
Brokers and agents do not take title, perform a few
functions, and specialize by product line or customer type.
• Brokers bring buyers and sellers together and assist in
negotiations.
• Agents represent buyers or sellers.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (11 of 15)
Types of Wholesalers
Manufacturers’ and retailers’ branches and offices are a
form of wholesaling by sellers or buyers themselves, rather
than through independent wholesalers.
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (12 of 15)
Figure 13.2 Wholesaler Marketing Strategies
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (13 of 15)
Wholesaler Marketing Decisions
Segmentation, targeting, differentiation, positioning
decisions:
• Size of customer
• Type of customer
• Need for service
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (14 of 15)
Wholesaler Marketing Decisions
Marketing mix decisions
• Product
• Price
• Promotion
• Place
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
Wholesaling (15 of 15)
Trends In Wholesaling
• Need for greater efficiency
• Value-adding customer relationships
• Increase in customer demand for services
• Increase in use of technology to boost productivity
Copyright © 2021, 2018, 2016 Pearson Education, Inc.
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other instructors who rely on these materials.
The writer is very fast, professional and responded to the review request fast also. Thank you.
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