CH13 - Chapter 13 Retailers Wholesalers and Direct...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 13 Retailers, Wholesalers, and Direct Marketers Retailing Retailing Activities involved in selling merchandise to ultimate consumers Retailers act as both customers and marketers in their channels Evolution of Retailing Traced to trading posts such as the Hudson Bay Company and early peddlers Gave way to general stores Rise of supermarkets (1930s and 1940s) Discount stores (1950s), convenience stores (1960s), and off-price retailers(1980s and 1990s) Wheel of Retailing Hypothesis that each new type of retailer gains a competitive foothold by offering lower prices than current retailers, while maintaining profits through reduction of services Once established, more services are introduced and prices rise It then becomes vulnerable to new, lower price competitors Explain how retailers select target markets. Retailing Strategy Retailers base key decisions on two fundamental steps in the marketing strategy process: Selecting a target market Developing a retailing mix to satisfy the chosen target market Selecting a Target Market Consider size and profit potential of the market and the level of competition Retailers analyze demographic, geographic, and psychographic profiles to segment and select potential markets Merchandising Strategy Must decide on general merchandise categories, product lines, items within product lines, and the depth and width of assortments Must consider the needs and preferences of its target market Must also consider the overall profitability of each product line and category Category Management Category manager oversees an entire product line for both vendors and retailers and is responsible for the profitability of the product group Categories that underperform are at risk of being dropped regardless of the strength of the individual brands The Battle for Shelf Space Retailers are increasingly taking on the role of channel captain and have more power over how products are made available to customers Proliferation of new products increases the competition for shelf space Stockkeeping unit (SKU) Offering within a product line such as a specific size of laundry detergent Major retailers increasingly make demands from manufacturers―such as pricing and promotional concessions―in exchange for shelf space Customer Service Strategy Heightened customer service is one possible retailing strategy Goal is to attract and retain target customers to increase sales and profits Enhanced comfort through lounges, complimentary coffee, convenient restrooms Child-care services for customers Virtual assistance programs Pricing Strategy Markups and Markdowns Markup Amount that a retailer adds to a product’s cost to determine its selling price
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Other things being equal, stores that offer more services charge larger markups to cover their costs Other things being equal, stores with a higher turnover rate can cover their costs and earn a profit while charging a smaller
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/28/2011 for the course ADMS ADMS taught by Professor Kk during the Spring '11 term at York University.

Page1 / 4

CH13 - Chapter 13 Retailers Wholesalers and Direct...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online