Retailing and Wholesaling
Previewing the Concepts: Chapter Objectives
Explain the role of retailers and wholesalers in the distribution channel.
Describe the major types of retailers and give examples of each.
Identify the major types of wholesalers and give examples of each.
Explain the marketing decisions facing retailers and wholesalers.
This chapter is a continuation of the prior chapter on marketing channels; it provides
more detail on retailing and wholesaling, two very important concepts in the value
It begins with a discussion of retailers and the challenges they face. There are many types
of retailers. These retailers can be classified according to several characteristics,
including the amount of service they offer, the breadth and depth of their product lines,
the relative prices they charge, and how they are organized.
Retailers are always searching for new strategies to attract and retain customers. The
major decisions retailers need to make are centered around their target market and
positioning, their product assortment and services, their price, their promotion strategies,
and where they are located.
Retailing is facing many challenges, including new retail forms, such as warehouse
stores. The wheel of retailing concept says that many new retailing forms begin as low-
margin, low-price, low-status operations. They challenge established retailers, and then
the new retailers’ success leads them to upgrade their facilities and offer more services.
In turn, their costs increase, and eventually they become like the conventional retailers
they replaced. The cycle begins again.
Wholesalers buy mostly from producers and sell mostly to retailers, industrial customers,
and other wholesalers. As a result, many of this country’s largest and most important
wholesalers are largely unknown to final consumers. Wholesalers provide important
services, however, and they add value through performing one or more of several
There are many types of wholesalers, including merchant wholesalers, agents and
brokers, and manufacturers’ sales branches and offices. They face many of the same