Retailing is all the activities in selling goods or services directly to final customers for personal, nonbusiness use, no matter how or where sold. A retailer (or retail store) is any business enterprise whose sales volume comes primarily from retailing. Three types of retailers are store retailers, nonstore retailers, and retail organizations. Types of store retailers include specialty store, department store, supermarket, convenience store, drug store, discount store, extreme value or hard-discount store, off-price retailer, superstore, catalog showroom. They can position themselves as offering one of four levels of service: self-service, self-selection, limited service, and full-service. Nonstore retailing falls into four major categories: direct selling, direct marketing, automatic vending, and buying service. Corporate retailing organizations include corporate chain store, voluntary chain, retailer cooperative, consumer cooperative, franchise organization, and merchandising conglomerate. These organizations have greater economies of scale, purchasing power, brand recognition, and better-trained employees compared with independent stores.
Long-term trends in the new retail marketing environment are evident. One is that new retail firms are merging to better satisfy customers’ needs for convenience. Another is growth in inter-type competition with different types of stores competing for the same consumers with the same type of merchandise. Also, store-based and nonstore based retailers are competing with each other.
Retailer marketing decisions include target market, channels, product assortment, procurement, prices, services, store atmosphere, store activities and experiences, communications, and locations.
Private label brands are brands that retailers and wholesalers develop. These brands can be more profitable. Generics are unbranded, plainly packaged, less expensive versions of common products, priced low because of low-cost labeling, minimal advertising, and sometimes lower-quality ingredients. They have several success factors. Retailers typically give more prominent display to their own brands and make sure they are well stocked. Also, the growing power of store brands has benefited from the weakening of national brands. Many consumers have become more price sensitive.
Wholesaling is all the activities in selling goods or services to those who buy for resale or business use. It excludes manufacturers, farmers, and retailers. The major types of wholesalers include merchant wholesalers, full-service wholesalers, limited-service wholesalers, brokers and agents, manufactures’ and retailers’ branches and offices, and specialized wholesalers. They differ from retailers in several ways. First, they pay less attention to promotion, atmospheres, and location because they deal with business customers rather than final customers. Second, wholesale transactions are usually larger than retail transactions, and they cover a larger trade area. Third, wholesalers and retailers comply with different legal regulations and taxes. Wholesalers are more efficient in performing one for more of the following functions: selling and promoting, buying and assortment building, bulk breaking, warehousing, transportation, financing, risk bearing, market information, and management services and counseling. Trends in wholesaling include adapting their services to meet their suppliers’ and target customers’ changing needs; increasing asset productivity; and improving strategic decisions about target markets, product assortment, services, pricing, communications, and distribution. However, they remain vulnerable to the fierce resistance to price increases and the winnowing out of suppliers based on cost and quality.
Market logistics is planning the infrastructure to meet demand, then implementing and controlling the physical flows of materials and final goods from points of origin to points of use, to meet customer requirements at a profit. It has four steps: deciding on the company’s value proposition to its customers; selecting the best channel design and network strategy for reaching the customers; developing operational excellence in sales forecasting, warehouse management, transportation management, and materials management; and implementing the solution with the best information systems, equipment, policies, and procedures. Integrated logistics systems include materials management, material flow systems, and physical distribution, aided by information technology to shorten the order-cycle time, reduce errors, and improve control.
Firms should make four major decisions about its market logistics. First they should decide how orders should be handled. This is known as order processing. Their goal is to shorten their order-to-payment cycle, which is the elapsed time between an order’s receipt, delivery, and payment. Second, they should decide where stock should be located. This is known as warehousing. Every company must store finished goods until they are sold. Storage warehouses store goods for moderate to long periods of time. Distribution warehouses receive goods from various company plants and suppliers and move them out as soon as possible. Automated warehouses employ advanced materials-handling systems under the control of a central computer. Third, they must decide the amount of stock to be held. This is known as inventory. Companies need to balance order-processing costs and inventory-carrying costs. Fourth, companies must decide how goods should be shipped. This is known as transportation. This affects product pricing, on-time delivery performance, and the condition of the goods when they arrive, all of which affect customer satisfaction.
Example: Apple is one of the leading retailers for customer service. With their ahead of the game product innovations they know how to treat their customers. When Apple comes out with a new product, previous Apple owners are on the list to buy it even before it becomes available. They also offer a great return policy. Their online customer support service is customer friendly with not having to go through a maze to be able to talk to someone. And they can provide quick feedback. Their customer loyalty proves their success.
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