Download Chapter 13

CHAPTER 13
Retailing, Wholesaling
and Interactive
Marketing
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 1
2
After reading this chapter you should
be able to:
• Identify retailers in terms of the utilities they
provide.
• Explain the alternative ways to classify retail
outlets.
• Understand the many methods of nonstore
retailing.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 2
After reading this chapter you should
be able to:
• Develop retailing mix strategies over the life
cycle of a retail store.
• Describe the types and functions of firms that
perform wholesaling activities.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 3
After reading this chapter you should
be able to:
• Understand what interactive marketing is and
how it creates customer value, customer
relationships, and customer experiences in the
new marketspace.
• Explain why certain types of products and
services are particularly suited for interactive
marketing.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 4
After reading this chapter you should
be able to:
• Describe why consumers shop and buy online
and how marketers influence online purchasing
behaviour.
• Distinguish between the use of multiple
channels and multichannel marketing in
reaching online consumers.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 5
After reading this chapter you should
be able to:
• Recognise the different roles played by
transactional websites and promotional
websites in multichannel marketing.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 6
The Value of Retailing
• Retailing is an important marketing activity. Not only
do producers and consumers meet through retailing
actions, but retailing also creates customer value and
has a significant impact on the economy.
• To consumers, the value of retailing is in the form of
utilities provided, which were discussed in Chapter 1.
• Retailing’s economic value is represented by the
people employed in retailing as well as by the total
amount of money exchanged in retail sales.
• Retailing also provides many with their first step in
their business careers.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 7
Consumer Utilities Offered by Retailing
• The utilities provided by retailers create value for
consumers. Time, place, possession and form utilities
are offered by most retailers in varying degrees, but
one utility is often emphasised more than others.
• Many retailers offer a combination of the four basic
utilities.
• Some supermarkets, for example, offer convenient
locations (place utility) and are open 24 hours (time
utility). In addition, consumers may seek additional
utilities such as entertainment, recreation or
information.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 8
Concept Check
1. When Jamu makes swimsuits cut to a
customer’s exact preferences and
measurements, what utility is provided?
2. What utility is offered by a 24-hour convenience
store?
1. Form utility
2. Time utility
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 9
Classifying Retail Outlets
• For manufacturers, consumers, and the economy,
retailing is an important component of marketing that
has several variations.
• First, form of ownership distinguishes retail outlets on
the basis of whether individuals, corporate chains or
contractual systems own the outlet.
• Second, level of service is used to describe the
degree of service provided to the customer. Three
levels of service include self-, limited- and full-service
retailers.
• Finally, the type of merchandise line describes how
many different types of products a store carries and
in what assortment.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 10
Form of Ownership
• Independent Retailer: One of the most common forms of retail
ownership is the independent business, owned by an individual.
Small retailers account for most of the retail establishments in
both Australia and New Zealand.
• Corporate Chain: A second form of ownership, the corporate
chain, involves multiple outlets under common ownership. If
you’ve ever shopped at Coles, Bunnings, Bi-Lo, Kmart or Target,
you’ve shopped at a chain outlet owned by Wesfarmers Corp.
• Contractual System: Contractual systems involve independently
owned stores that band together to act like a chain. The three
kinds are retailer-sponsored co-operatives, wholesalersponsored voluntary chains, and franchises.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Number of franchises in selected chains
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 12
Level of Service
• Most customers perceive little variation in retail
outlets by form of ownership.
• Rather, differences among retailers are more obvious
in terms of level of service.
• The levels of service are:
– Self-service is at the extreme end of the level-of-service
continuum because the customer performs many functions
and little is provided by the outlet.
– Limited-service outlets provide some services, such as credit
and merchandise return, but not others, such as custommade clothes.
– Full-service retailers, which include most speciality stores
and department stores, provide many services to their
customers.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 13
Merchandise Line
• Retail outlets also vary by their merchandise lines,
the key distinction being the breadth and depth of the
items offered to customers (Figure 13–2).
• Depth of product line means that the store carries a
large assortment of each item, such as a shoe store
that offers running shoes, dress shoes and children’s
shoes.
• Breadth of product line refers to the variety of
different items a store carries.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 14
Breadth versus depth of merchandise
lines – fig 13.2
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 15
Breadth versus depth of merchandise
• Depth of Line: Stores that carry a large assortment (depth) of a
related line of items are limited-line stores.
– For example, AMart All Sports stores carry considerable depth in
sports equipment ranging from weight-lifting accessories to running
shoes.
– Stores that carry tremendous depth in one primary line of
merchandise are single-line stores. Both limited- and single-line
stores are often referred to as speciality outlets.
• Breadth of Line: Stores that carry a broad product line, with
limited depth, are referred to as general merchandise stores.
– The breadth and depth of merchandise lines are important
decisions for a retailer. Traditionally, outlets carried related lines of
goods. Today, however, scrambled merchandising, offering several
unrelated product lines in a single store, is common.
– there is also competition between very dissimilar types of retail
outlets, or intertype competition
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 16
Non-store Retailing
•
•
•
•
Most of the retailing examples discussed earlier in the chapter,
such as corporate chains, department stores, and limited- and
single-line speciality stores, involve store retailing.
Many retailing activities today, however, are not limited to sales
in a store.
Non-store retailing occurs outside a retail outlet through
activities that involve varying levels of customer and retailer
involvement.
Six forms of non-store retailing are:
1.
2.
3.
4.
5.
6.
automatic vending.
direct mail and catalogues.
television home shopping.
online retailing.
Telemarketing.
direct selling.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 17
Wholesaling
• Many retailers depend on intermediaries that engage
in wholesaling activities — selling products and
services for the purposes of resale or business use.
• There are several types of intermediaries, including:
– wholesalers and agents (described briefly in Chapter 12).
– Manufacturers’ sales offices.
• These are all important to understand as part of the
retailing process.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 18
Wholesaling – Differences in
Intermediaries
• Merchant wholesalers are independently owned firms that take
title to—that is, they own—the merchandise they handle.
• Unlike merchant wholesalers, agents and brokers do not take
title to merchandise and typically provide fewer channel
functions.
• They make their profit from commissions or fees paid for their
services, whereas merchant wholesalers make their profit from
the sale of the merchandise they own.
• Unlike merchant wholesalers, agents and brokers,
manufacturer’s branches and sales offices are wholly owned
extensions of the producer that perform wholesaling activities.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 19
Concept Check
1. What is the difference between merchant
wholesalers and agents?
2. How are brokers different from agents?
1. Merchant wholesalers are independently owned
firms that take title to the merchandise they
handle, whereas agents do not take title to
merchandise and typically provide fewer channel
functions.
2. Brokers, unlike agents, usually have no
continuous relationship with the buyer or seller
but negotiate a contract between two parties and
then move on to another task.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 20
Anytime, Anywhere, Anyway: The New
Marketing Mantra
• The Internet and the World Wide Web’s promise of immediacy
and interactivity have been hailed as a compelling new
technology that would revolutionise marketing.
• It hasn’t gone that far but it has changed many things in
marketing.
• Internet/Web technology has empowered consumers to seek
information, evaluate alternatives and make purchase decisions
on their own terms and conditions.
• At the same time, this technology has challenged marketers to
deliver to consumers more (selection, service, quality,
enjoyment, convenience, and information) for less (money, time,
effort).
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 21
Computer Processor Speeds
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 22
Creating Customer Value, Relationships and
Experiences in the New Marketspace
• Consumers and companies populate two market environments
today.
• One is the traditional marketplace where buyers and sellers
engage in face-to-face exchange relationships in a material
environment characterised by physical facilities (stores and
offices) and mostly tangible objects.
• The other is the marketspace, an Internet/Web-enabled digital
environment characterised by ‘face-to-screen’ exchange
relationships and electronic images and offerings.
• The existence of two market environments has benefited
consumers tremendously as consumers can shop for and
purchase a wide variety of products and services in either
market environment.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 23
Customer Value Creation in
Marketspace
• Despite the widespread interest in marketspace, its economic
significance remains small compared with the traditional
marketplace.
• Marketers believe that the possibilities for customer value
creation are greater in marketspace than in the traditional
marketplace.
• Recall from Chapter 1 that marketing creates time, place, form
and possession utilities for customers, thereby providing value.
• In marketspace, the provision of direct, on-demand information
is possible from marketers anywhere to customers anywhere at
any time.
• Why? Operating hours and geographical constraints do not exist
in marketspace.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Interactivity, Individuality and Customer
Relationships in Marketspace
• Marketers also benefit from two unique capabilities of
Internet/Web technology that promote and sustain customer
relationships.
• One is interactivity; the other is individuality.
• Both capabilities are important building blocks for buyer–seller
relationships.
• For these relationships to occur, companies need to interact with
their customers by listening and responding to their needs.
• Marketers must also treat customers as individuals and
empower them to (1) influence the timing and extent of the
buyer–seller interaction and (2) have a say in the kind of
products and services they buy, the information they receive,
and in some cases, the prices they pay.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 -25
The Online Consumer
• Online consumers differ from the general population
in one important respect.
• They own or have access to a computer or an
Internet/Web-enabled device, such as a wireless
cellular telephone.
• Online consumers are the subsegment of all
Internet/Web users who use this technology to
research products and services and make purchases.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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What Online Consumers Buy
•
•
•
Much still needs to be learned about online consumer purchase
behaviour.
Although research has documented the most frequently
purchased products and services bought online, marketers also
need to know why these items are popular.
There are six general product and service categories that
dominate online consumer buying today and for the
foreseeable future. These are:
–
–
–
–
–
–
Items for which product information is an important part of the
purchase decision but prepurchase trial is not necessarily critical.
items for which audio or video demonstration is important
items that can be delivered digitally
Unique items, such as collectibles
items that are regularly purchased and where convenience is very
important.
highly standardised products and services for which information
about price is important.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Why Consumers Shop and Buy Online
• Marketers emphasise the customer value-creation
possibilities, the importance of interactivity,
individuality and relationship building, and producing
customer experience in the new marketspace.
• However, consumers typically refer to six reasons
why they shop and buy online:
–
–
–
–
–
–
Convenience.
Choice.
Customisation.
Communication.
Cost.
Control.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Why Consumers Shop and Buy Online
• Convenience: Online shopping and buying is
convenient, no need to find a park on a busy day in a
shopping centre or leave your home or office.
• Choice. has two dimensions. First, choice exists in
the product or service selection offered to consumers
and secondly choice assistance is also important.
• Customisation. arises from Internet/Web-enabled
capabilities that make possible a highly interactive
and individualised information and exchange
environment for shoppers and buyers.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 29
Why Consumers Shop and Buy Online
• Communication. can take three forms (1) marketer-to-consumer
e-mail notification, (2) consumer-to-marketer buying and service
requests and (3) consumer-to-consumer chat rooms and instant
messaging, which includes viral marketing.
• Cost. Internet/Web-enabled software permits dynamic pricing,
the practice of changing prices for products and services in real
time in response to supply and demand conditions.
• Control. The final reason consumers prefer to buy online is the
control it gives them over their shopping and purchase decision
process. Online shoppers and buyers are empowered
consumers, readily using Internet/Web technology to seek
information, evaluate alternatives and make purchase decisions
on their own time, terms, and conditions.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 30
Why consumers shop and buy online
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 31
Concept Check
1. What is viral marketing?
2. What are the six reasons consumers prefer to
shop and buy online?
1. Viral marketing is an Internet/Web-enabled
promotional strategy that encourages individuals
to forward marketer-initiated messages to others
via e-mail.
2. They are: convenience, choice, customization,
communication, cost, and control.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 32
Integrating Multiple Channels with
Multichannel Marketing
• Companies often employ multiple marketing channels
for their products and services.
• Dual distribution is the term used to describe this
practice, which focuses on reaching different
consumers through different marketing channels.
• Multichannel marketing is the blending of different
communication and delivery channels that are
mutually reinforcing in attracting, retaining and
building relationships with consumers who shop and
buy in the traditional marketplace and marketspace.
• Multichannel marketing seeks to integrate a firm’s
communication and delivery channels, not
differentiate them.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 33
Concept Check
1. Multichannel marketing is __________________.
1. The blending of different communication and
delivery channels that are mutually reinforcing in
attracting, retaining, and building relationships
with consumers who shop and buy in the
traditional marketplace and marketspace.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 34
Finish
• Questions?
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
13 - 35