Marketing - Chapter 14.docx

Chapter 14: Retailing Retailing – the set of business activities that add value to products and services sold to consumers for their personal or family use; includes products bought at stores, through catalogues, and over the Internet, as well as services like fast-food restaurants, airlines, and hotels Wholesalers – those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods to retailers or industrial or business users The “Big Middle” refers to that part of the market in which the most successful retailers compete because the biggest potential customer base resides there. A firm does not have to be in the Big Middle to be successful in the short term, and successful firms typically do not start there. Firms get to the Big Middle through innovations in products, formats, or operational excellence or some combination of these that lead to great value. - If firm has low-price they can move towards Big-Middle segment - If firm has high price but is innovative, they can move towards Big-Middle segment - If firm has high price and no premium offerings, they cannot The Wheel of Retailing 1. Outlet starts with: Low prices, low margins, low status - as time passes, outlet adds services 2. Outlet now has: Higher prices, higher margins, higher status - as more time passes, outlet adds still more services 3. Outlet now has: Still higher prices, still higher margins, still higher status 4. New form of outlet enters retailing environment with characteristics of outlet Box 1 Value retailers – those in the Big Middle – continue to improve their “shopability”, providing more convenient store layouts and shopping experiences that make the task faster and easier. Private-Label Brands – brands developed and marketed by a retailer and available only from that retailer; also called store brands Share of Wallet – the percentage of the customer’s purchases made from a particular retailer Types of Retailers 1) Food Retailers a) Convenience Stores (7-Eleven) b) Conventional supermarket (Sobey’s) c) Big-Box Food Retailer (supercentre, hypermarket, warehouse club); larger than conventional supermarket and carries non-food items (Costco) 2) General Merchandise Retailers a) Discount