Managing Retailing, Wholesaling, and Logistics

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Petlaca Fatima – chapter 16KK
International Burch University
Teoman Duman

MANAGING RETAILING, WHOLESALING, AND LOGISTICS

Retailing

Retailing includes all the activities involved in selling goods or services directly to final consumers for personal, nonbusiness use. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing.

Types of Retailers

Consumers today can shop for goods and services in a wide variety of retail organizations. There are store retailers, nonstore retailers, and retail organizations. Perhaps the best-known type of retailer is the department store. Retail-store types pass through stages of growth and decline that can be described as the retail life cycle. The most important retail-store types are described in Table 16.1.

Specialty store: Narrow product line. Athlete's Foot, Tall Men, The Limited, The Body Shop. Department store: Several product lines. Sears, JCPenney, Nordstrom, Bloomingdale's. Supermarket: Large, low-cost, low-margin, high-volume, self-service store designed to meet total needs for food and household products. Kroger, Jewel, Food Emporium. Convenience store: Small store in residential area, often open 24/7, limited line of high-turnover convenience products plus takeout. 7-Eleven, Circle K. Discount store: Standard or specialty merchandise; low-price, low-margin, high-volume stores. Wal-Mart, Kmart, Circuit City, Crown Bookstores. - Off price retailer: Leftover goods, overruns, irregular merchandise sold at less than retail. Factory outlets, independent off-price retailers. Filene's Basement, T.J. Maxx, warehouse clubs Sam's Clubs, Price-Costco, BJ's Wholesale. Superstore: Huge selling space, routinely purchased food and household items, plus services (laundry, shoe repair, dry cleaning, check cashing). Category killer (deep assortment in one category) such as Petsmart, Staples, Home Depot; combination store such as Jewel, Osco; hypermarket (huge stores that combine supermarket, discount, and warehouse retailing), such as Carrefour in France, Pyrca in Spain, and Meijer's in the Netherlands. Catalog showroom: Broad selection of high-markup, fast-moving, brand-name goods sold by catalog at discount. Customers pick up merchandise at the store. Inside Edge Ski and Bike.

TABLE 16.1

Retailers can position themselves as offering one of four levels of service: 1. Self-service - Self-service is the cornerstone of all discount operations. Many customers are willing to carry out their own locate-compare-select process to save money. 2. Self-selection - Customers find their own goods, although they can ask for assistance. 3. Limited service - These retailers carry more shopping goods, and customers need more information and assistance. The stores also offer services (such as credit and merchandise-return privileges). 4. Full service - Salespeople are ready to assist in every phase of the locate-compare-select process.

By combining these different service levels with different assortment breadths, we can distinguish the four broad positioning strategies available to retailers :

1. Bloomingdale's - Stores that feature a broad product assortment and high value added. Stores in this quadrant pay close attention to store design, product quality, service, and image. Their profit margin is high, and if they are fortunate enough to have high volume, they will be very profitable. 2. Tiffany - Stores that feature a narrow product assortment and high value added. Such stores cultivate an exclusive image and tend to operate on a high margin and low volume. 3. Sunglass Hut -Stores that feature a narrow line and low value added. Such stores keep their costs and prices low by centralizing buying, merchandising, advertising, and distribution. 4. Wal-Mart-Stores that feature a broad line and low value added. \

Nonstore retailing falls into four major categories: direct...
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