Managing Retailing, Wholesaling, and Logistics

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Managing Retailing, Wholesaling, and Logistics
Lecture 8
Place
Marketing Management, European ed
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Chapter Questions

• What major types of marketing intermediaries
  occupy this sector?
• What marketing decisions do these marketing
  intermediaries make?
• What are the major trends with marketing
  intermediaries?

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Retailing
Includes all the activities involved in selling
goods or services directly to final consumers for
personal, non-business use.
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Company-to-Consumer Channels
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Major Retailer Types

• Speciality store - Maplin
• Department store John Lewis
• Supermarket - Sainsbury
• Convenience store - Londis

• Discount store - Aldi
• Off-price retailer - TKMaxx
• Superstore Tesco Bar Hill
• Catalogue showroom - Argos

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Levels of Retail Service
Self-service - they even get you to scan the
barcodes on your purchases!
Self-selection
Limited service
Full service
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Retail Positioning Map
Tesco
Harrods
Aldi
Carphone Warehouse
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Indicators of Sales Effectiveness (KPIs)

• Number of people passing by location
• Percentage who enter store
• Percentage of those who enter who also buy
• Average amount spent per sale.

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Trends in Retailing

• New retail forms and combinations- eg coffee bar
  in a bookshop
• Growth of intertype competition
• Competition between store-based and
  non-store-based retailing (eg the Internet)
• Growth of giant retailers
• Decline of middle market retailers eg
  Woolworth, Debenhams, House of Fraser
• Growing investment in technology, Lean Thinking
• Global presence of major retailers
• Ebay and other Internet providers.

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Nonstore Retailing
Direct selling
Direct marketing
Buying service
Automatic vending
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Characteristics of Franchises

• The franchisor owns a trade or service mark and
  licenses it to franchisees in return for royalty
  payments
• The franchisee pays for the right to be part of
  the system
• The franchisor provides its franchisees with a
  system for doing business

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Retailers Marketing Decisions
Target market
Product assortment
Procurement
Prices
Services
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Retailers Marketing Decisions (cont.)
Store atmosphere
Store activities
Communications
Locations
Selfridges store in Birmingham
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Retailers Marketing Decisions (cont.)
General business districts
Regional shopping centres
Community shopping centers
Community shopping centres
Retail Parks
Retail Parks
Location within a larger store.
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Wholesaling Functions

• Selling and promoting
• Buying and assortment building
• Bulk breaking
• Warehousing

• Transportation
• Financing
• Risk bearing
• Market information
• Management services and counseling

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Major Wholesaler Types
Merchant
Full-service
Limited-service
Brokers and agents
Manufacturers
Specialized
Nisa-Todays warehouse - Scunthorpe
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Logistics

• That part of the supply chain process that
  plans, implements and controls the efficient,
  effective flow and storage of goods, services and
  related information from the point of origin to
  the point of consumption in order to meet
  customers requirements

Information, Control, Integration
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Market Logistics Planning

• Deciding on the companys value proposition to
  its customers
• Deciding on the best channel design and network
  strategy
• Developing operational excellence
• Implementing the solution

Value Proposition Total Product Concept The
Marketing Mix The USP
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Market Logistics

• Sales forecasting
• Distribution scheduling
• Production plans
• Finished-goods inventory decisions
• Packaging

• In-plant warehousing
• Shipping-room processing
• Outbound transportation
• Field warehousing
• Customer delivery and servicing

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Logistics Objectives

• Attain market coverage
• Deliver Customer Service
• Ensure Adherence to Product Specifications
• Cost-Containment

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Market Logistics Decisions

• How should orders be handled?
• Where should stock be located?
• How much stock should be held?
• How should goods be shipped?

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Logistics and Channel Management
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Relational Logistics Model
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The Five Logistics Mediators 1 - Inventory
Management

• Electronic Data Interchange (EDI)
• Just-in-Time Manufacturing (JIT)
• Quick-Response Logistics

Inventory -- often called stock -- is a tangible
asset capable of being mined, converted or
created. It is one of the largest investments in
any logistics system.
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The Five Logistics Mediators 2 - Transportation

• Product Decisions
• Location decisions
• Purchasing Decisions
• Pricing Decisions

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The Five Logistics Mediators 3 - Warehousing

• Movement
• Materials Handling
• Storage
• Information Transfer

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The Five Logistics Mediators 4 - Purchasing

• Forecasting Materials Demand
• Selection of suppliers sourcing
• Minimizing transaction and product costs
• Maximizing transaction and product quality

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The Five Logistics Mediators 5 - Packaging

• Containment
• Protection
• Apportionment
• Unitization
• Communication

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LOGISTICS TRENDS
SAME TIME, SAME PLACE DISTRIBUTION
Technology-driven reduction in waiting times
between channel members. BOUNDARYLESS
DISTRIBUTION Multiple market entry facilitated by
coordinated logistics systems. THIRD-PARTY
LOGISTICS Channel members are increasingly
outsourcing logistics functions. STRATEGIC
LOGISTICS PARTNERING Alliances between channel
members will become a mainstay of competitive
distribution advantage.
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Determining Optimal Order Quantity
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Transportation Factors

• Speed
• Frequency
• Dependability
• Capability
• Availability
• Traceability
• Cost

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Sources
Banks see chart from Economist, 8nov08
Minerals and Mining See USGS Insurance see
ABI website
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See website www.sginns.co.uk for links to each
business segment
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The Thiepval Memorial, the Memorial to the
Missing of the Somme