MARKETING 211 Principles of Marketing

RETAILING & WHOLESALING

RETAILING

RETAILING
Retailing refers to the business activity of selling goods or services to the final consumer. Retailer any business firm that sells mainly to final consumer. Manufacturer produces the finished goods. Final consumer one who uses the product.

Functions:
They provide convenience; They provide guarantee and service; They provide financing of transactions; They perform promotional activities; They perform storage functions; They perform intelligence function for the manufacturer They serve as buying agent of the consumers.

Functions:
CONVENIENCE they are located near the ultimate consumers. They operate at hours more convenient to the consumers. GUARANTEE & SERVICE Because of his accessibility, retailers can immediately replace a defective product or perform services like installation of the purchased item.

Functions:
FINANCING provide financing by selling on credit terms. PROMOTION they stimulate sales by display of products and other promotional activities. STORAGE they serve as storage for things that the consumer may not need to buy for now or the manufacturers wont have to absorb or forego production.

Functions:
INTELLIGENCE they are in a better position to gather information from the consumers and relay them to the manufacturers. BUYING AGENT they have the time, skill and bargaining power to perform the task of selecting the products & making them available to the consumers.

TYPES OF RETAILERS

Retailers are classified accdg. To:

Sales volume
Small, medium and large

Product mix offered

General merchandise & specialty stores

Form of ownership
Chain store, independent & franchise stores

Method of operation
Full service retailers, supermarkets, discount stores or non-store retailers.

By Sales Volume
SMALL

retailers - have annual sales volume of less than P100,000. MEDIUM-SIZED retailers - have sales volume of P100,000 to P1million. LARGE retailers - have sales volume of more than P1 million annually.

By Product Mix Offered

GENERAL MERCHANDISE stores carry a great variety of product lines with a number of assortments in each product line. SPECIALTY STORES those that carry a specific line of products.

By Form of Ownership
CHAIN store composed of two or more outlets that are owned commonly by a person or company. INDEPENDENT Stores owned and operated by independent retailers. FRANCHISE stores an independent retailer given a right, usually exclusive, by the manufacturer to sell his products in a definite market area.

Method of Operation:
FULL SERVICE RETAILERS assistance in a variety of ways is extended to the customers. Salespeople answer product related questions. SUPERMARKETS a large department store that offers a variety of goods. There is minimum customer service.

Method of Operation:
DISCOUNT STORES self-service retailer that sells a wide variety of goods at less than traditional retail price. Only saleable items are carried to make its discount operations more feasible. NON-STORE RETAILERS those who sell outside the store. Consists of at-home retailers, telephone retailers, vending machine & mail-order retailers.

WHOLESALING

WHOLESALING:

Refers to all activities involved in selling goods and services to those who intend to resell or use the same goods for producing goods or services. WHOLESALER one who performs wholesaling activities.

FUNCTIONS:
They anticipate customer needs; They do selling and promotion; Financing; Storage; Breaking bulk; Transportation; Risk taking.

Functions:
ANTICIPATING CUSTOMER NEEDS Since customers buy only what they need at this time, the wholesaler anticipates these needs and places his orders to a manufacturer months ahead. SELLING & PROMOTION They motivate the customers to make purchases. They perform the task of locating & developing potential market/s.

Functions:
FINANCING They provide financing services and credit line to both customers and retailers. STORAGE They perform this function when the manufacturer or retailer is not in a position to accept such task. BREAKING BULK They purchased in bulk but sell in smaller quantities to retailers.

Functions:
TRANSPORTATION Since their location is near their customers, delivery becomes faster & may reduce costs. RISK TAKING assumes the risks of not selling the goods or losing the goods due to theft, fire, obsolescence and other hazards.

TYPES OF WHOLESALERS

Classification accdg to Function:

FULL FUNCTION WHOLESALERS

Perform most, if not all, functions

LIMITED FUNCTION WHOLESALERS

Provide wholesaling functions like order taking & processing

INDUSTRIAL WHOLESALERS
They served the industrial market.

Full Function Wholesalers:

MERCHANT

WHOLESALERS

independently owned establishments which take title to the merchandise they carry. Manufacturers have very little control over them. SALES OFFICES & BRANCHES - a manufacturer owned & controlled wholesale outlet. Sales Branches carries inventories. Sales Offices are organized to maximize sales.

Full Function Wholesalers:

AGENTS acts as representatives of manufacturers in the selling process.

Classified as manufacturers agents and selling agents.

BROKERS neutral middleman that can serve either the buyer or seller. COMMISSION HOUSES they negotiate the sale of the products including prices, deliver, and payment

Limited Function Wholesalers:

DROP SHIPPERS serve the intermediaries by buying the products from the producers & selling them to retailers & other customers. TRUCK DISTRIBUTORS operate warehouses and trucks involved in wholesaling. MAIL-ORDER WHOLESALERS sell through mail. Example are books and magazine publishers.

Limited Function Wholesalers:

CASH & CARRY WHOLESALER sell to customers in their warehouse on cash basis. COOPERATIVES they stock sufficient inventory for distribution to various units of the members. RACK JOBBERS maintain their own racks within a retail establishment. They sell them to retailers & consumers. Unsold products are returned to producer.

Industrial Wholesalers:
They serve the industrial market. They serve the retailers. They stock products which they later sell. They serve the customers by acting as purchasing agent , storing and delivering goods, extending credit, providing service and supplying information.

Any Questions???

Quiz: sheet of paper

What is the importance of KCC Mall of Gensan to the people of GSC, the businesses of GSC and its neighboring areas and the local government? Explain in 7-10 sentences only. 15pts