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What is Retailing ?

Chapter-13: Retailing

Lecture-9

Course: Marketing Channels

(MKT 450)

Retailing consists of the sale of goods or merchandise from a

fixed location, such as a department store or kiosk, shop or by
post, in small or individual lots for direct consumption by the
purchaser or end user.

A retailer buys goods or products in large quantities from

manufacturers or importers,
importers either directly or through a

Faculty: Abdullah Al Faruq (AFq)

wholesaler, and then sells smaller quantities to the end-user.

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North South University (NSU)

Retailers are at the end of the supply chain and thereby,

manufacturing marketers see the process of retailing as a
necessary part of their overall distribution strategy.

Retailers forms the end-link between the end-users or consumers

and the marketers marketing-mix.

Types of Retailers

Types of Retailers (Cont.)

a. Department store

d. Supermarket

A department store is a retail establishment which specializes in selling

a wide range of products without a single predominant merchandise

household merchandise, organized into departments. It is larger in size and

line. They usually sell apparels, furniture, white-goods, toys, cosmetics,

has a wider selection than a traditional grocery store and it is smaller than
a hypermarket or superstore.

chocolates. For example, Almas in Bangladesh.

b. Category Killers
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A supermarket is a self-service store offering a wide variety of food and

Also known as big box retail chain such as Toys "R" Us which is focused

e. City Market/Open Market

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fixed locations either using a mobile kiosk, tent or a small physical shop.

on one or few categories of merchandise and offers a wide selection of

They charge fairly low price and is normally governed by way of

merchandise in these categories at relatively low prices.

c. Super Store/Hypermarket
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These are large scale retail stores widely branched into a market.

They have big parking, huge staffs and sell merchandise varying from white
goods to groceries in a discounted price. For example, Wal-mart.

A gathering of many retailers selling variety or similar merchandise in a

cooperative society.
f. Convenience store
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A convenience store is a small store or shop and are often located

alongside busy roads, or at gas/petrol stations or at a densely-populated
urban neighborhoods.

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Trade Deals for Retailers

Trade Deals for Retailers (Cont.)

a. Free Goods

e. Inventory Financing

This is a common form of trade deals whereby, a retailer receives free

goods from the manufacturer to be sold to the end-users.

inventories purchased thus enabling the retailer to earn profit with zero

b. Display Allowance
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investment in inventory.

A fixed fees paid to the retailer to display the product in the most

f. Cooperative Advertising

appropriate way during a consumer price promotion.

Strategic Issues in Retailing

This is a form of paying the retailer on the basis of how many products
have been sold after a certain period of time.

d. Slotting-allowance
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Manufacturers undertakes advertising related efforts of the retailer on their

own responsibility.
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c. Count-Recount
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A manufacturer increases the payment period for certain level of

a. Importance of Convenience to Consumers

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Convenience in retailing is measured on the basis of the time required to

This is a payment made to the retailer for the shelf-space to display a

make a purchase, getting to and from the store, getting in and out of the

new product that is marketed by the manufacturer.

store etc.

Strategic Issues in Retailing (Cont.)

Strategic Issues in Retailing (Cont.)

a. Importance of Convenience to Consumers (Cont.)

b. Increased Power of Retailers (Cont.)

Consumers of today highly prefers shopping convenient shopping

whose size, investment and business operation is significantly big compared

b. Increased Power of Retailers

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The concept of power-retailing sums up this strategic issue altogether i.e.

power-retailing is retailing activities that is being undertaken by retailers

environment which needs to be considered by almost every of retailers.

It has been noticed over past few years that retailers has been increasing

with general retailers.

becoming a dominant force to be reckon with in marketing channels.

Strategic Response by the Manufacturers to tackle Power

The reasons of this growth is mainly due to rising pressures on the retailers

Retailing

to perform due to rise in competition, usage of information technology in

a. Develop New Channel Technologies

the operation, usage of private label brands, utilization of consumer

segment information in marketing.

Manufacturer can develop new retail management strategies, techniques

and technology that can be shared with a retailer for their self-benefit

b. Enrich Roles of Consumer Sales Promotion

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Manufacturer can undertake intense consumer sales promotion such that

the product is pulled by the end-users rather than being pushed by the
retailer.

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Strategic Response by the Manufacturers to tackle Power

Retailing (Cont.)
c. Product line Expansion
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Manufacturers can expand their product line or brands to counter the ever
increasing demand of the private label or store brands.

d. Dual-Distribution
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Manufacturers can undertake or introduce dual distribution in the same

market to combat the power
power-retailers
retailers or create a sense of level playing
field.