Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e- Retailers, Wholesalers
and Their Strategy
Planning
Text © The McGraw−Hill
Companies, 2002358 Chapter 13
Retailers interact directly with final consumers—so strategy planning is critical
to their survival. If a retailer loses a customer to a competitor, the retailer is the
one who suffers. Producers and wholesalers still make theirsale regardless of which
retailer sells the product.Different consumers prefer different kinds of retailers. But many retailers either
don’t know or don’t care why. All too often, beginning retailers just rent a store and
assume customers will show up. As a result, in the U.S. about three-fourths of new
retailing ventures fail during the first year. Even an established retailer can quickly
lose its customers if they find a better way to meet their needs. To avoid this fate, a
retailer should have a clear strategy. A retailer needs to carefully identify possible tar-
get markets and try to understand why these people buy where they do. That helps
the retailer tune its marketing mix to the needs of specific target markets.^2Most retailers in developed nations sell more than one kind of product. So their
product assortment (including brands carried) can be critical to their success. Yet
it’s best to take a broader view in thinking about the Product strategy decisions for
a retailer’s marketing mix. The retailer’s wholeoffering—assortment of goods and
services, advice from salesclerks, convenience, and the like—is its “Product.”
Different consumers have different needs—and needs vary from one purchase sit-
uation to another. Which retailer’s Product offers the best customer value depends
on the needs that a customer wants to satisfy. Whatever the effect of other con-
sumer needs, economic needs are usually very important in shaping the choice of a
retailer. Social and individual needs may also come into play. Our discussion of con-
sumer behavior and needs in Chapter 6 applies here.Features of a retailer’s offering that relate to economic needs include- Convenience(location, available hours, parking, finding needed products, fast
checkout). - Product selection(width and depth of assortment, quality).
- Special services(special orders, home delivery, gift wrap, entertainment).
- Fairness in dealings(honesty, correcting problems, return privileges, purchase
risks). - Helpful information(courteous sales help, displays, demonstrations, product
information). - Prices(value, credit, special discounts, taxes or extra charges).
Some features that relate to social and emotional factors include - Social image(status, prestige, “fitting in” with other shoppers).
- Shopping atmosphere(comfort, safety, excitement, relaxation, sounds, smells).
In later chapters we’ll go into much more detail on the price and promotion deci-
sions that all firms—including retailers and wholesalers—make.
At this point it is important to see that in developing a strategy a retailer should
consciously make decisions that set policies on allof these factors. Each of them
can impact a customer’s view of the costs and benefits of choosing that retailer. And
in combination they differentiate one retailer’s offering and strategy from another.
If the combination doesn’t provide superior value to some target market, the retailer
will fail.Retailer’s whole
offering is its Product
Features of offering
relate to needs
Strategy requires
carefully set policies
Consumers have
reasons for buying
from particular retailers
Planning a Retailer’s Strategy