Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e
- Retailers, Wholesalers
and Their Strategy
Planning
Text © The McGraw−Hill
Companies, 2002Retailers, Wholesalers, and Their Strategy Planning 357The other reason, perhaps even more basic, is that different types of retailers and
wholesalers have evolved to meet different needs in the marketplace. As we empha-
sized from the start, not all customers have the same needs. Seeing the different
ways that retailers and wholesalers have modified their strategies will make it clear
that it is the whole strategy, not just one aspect of it, that ultimately is a success or
failure. This may seem obvious, but apparently not to everyone.
A few years ago, some people were proclaiming that marketers needed to throw
out all of the thinking that anyone had ever done about retailing and wholesaling
because the Internet had changed everything. It is certainly true that the Internet
has fostered dramatic innovations and that many benefits (for firms and for consumers)
are yet to be realized. But that doesn’t mean that the Internet changes customers’
basic needs, or wants, or for that matter the role that any sort of specialized middle-
man (whether in a bricks-and-mortar facility, online, or both) plays in the Place system.
Unfortunately, people who forget the lessons of the past are condemned to repeat
them. Many creative people who had exciting ideas for online retailing innovations
failed precisely because they didn’t learn that. Many fell into the trap of thinking
that all customers were the same—or that customers would be satisfied just because
some aspect of a firm’s marketing mix met some needs really well—even if it ignored
other needs. Yet it doesn’t matter if an online retailer has an incredible assortment
if there’s no way for buyers to get live customer service when they can’t get the
order page to work. It doesn’t matter if a seller posts a low price if the products are
not actually available to ship or if shipping costs make the real price exorbitant.
And it isn’t convenient to return a green shirt that looked blue on the website,
even if the website is conveniently available 24/7.
So in general, in this chapter we will concentrate on strategy decisions that apply
to allretailers and wholesalers. But we will also highlight the differences that are
most significant in terms of the ongoing evolution. We’ll start with a closer look at
retailing, and then cover wholesaling.The Nature of Retailing
Retailingcovers all of the activities involved in the sale of products to final con-
sumers. Retailers range from large chains of specialized stores—like Toys “R” Us—to
individual merchants like the woman who sells baskets from an open stall in the
central market in Ibadan, Nigeria. Some retailers operate from stores and others
operate without a store—by selling online, on TV, with a printed catalog, from
vending machines, or even in consumers’ homes. Most retailers focus on selling
physical goods produced by someone else. But in the case of service retailing—like
dry cleaning, fast food, tourist attractions, online bank accounts, or one-hour photo
processing, for example—the retailer is also the producer. Because they serve indi-
vidual consumers, even the largest retailers face the challenge of handling small
transactions. And the total number of transactions with consumers is much greater
than at other channel levels.
Retailing is crucial to consumers in every macro-marketing system. For example,
consumers spend $3.2 trillion(that’s $3,200,000,000,000!) a year buying goods and
services from U.S. retailers.
The nature of retailing and its rate of change are generally related to the stage
and speed of a country’s economic development. In the U.S., retailing is more varied
and more dynamic than in most other countries. By studying the U.S. system, and
how it is changing, you will better understand where retailing is headed in other
parts of the world.