Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic

Marketing: A

Global−Managerial

Approach, 14/e

13. Retailers, Wholesalers
    and Their Strategy
    Planning

Text © The McGraw−Hill

Companies, 2002

360 Chapter 13

Specialty shops usually
sell shopping products

Expand Assortment and Service—To Compete at a High Price

Now most conventional retailers are single-lineor limited-line stores—stores that

specialize in certain lines of related products rather than a wide assortment. Many

stores specialize not only in a single line, such as clothing, but also in a limited-line

within the broader line. Within the clothing line, a retailer might carry onlyshoes,

formal wear, men’s casual wear, or even neckties but offer depth in that limited line.

The main advantage of such retailers is that they can satisfy some target markets

better. Perhaps some are just more conveniently located near their customers. But

for most it’s because they adjust to suit specific customers. They try to build a long-

term relationship with their customers and earn a position as theplace to shop for

a certain type of product. But single-line and limited-line stores face the costly prob-

lem of having to stock some slow-moving items in order to satisfy the store’s target

market. Many of these stores are small—with high expenses relative to sales. So

they try to keep their prices up by avoiding competition on identical products.

Conventional retailers like this have been around for a long time and are still

found in every community. Many now face stiff competition from other types of

retailers. Even so, they are a durable lot and clearly satisfy some people’s needs. In

fact, in most countries conventional retailers still handle the vast majority of all

retailing sales.

However, this situation is changing fast. Nowhere is the change clearer than in

the United States. Conventional retailers are being squeezed by retailers who mod-

ify their mixes in the various ways suggested in Exhibit 13-1. Let’s look closer at

some of these other types of retailers.

In spite of consumer interest in Western products and new retailing formats, most retailing in Asia is still handled by small limited-line
stores, like the independently owned Filipino store on the left and the Japanese electronics one on the right.

A specialty shop—a type of conventional limited-line store—is usually small

and has a distinct “personality.” Specialty shops sell special types of shopping prod-

ucts—such as high-quality sporting goods, exclusive clothing, cameras, or even

antiques. They aim at a carefully defined target market by offering a unique prod-

uct assortment, knowledgeable salesclerks, and better service.

The specialty shop’s major advantage is that it caters to certain types of customers

whom the management and salespeople come to know well. This simplifies buying,

Single-line, limited-line
stores are being
squeezed