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

370 Chapter 13

Another possible set of costs occurs if a product must be returned. That, of course,

assumes you get what you order. The Internet is the ultimate weapon for fly-by-night

operators. Fraud is already a big problem.

Retailers of every description are experimenting with selling on the Internet.

They range from department stores like Bloomingdale’s and Dillard’s to discounters

like Target and Wal-Mart to limited-line retailers like Virtual Vineyards (wine) and

the Disney Store (apparel, toys) to service providers like American Express and FTD

(flower deliveries). You can even buy virtual underwear from Joe Boxer.

None of these retailers knows what will come of Internet selling. And some of

the initial results have been surprises. For example, many orders on Wal-Mart’s

website are from U.S. citizens who are in the military overseas. Regardless of sur-

prises, retailers need to work to understand the longer-term impact Internet selling

will have on their market. In retailing, as new formats and concepts are refined,

they often quickly have an impact on existing companies. It is very likely that the

Internet will do just that, as it has already done with many types of wholesaling.^20

We’ve talked about many different types of retailers and how they evolved. Ear-

lier, we noted that no single characteristic provided a good basis for classifying all

retailers. Now it helps to see the three-dimensional view of retailing presented in

Exhibit 13-3. It positions different types of retailers in terms of three consumer-

oriented dimensions: (1) width of assortment desired, (2) depth of assortment

desired, and (3) a price/service combination. Price and service are combined because

they are often indirectly related. Services are costly to provide. So a retailer that

wants to emphasize low prices usually has to cut some services—and retailers with

a lot of service must charge prices that cover the added costs.

We can position most existing retailers within this three-dimensional market dia-

gram. Exhibit 13-3, for example, suggests the whyof vending machines. Some

Retailing Types Are Explained by Consumer Needs Filled

Many established retailers, like

Barnes & Noble, are trying to

figure out how to combine “clicks

and mortar” to meet consumers’

needs better than would be

possible with only an online

website or only a store.

Competitive effects will
influence other retailers