Chapter 17
Retailing and Multi-Channel Marketing
Tools For Instructors
· Brief Chapter Outline
· Learning Objectives
· Chapter Overview (“Summing Up”)
· Extended Chapter Outline with Teaching Tips
· PowerPoint Slides with Teaching Notes
· Answers to End of Chapter Learning Aids
· Chapter Case Study
· Additional Teaching Tips
Brief Chapter Outline
Choosing Retailing Partners
Identify Types of Retailer
Developing a Retail Strategy Using the Four Ps
Benefits of Stores for Consumers
Benefits of the Internet and Multichannel Retailing
Effective Multichannel Retailing
Summing Up
End of Chapter Learning Aids
Chapter Case Study: Target and Its New Generation of Partnerships
Learning Objectives
LO1 Discuss the four factors manufacturers should consider as they develop their strategy for
working with retailers.
LO2 Outline the considerations associated with choosing retail partners.
LO3 List the three levels of distribution intensity.
LO4 Describe the various types of retailers.
LO5 Describe the components of a retail strategy.
LO6 Identify the benefits of stores.
LO7 Identify the benefits of multichannel retailing.
LO8 Detail the challenges of multichannel retailing
Chapter Overview (“Summing Up”)
LO1 Discuss the four factors manufacturers should consider as they develop their strategy for
working with retailers.
When they initiate the decision process for choosing retail partners, manufacturers determine how
likely it is that certain retailers would carry their products and whether target customers expect to find
their products for sale at those retail locations. Next, manufacturers need to identify types of retailers
that would be appropriate locations for their products. After identifying likely and appropriate retailers,
manufacturers work with their retailer partners to develop a strategy that comprises the four Ps. Finally,
manufacturers, again with their retail partners, must determine which elements of an omnichannel
strategy will be effective.
LO2 Outline the considerations associated with choosing retail partners.
Manufacturers often start by noting the basic channel structure, which includes the level of vertical
integration, the relative strength of the retailer and the manufacturer, and the strength of the brand.
They also consider where their target customers expect to find products, which depends largely on the
retailer’s image. Channel member characteristics also are important inputs, as is the level of
distribution intensity.
LO3 List the three levels of distribution intensity.
Intensive distribution intensity means the product is available virtually everywhere, in as many places
as will agree to carry it. In an exclusive distribution intensity strategy, the manufacturer allows only one
retailer (or retail chain) in each area to sell its products. Selective distribution is the middle ground
option; several retailers carry the products, but not all of them.
LO4 Describe the various types of retailers.
Retailers generally fall into one of three categories: food retailers, general merchandise retailers, or
service retailers. Each of the categories consists of various formats, including supermarkets,
supercenters, warehouse clubs, convenience stores, department stores, discount stores, specialty
retailers, drugstores, category specialists, extreme value retailers, and off-price stores. Although service
retailers primarily sell services, if they sell to consumers, they are still retailers. Service retailers span
the gambit from universities to automobile oil change shops.
LO5 Describe the components of a retail strategy.
To develop a coordinated strategy—which represents a key goal for an effective channel partnership
between retailers and manufacturers—both retailers and manufacturers need to consider all of the four
Ps in conjunction: product, place, promotion, and price.
LO6 Identify the benefits of stores.
Because consumers often have just a general idea of what they want to purchase, stores’ main benefits
come from giving shoppers a place to browse. They can touch and feel products, obtain personal
services, pay using cash or credit, engage in an entertaining and social experience, receive instant
gratification, and reduce their sense of risk.
LO7 Identify the benefits of omnichannel retailing.
The various types of retail channels—stores, catalogs, and the Internet—all offer their own benefits and
limitations, including those related to availability, convenience, and safety, among others. If a retailer
adopts an omnichannel ¬strategy, it can exploit the benefits and mitigate the limitations of each channel
and help expand its overall market presence. Furthermore, an omnichannel strategy offers the chance to
gain a greater share of customers’ wallets and more insight into their buying behaviors.
LO8 Detail the challenges of omnichannel retailing.
To function in multiple channels, retailers must organize their operations carefully to ensure an
integrated customer experience. In particular, they have to have an integrated CRM system, and
determine how to maintain a consistent brand image across the various channels, whether to charge the
same or different prices, and how best to deliver
Extended Chapter Outline With Teaching Tips
I. Choosing Retailing Partners (PPT slide
17-4)
A. Channel Structure (PPT slide 17-5)
B. Customer Expectations (PPT slide 17-6)
C. Channel Member Characteristics (PPT slide 17-7)
D. Distribution Intensity (PPT slide 17-8, 9)
1. Intensive Distribution
2. Exclusive Distribution
3. Selective Distribution
Check Yourself: Several questions are offered for students to check their understanding of core
concepts. (PPT slide 17-10)
1. What issues should manufacturers consider when choosing retail partners?
2. What is the difference between intensive, exclusive, and selective levels of distribution
intensity?
Answer: Intensive distribution strategy is designed to get products into as many outlets as possible.
II. Identify Types Of Retailers (PPT slide
17-12)
A. Food Retailers (PPT slide 17-13)
1. Supermarkets
2. Supercenters
3. Warehouse Clubs
4. Convenience Stores
B. General Merchandise Retailers (PPT slide 17-14)
1. Department Stores
2. Full-Line Discount Stores
3. Specialty Stores
4. Drugstores
5. Category Specialists
6. Extreme Value Retailers
7. Off-Price Retailers
C. Service Retailers (PPT slide 17-17)
Check Yourself: Several questions are offered for students to check their understanding of core
concepts. (PPT slide 17-18)
1. What strategies distinguish the different types of food retailers?
Answer: The different types of food retailers include supermarkets, supercenters, warehouse clubs and
convenience stores. Perishables like meat and produce account for 50 percent of supermarket sales and
2. What strategies distinguish the different types of general merchandise retailers?
Answer: Full-line discount stores are retailers that offer a broad variety of merchandise, limited service,
3. Are organizations that provide services to consumers considered to be retailers?
III. Facilitating Retail Strategy Using The Four
Ps
A. Product (PPT slide 17-19)
B. Price (PPT slide 17-20)
C. Promotion (PPT slide 17-21)
D. Place (PPT slide 17-22)
IV. Benefits Of Stores For Consumers (PPT slide
17-24)
A. Browsing
B. Touching and Feeling Products
C. Personal Service
D. Cash and Credit Payment
E. Entertainment and Social Experience
F. Immediate Gratification
G. Risk Reduction
V. Benefits Of The Internet And Multichannel
Retailing (PPT slide 17-25)
A. Deeper and Broader Selection
B. Personalization
C. Gain Insights into Consumer Shopping Behavior
D. Increase Customer Satisfaction and Loyalty
E. Expand Market Presence
VI. Effective Multichannel Retailing (PPT slide
17-29)
A. Integrated CRM
B. Brand Image
C. Pricing
D. Supply Chain
Check Yourself: Several questions are offered for students to check their understanding of core
concepts. (PPT slide 17-30)
1. What are the components of a retail strategy?
Answer: Like other marketers, retailers perform important functions that increase the value of the
2. What are the advantages of traditional stores versus Internet-only stores?
Answer: The relative advantages of the most traditional retail channels are browsing, touching and
3. What challenges do retailers face when marketing their products through multiple channels?
Answer: Consumers desire a seamless experience when interacting with multichannel retailers.