Page 229 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes
Figure 9.6: The Wheel of Retailing

Vulnerability phase Entry phase

Top heaviness
Conservatism Low price
Declining ROI
Low margin
Poor facilities
Becomes Low status
Limited products

Trading-up phase Up-market location
Fashion orientation Becomes
Extended assortment
Higher prices
Elaborate facilities
Exotic services

Task A lady wants to open a small retail store, specialising in high quality, high-
price children clothing. What suggestions do you have regarding her choice
of location and competition factors she should consider?

9.6.1 Functions of Retailers

Retailers are crucial players in the emerging market scenario. Large brands are running first to get
into the desired retail formats to cater to the growing middle class of India. The retailers perform
various functions like providing assortments, sorting, breaking the bulk, rendering services,
bearing risk, channel of communication, transport and advertising and holding inventory. They
significantly contribute towards increasing the product value and satisfying the consumers.
Providing Assortments: Offering an assortment enables customers to choose from a wide selection
of brand design, sizes, colors, and prices in one location. Manufacturers specialize in producing
specific types of products.

Example: Kellogg’s makes breakfast cereals and Campbell makes soups.
If each of these manufacturers had its own stores that only sold its own products, consumers
would have to go to many different stores to buy groceries to prepare a single meal. Retailers
offer assortment of multiple products and brands for consumer convenience.

Sorting: Manufactures make one single line or multiple product lines and will always prefer to
sell their entire output to few buyers to reduce their costs. Final consumers will prefer to buy
from a large variety of goods and services to choose from and usually buy in smaller quantities.
Retailers have to balance between demands of both the sides, by collecting a combination of
goods from different producers, buying them in large quantities and selling them to individual
consumers in smaller quantities. The above process is called sorting and under this process, the

222 LOVELY PROFESSIONAL UNIVERSITY