Page 230 - DMGT408DMGT203_Marketing Management

Unit 9: Managing Marketing Channels

retailer undertakes activities and performs functions that add value to the products and services Notes
while selling them to consumers.

Example: A shopping super market of Future Group in the name of ‘Big Bazaar’ sells
20,000 assortments from 900 companies. Customers can choose from such a basket in just one
location. There are specialized retailers like Nilgiris or Barista, which offers specialized
assortments of a single product line.
Breaking Bulk: Retailers offer the products in smaller quantities tailored to individual consumers
and household consumption patterns. This reduces transportation costs, warehouse costs and
inventory cost. This is called breaking bulk. The word ‘retailing’ is drawn from French, which
means ‘cutting a piece off’, which shows the true function of a retailer.

Example: A retailer will sell wheat flour in packs of 2kg, 5kg and 10kg to suit the needs
of different customers.
Rendering Services: Retailers render services that make it easier for customers to buy and use
products. They provide credit facilities to the customers. They display products, which attract
the customers. Retailers keep ready information on hand to answer queries of the customers.
They provide services by which the ownership can be transferred from manufacturer to the end
consumers with convenience. They also provide product guarantee from owner’s side, after
sales service and dealing with consumer complaints. Retailers also offer credit to consumers and
develop hire purchase facilities to enable them to buy a product immediately and pay the price
at their ease. Retailers also fill orders, promptly process, deliver and install the product at
customer point.

Example: Electronics goods retailers deliver the products to customer’s doorsteps and
often, assist in installation, and educate the customers about the functions and features of the
product.

Retail sales people answer the customer complaints and demonstrate the product for the customer
to evaluate before making a choice. They also help in completing a transaction and realizing a
sale.
Risk Bearing: The retailers bear a different kind of risk to the manufacturers and wholesalers.
Even the customers can come back to the retail point and return the product. In that case, the risk
of product ownership many times rests with the retailers. Many companies have buy back
schemes and return schemes whereby the retailers can always return the unsold items.

Holding Inventory: A major function of retailers is to keep inventory so that products will be
available for consumers. Thus, consumers can keep a much smaller inventory of products at
home because they can easily access from the nearby retailers. Retailer’s inventory allows
customers instant availability of the products and services.

Channel of Communication: Retailers are the bridge between the manufacturer or his
representative and the end customers. They serve as a two-way channel of communication. The
manufacturer collects customer choice and preference data and provides information about
existing and new products through the retailers. The point-of-purchase displays provide
information about new products and many times the retailers inform the consumers about
likely date of availability of a product or entry of variants into the market. The shoppers get a
chance to learn about products and services from the stores and even acquire trial habits by
seeing others buying a product or service in the store. The manufacturer collects customer data,
data on gaps in demand and supply cycles and customer satisfaction from retail points.

LOVELY PROFESSIONAL UNIVERSITY 223