Professor/lecturer: Frank Quix
40 multiple (worth 80 points) and some open-ended questions (worth 20 points).
resit is 9th of January 2023 at 18:00-20:00
1
, Chapter 1
Description of the industry: Retail Marketing
1. Concept of Retail
Retailing refers to all activities that focus on the direct delivery of goods, services and
information through all available channels to consumers, where the goods and services
are paid out of the net income of consumers.
By direct delivery we mean direct deliveries to the consumer.
Direct sales means that goods and services are sold directly to the consumer without the
intervention of an intermediary (Unilever).
Retail marketing should not be confused with trade marketing where the company
doesn't sell directly to consumers but uses intermediaries to supply its products to
consumers.
An organisation such as Nespresso, part of Nestlé, does both trade and retail marketing
because it delivers to consumers both through intermediaries and directly - through its
own retail channels.
Different story is for those brands that go retail - sometimes on limited time (Magnum
pop-up store in the summertime; M&M’s; Legos; some automotive; Apple).
We only speak of a retail expenditures if this expenditure is paid out of the net income of
the consumer (NI=gross income-taxes deductions and contributions).
Retail spending can be divided into:
● Retail expenditures on services by consumers (financial services, communication
services, travel and entertainment).
● Retail expenditures on goods by consumers (including goods which can be
consumed immediately).
Goods-retail sector has a more clear structure than the service-retail sector because
goods-retailers sell to end-users (private individuals) without any other processes. In the
service-retail sector instead, production and retailing overlap with one another, selling to
business and private customers. However, we see an international movement whereby
goods and services are increasingly intermingled.
Zoom in H&M
2
,Retail trade (or Goods-retailing): is that part of the total economic activity that deals with
the sales of goods and services directly to consumers.
Different forms of retail can be:
● Online retail
● Market trade
● Door to door sales
● House parties
But also new forms such as AmazonGo, vending machines and social commerce.
2. Changing function of retail
Business value chain
Economic activity can be classified according to value
chains. Retail is always at the bottom of the value chain
and is the last link in the process of delivering products
and services to consumers.
The immediate environment of the retail-goods sector
within the value chain comprises customers, or
consumers, on one hand, and suppliers on the other
hand.
Suppliers may be producers of end products that deliver
directly to the retail-goods sector, or they can also be
wholesalers and brokers.
3
, The problem with the use of the value chain to clarify the function of the retail sector is
that the production process is generally product-driven. You can draw a value chain for
the products ‘clothing’ and ‘furniture’, for example. At the bottom of this value chain you
will always find one or more forms of goods-retailers. But the description of retail only as
the last link in the production process doesn’t describe retail in all its complexity and does
not correspond to reality.
The goods-retailing sector is more than just the last link in a production process that
moves the goods from producer to consumer. This description dates back to a time when
the good-retailing sector was equated (equiparato) with “the art of distribution and
re-allocation”. The Industrial Revolution gave rise to mass production and as a result,
production and consumption no longer overlapped. In the traditional retail function:
1. The redistribution in time is about the stock function of retail: bridging the time
between the completion of production and the moment the consumer makes the
purchase.
2.The redistribution by place is about the geographical-distribution function: the sites of
production and consumption are rarely one and the same. The goods must therefore be
delivered to the final consumer.
3. The redistribution by quantity is about resolving the differences between the ‘output
quantity’ at the producer’s and the ‘input quantity’ at the point of purchase by consumer.
For reasons of cost, the producer makes large quantities at once.
Furthermore, the production process was
● product-push and
● based on the seller's market.
4
40 multiple (worth 80 points) and some open-ended questions (worth 20 points).
resit is 9th of January 2023 at 18:00-20:00
1
, Chapter 1
Description of the industry: Retail Marketing
1. Concept of Retail
Retailing refers to all activities that focus on the direct delivery of goods, services and
information through all available channels to consumers, where the goods and services
are paid out of the net income of consumers.
By direct delivery we mean direct deliveries to the consumer.
Direct sales means that goods and services are sold directly to the consumer without the
intervention of an intermediary (Unilever).
Retail marketing should not be confused with trade marketing where the company
doesn't sell directly to consumers but uses intermediaries to supply its products to
consumers.
An organisation such as Nespresso, part of Nestlé, does both trade and retail marketing
because it delivers to consumers both through intermediaries and directly - through its
own retail channels.
Different story is for those brands that go retail - sometimes on limited time (Magnum
pop-up store in the summertime; M&M’s; Legos; some automotive; Apple).
We only speak of a retail expenditures if this expenditure is paid out of the net income of
the consumer (NI=gross income-taxes deductions and contributions).
Retail spending can be divided into:
● Retail expenditures on services by consumers (financial services, communication
services, travel and entertainment).
● Retail expenditures on goods by consumers (including goods which can be
consumed immediately).
Goods-retail sector has a more clear structure than the service-retail sector because
goods-retailers sell to end-users (private individuals) without any other processes. In the
service-retail sector instead, production and retailing overlap with one another, selling to
business and private customers. However, we see an international movement whereby
goods and services are increasingly intermingled.
Zoom in H&M
2
,Retail trade (or Goods-retailing): is that part of the total economic activity that deals with
the sales of goods and services directly to consumers.
Different forms of retail can be:
● Online retail
● Market trade
● Door to door sales
● House parties
But also new forms such as AmazonGo, vending machines and social commerce.
2. Changing function of retail
Business value chain
Economic activity can be classified according to value
chains. Retail is always at the bottom of the value chain
and is the last link in the process of delivering products
and services to consumers.
The immediate environment of the retail-goods sector
within the value chain comprises customers, or
consumers, on one hand, and suppliers on the other
hand.
Suppliers may be producers of end products that deliver
directly to the retail-goods sector, or they can also be
wholesalers and brokers.
3
, The problem with the use of the value chain to clarify the function of the retail sector is
that the production process is generally product-driven. You can draw a value chain for
the products ‘clothing’ and ‘furniture’, for example. At the bottom of this value chain you
will always find one or more forms of goods-retailers. But the description of retail only as
the last link in the production process doesn’t describe retail in all its complexity and does
not correspond to reality.
The goods-retailing sector is more than just the last link in a production process that
moves the goods from producer to consumer. This description dates back to a time when
the good-retailing sector was equated (equiparato) with “the art of distribution and
re-allocation”. The Industrial Revolution gave rise to mass production and as a result,
production and consumption no longer overlapped. In the traditional retail function:
1. The redistribution in time is about the stock function of retail: bridging the time
between the completion of production and the moment the consumer makes the
purchase.
2.The redistribution by place is about the geographical-distribution function: the sites of
production and consumption are rarely one and the same. The goods must therefore be
delivered to the final consumer.
3. The redistribution by quantity is about resolving the differences between the ‘output
quantity’ at the producer’s and the ‘input quantity’ at the point of purchase by consumer.
For reasons of cost, the producer makes large quantities at once.
Furthermore, the production process was
● product-push and
● based on the seller's market.
4
