Wholesaler Marketing Decisions

Wholesalers have experienced mounting competitive pressures in current years. They have faced new resources of competition, new technologies, more demanding customers, and more direct- purchasing programs on the part big institutional, industrial and retail buyers.  As a consequence, they have must improve their strategic decisions on target markets and positioning and on the marketing mix-product assortments and services, promotion, price and place.

i       Target Market and Positioning Decision

As like retailers, wholesalers has to define their target markets and place themselves effectively- they can't serve everyone. They can select a target group by size of customer (just large retailers), type of customer (only convenience food stores), need for service (customers who require credit), or other factors. Within the target group, they can recognize the more profitable customers, design stronger offers, and build enhanced relationships with them. They may propose automatic reordering systems, settle up management-training and advising systems, or sponsor even a voluntary chain. They may discourage less profitable customers by requiring greater orders or adding up service charges to smaller ones.

ii.         Marketing Mix Decisions

As like retailers, wholesalers have to decide on product assortment and prices, services promotion, and place. The wholesaler's "product" is the assortment of services and products that it offers. Wholesalers are under high pressure to carry a full line and to stock up enough for immediate delivery. But this practice may damage profits. Today wholesalers are cutting down on the number of lines they carry, selecting to carry just the more profitable ones. Wholesalers are also rethinking which services count largely in building strong customer relationships and which should be charged or dropped for. The key is to search the mix of services largely valued by their target customers.

Price is also significant wholesaler decision. Usually wholesalers mark up the cost of goods by a standard percentage-say, 20 %. Expenses can run 17 % of the gross margin, leaving a profit margin of 3 %. In grocery wholesaling, the average profit margin is frequently less than 2 %. Wholesalers are attempting new pricing approaches. They can cut their margin on some lines to win important new customers. They can ask suppliers for special price break when they may turn them into enhance in the supplier's sales.

Although promotion may be critical to wholesaler success, most of the wholesalers are not promotion minded. Their use of trade advertising, personal selling, sales promotion and public relations is mostly unplanned and scattered. Lots of are behind the times in personal selling-they still see selling like a single salesperson talking to a single customer rather than as a team effort to sell, build, and service major accounts. Wholesalers also require adopting some of the non personal promotion techniques utilized by retailers. They require to develop total promotion strategy and to make greater use of supplier promotion resources and programs.

At last, place is important-wholesalers must select their locations and facilities carefully. Wholesalers usually locate in low-tax areas, low-rent and tend to invest little money in their, equipment, buildings, and systems. As outcome, their materials-handling and order-processing systems are frequently outdated. In modern years, however, big and progressive wholesalers are reacting to increasing costs by investing in automated warehouses and online ordering systems. Orders are directly fed from the retailer's system into the wholesaler's computer, and the items are selected up by mechanical devices and automatically taken to a shipping platform where they are assembled. Most huge wholesalers use computers to carry out billing, accounting, forecasting and inventory control. Current wholesalers are adapting their services to the needs of target customers and searching cost- reducing methods of doing business.