Factors like retail buyers, demanding customers, institutional buyers, large scale buyers, and technology have put great pressure on wholesalers. The wholesale industry has become very competitive because of these factors. Consequently, wholesalers are looking for ways to develop their marketing strategies to improve their marketing mix, positioning, and target marketing decisions better.
Today, we’ll discuss wholesale marketing decisions that how they should develop their marketing strategy.
Target Market and Positioning Decision
Wholesalers can’t afford to amass everything in their inventory and serve every segment of the market. That’s why they must have to define their target market so that they could do make their effective positioning. The customers of wholesalers could be of different types like convenience food/grocery stores, large size retailers, credit customers based on needs, and others. Now, they have to choose one segment and focus on it.
After choosing one segment of your target customers, now there are subcategories of customers within the target segment. You, as a wholesaler, should choose the most profitable customers and design the best offer accordingly. Your focus should be on establishing a better long term relationship with them.
Wholesalers can offer different types of services to their customers like; voluntary or sponsor chain system, automatically reorder placement system, advisory system, and management training programs. They could make a big order necessary and offer no discount to small orders to avoid small and less profitable customers.
Market Mix Decisions
Wholesalers must carefully choose and decide the right product assortment, price, place, and promotional mix for the marketing decision. We’ll discuss each part of the marketing mix in detail one by one, they’re as follows;
Product and Service Assortment
The product and service assortment means that the mix of product and service wholesalers would offer to their customers. It may seem easy but it puts great pressure on wholesalers to carry and maintain enough stock for the delivery to complete the order. Inventory and stock management costs have a strong impact on profit.
It’s because of these consistent costs; wholesalers nowadays are changing their focus into the most profitable line of products and carrying their respective inventory. They are also the thing about additional service mix. What types of services they should use to establish a relationship with customers. What types of services they should offer them free of charge. The important to remember here is that the wholesalers should use such marketing that has value to the customers.
Setting the right price is also a very important decision for wholesalers. They usually charge a certain percentage like 20% on the actual cost of the goods. For instance, different expenses levied on the product are 17%, the remaining 3% would be the actual profit of the wholesalers.
The percentage of profit varies from business to business. For instance, the wholesale profit margin on the routine grocery items is usually less than 2%. That’s why wholesalers are looking for new techniques of pricing. Like they can reduce the profit margin in some product lines and increase it in the other categories to balance it. They can also make a deal with a supplier of a special discount so that you can give him more sales in return.
The selection of a place for wholesale inventory and stock is also very important. They usually prefer offsite buildings with low taxes and low rental prices. The purpose is to save money from the additional expense of inventory, rent, building, and equipment. That’s why their order processing system and material handling methods are obsolete and outdated.
On the other hand, modern wholesalers are adopting the latest technology like online order processing system and automated wholesale management system. For instance, retailers can directly place their order online to the wholesalers’ system. Their system would send the order to the inventory unit; the mechanical robots would fill the order, and send it to the assembly unit for delivery.
The system of wholesale works automatically. Many wholesalers use the computer and other applications for billing, accounting, inventory management, and financial forecasting of the business. The reason progressive wholesalers are using such methods is to reduce the cost and better meet the needs of customers.
Wholesalers usually don’t have a promotional and marketing mindset. But it plays a very important role in the success of the wholesale business. They can use various promotional activities like personal selling, public relations, sales promotion, and advertising. Many wholesalers think selling is one person’s job instead of teamwork. One person can do all the tech work, count, sell items, and build relationships with customers.
Now it’s time that wholesalers should get out of the old ideology and adopt the latest promotional techniques like advertisements on different media channels like retailers. Therefore, they should work on their promotional strategy to promote their products to establish a better relationship with suppliers.