DISTRIBUTION CHANNEL (passing products to end-users)
INTERMEDIARIES (MIDDLEMEN) 1. producer > wholesaler > retailer > consumer (e.g. clothing and meat) 2. producer > wholesaler > consumer (e.g. carpets and building material) 3. producer > retailer > consumer (e.g. bread and furniture) 4. producer > consumer (e.g. vegetables and fish, mail order, machinery)
WHOLESALE Wholesalers buy IN BULK (large quantities) Services provided by wholesalers: 1.repack goods in small amounts 2.provide storage for the goods 3.display a large variety of goods
4. arrange transport of goods to retailers 5. give credit to retailers 6. inform manufacturers about demand 7. inform retailers of new trends in products
Leaving out the wholesaler is the risk-bearing Retailer has costs: Costs of storage Cost of transport Employing office staff (The price of goods must be cheaper)
CASH-AND-CARRY WHOLESALERS Important to small retailers (pre-pack food products and household items) Goods are packed in bulk The retailer uses a large trolley or skips on wheels to move chosen goods to the checkout The till works out the VAT due on the goods, lists each item by name
WHOLESALE MARKETS Open early in the morning (Zelena tržnica) Sell items which perish quickly (fruit and vegetables, meat and fish)
RETAIL TRADE provision of goods and services to the customer Retailers buy goods directly from the manufacturer /wholesaler Make their income from the margin
TYPES OF RETAILERS (retail outlets – places where customers can purchase goods) 1.Shopping malls – large groups of shops, restaurants, cinemas, etc. built together under one roof and closed to traffic (King Cross, Avenue Mall, Emezeta, Mercator)
2. Hypermarkets - very large shops outside a town, with a wide range of goods, self-service, parking spaces (Konzum, Metro, Getro) 3. Supermarkets – large shops, smaller than hypermarkets (Konzum, Diona, Kerum)
4. Department stores – large shops with several floors, divided into different departments, each selling a different type of goods, in city centres, can have bank counters, hairdressers, restaurants etc. (NaMa, Müller) 5. Multiple (chain stores) – shops owned by the same company, the same design (Benetton, Konzum, McDonalds)
6. Discount stores – sell goods at prices that are much lower than normal, durables, do-it-yourself products (industrial estates) 7. Vending machines – putting coins into slots for hot and cold drinks, food, toys
8. Market stalls – the oldest type, table or small open-fronted shop in a public place 9. Mobile shops – not fixed in one place, can be moved easily and quickly, for small and mid-week purchases
10. Convenience store small store, selling food or household goods, open until late at night 11. Independent retailers selling different kinds of goods, boutiques 12. Mail order selling through the post/Internet (catalogues, brochures)
Recent trends in retailing – the growth of large retailers 1. economies of scale in retailing – bulk buying, advertising, modern purpose-built equipment, centralised buying 2. lower labour costs – self-service 3. plenty of parking space - increased car ownership 4. cut out the middleman / buy direct from the producer 5. growth of “shopping without shops”
Study the following picture and write down what makes the: 1.FACTORY PRICE _______________________________________________________________ ___________________________________________________________ ___________________________________________________________ __________ 2.IMPORTER PRICE _______________________________________________________________ ___________________________________________________________ ___________________________________________________________ __________ 3.RETAIL PRICE _______________________________________________________________ ___________________________________________________________ ___________________________________________________________ __________
Translate the following words: raw material cost _________________________________________ packaging/freight _________________________________________ direct labor ______________________________________________ royalty __________________________________________________ duty ____________________________________________________ markdown _______________________________________________ licensor _________________________________________________ royalty fee _______________________________________________ What is the factory profit? ___________________________________ What is the importer/wholesaler profit? _________________________ What is the retailer profit? ___________________________________
A TRIP TO THE SUPERMARKET Use the following words to fill in the gaps: cash, impulse, bar codes, credit card, receipt, shopping cart, bill, items, checkout, racks, When we go shopping to supermarkets we set off round the store with a ________or just take a shopping basket. When we finish buying things we must go to the ___________ where the assistant runs her/his scanner over the __________ on our products. She adds up our ______ and asks us how we would like to pay. We can pay ______, by debit card or by ___________. Sometimes we take more staff than we want to and we have to cut our bill by returning the items we do not need that much. Stores often put _______of chocolates by the checkout to attract the impulse buyer. We should learn to go shopping with a list of ___________ we really need, otherwise we buy on ________, which means things we really do not need at that moment, and spend much more money than we planned. After paying we should take the ____________ with us.
A TRIP TO THE SUPERMARKET. When we go shopping to supermarkets we set off round the store with a shopping cart or just take a shopping basket. When we finish buying things we must go to the checkout where the assistant runs her/his scanner over the bar codes on our products. She adds up our bill and asks us how we would like to pay. We can pay cash, by debit card or by credit card. Sometimes we take more staff than we want to and we have to cut our bill by returning the items we do not need that much. Stores often put racks of chocolates by the checkout to attract the impulse buyer. We should learn to go shopping with a list of items we really need, otherwise we buy on impulse, which means things we really do not need at that moment, and spend much more than we planned. After paying we should take the receipt with us.
Match a package with a product: 1.a carton ofa) soap/chocolate 2.a bag of b) margarine/butter 3.a packet ofc) coke/beer/beans 4.a can ofd) crisps/peanuts 5.a tin of e) jam/marmalade 6.a box off) milk/cream 7.a jar ofg) cigarettes/biscuits 8.a tub ofh) chocolates/matches 9.a bar ofi) fish/beans 1.__, 2. __, 3. __ 4.__, 5. __, 6. __, 7. __, 8. __, 9. __,
1. f, 2. d, 3. g 4.c, 5. i, 6. h, 7. e, 8. b, 9. a, http://www.youtube.com/watch?v=lZIpkoC9olY&feature=related How to Become a Wholesale and Retail Buyer 1. How do wholesalers and retailers differ from other shoppers? 2. Why do wholesale and retail buyers purchase products and commodities? 3. What are their goals? 4. When do buyers do their job well? 5. When do buyers fail? 6. What is the most challenging part of the job? 7. How can they be successful? 8. What do they do before authorizing payment? 9. What are prerequisites for staying ahead of trends? 10. What does this career require from buyers?
http://www.youtube.com/watch?v=4Zj7txoDxbE&feature=related RFID 1.What is RFID? 2.What are the benefits for the distribution channel? _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ http://www.youtube.com/watch?v=yNPDgudPmXE&feature=related 1.What are the drawbacks of RFID? _______________________________________________________________________________ _______________________________________________________________________________