Presentation on theme: "Components of the Distribution Channel Wholesalers Retailers"— Presentation transcript:
1 Components of the Distribution Channel Wholesalers Retailers Place (Distribution)Components of the Distribution ChannelWholesalersRetailers
2 Wholesalers- Why Have Them? Services to RetailersPromotionMarket InformationFinancial AidServices to ManufacturersProvide Sales ForceReduce Inventory CostFurnishing Information
3 Wholesalers- Why Have Them? Services to RetailersPromotionHelp promote products by providing display materials.May help build window, counter, and shelf displaysMay work on retail floor during special promotions.
4 Wholesalers- Why Have Them? Services to RetailersMarket InformationGathers information about consumer demand, prices, new developments in the market.
5 Wholesalers- Why Have Them? Services to RetailersFinancial AidMake prompt and frequent deliveries to keep inventory costs low.Provide delayed billing.
6 Wholesalers- Why Have Them? Services to ManufacturersProvide Sales ForceProducers rely on wholesalers to sell and distribute their products to many retailers.
7 Wholesalers- Why Have Them? Services to ManufacturersReduce Inventory CostsBy purchasing goods from producers, they reduce amount of inventory that producers must hold to.
8 Wholesalers- Why Have Them? Services to ManufacturersFurnishing InformationLets producer know information such asConsumer DemandProducer’s CompetitionBuying Trends
9 Retailers Final Link between producers and consumers. Sell goods and services to consumer.Two Types of RetailersIn-Store RetailersNonstore Retailers
10 Retailers – In-Store Classify In-Store by: Number of Stores Owned and Operated by the FirmStore Size and The Kind and Number of Products Carried
11 Retailers – In-Store Number of Stores Owned and Operated by the Firm Independent RetailerFirm operates only one retail outlet.75% of retailers are independent.Usually locally owned, small businesses.
12 Retailers – In-Store Number of Stores Owned and Operated by the Firm Chain RetailerFirm operates more than one retail outlet.25% of retailers are chains.
13 Retailers – In-StoreStore Size and The Kind and Number of Products CarriedDepartment StoreAccording to U.S Census Bureau a department store:Employs 25 or more peopleSells at least home furnishings, appliances, family apparel, household linens, and dry goods; each in a different part of the store
14 Retailers – In-StoreStore Size and The Kind and Number of Products CarriedDiscount StoresSelf-service, general merchandise at lower than usual prices.Examples include: Wal-Mart, Kmart
15 Retailers – In-StoreStore Size and The Kind and Number of Products CarriedWarehouse ShowroomRetail facility in a large building with large on-premises inventories and minimal service.Examples include: Furniture Stores, Car Dealers
16 Retailers – In-StoreStore Size and The Kind and Number of Products CarriedConvenience StoresSmall food store that sells limited variety of products.Open well beyond normal business hours.Examples include: 7-11 and Wikiwiki Mart
17 Retailers – In-StoreStore Size and The Kind and Number of Products CarriedSupermarketsLarge self-service store selling food and household products.Emphasize low prices and one-stop shopping for household needs.Examples: Safeway, Sack n Save
18 Retailers – In-StoreStore Size and The Kind and Number of Products CarriedSuperstoreLike supermarkets but also carries additional product lines like electronics, clothing, garden products, small appliances.Also provides services like film developing, banking, etc.Examples: KTA
19 Retailers – In-StoreStore Size and The Kind and Number of Products CarriedWarehouse ClubsLarge-scale, members onlyDiscount retailingBroad range of itemsFood to Furniture to Hardware to ClothingProvide few servicesExamples: Costco
20 Retailers – In-StoreStore Size and The Kind and Number of Products CarriedTraditional Specialty StoreNarrow Product Mix with deep Product LineSell products like clothing, jewelry, sporting goods, computers, flowers, books, and pet suppliesEmphasize customer service and atmosphereExamples: Radio Shack, Footlocker, Floral Mart
21 Retailers – In-StoreStore Size and The Kind and Number of Products CarriedOff-PriceBuy manufacturer’s seconds, returns, flaws, overstock, off-season goods.Buys for cheap and sell at discount prices.Examples: Ross, Savers
22 Retailers – In-StoreStore Size and The Kind and Number of Products CarriedCategory KillersLarge specialty storeLow prices and enormous number of productsCalled “category killers” because they take business away from smaller-high-cost retail stores.Examples: Home Depot, Office Max, Kay-Bee
23 Retailers – Nonstore Purchase products without visiting a store. Three TypesDirect SellingDirect marketingVending Machines
24 Retailers – Nonstore Direct Selling Face-to-Face presentation at home or workplace.A.k.a “door to door selling”Usually uses “party-plan” methodCustomer acts as host and invites people to view products.Examples: Party-Lite Candles, Tupperware
25 Retailers – Nonstore Direct Marketing Use of computers, telephones, television, and other nonpersonal media to communicate product and company information.5 types
26 Retailers – Nonstore Direct Marketing Catalog Marketing Provide catalog from which customers make selections and place orders by phone or mail.Eastbay, Crutchfield, JCPennyDirect-ResponseRetailer advertises a product and makes it available through mail or telephone orders.Magazine Ads, commercials, infomercials
27 Retailers – Nonstore Direct Marketing Telemarketing Call homes to try and sell products or services.Television Home ShoppingCertain channels display products to viewers.Demonstrate products on t.vHome Shopping Network, QVC
28 Retailers – Nonstore Direct Marketing Online Retailing Present and sell products onlineMore and more popular.Faster responseEasily accessible
29 Retailers – Nonstore Direct Marketing Automatic Vending Use of machines to dispense productsSell items that require little thoughtAlso can dispense service as wellEx atm’sPermits 24-hour serviceDoesn’t require much space