© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter Fourteen Wholesaling, Retailing, and Physical Distribution 16 | 1

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives 1. Identify the various channels of distribution that are used for consumer and industrial products 2. Explain the concept of market coverage 3. Understand how supply-chain management facilitates partnering among channel members 4. Describe what a vertical marketing system is and identify the types of vertical marketing systems 5. Discuss the need for wholesalers and describe the services they provide to retailers and manufacturers 14 | 2

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives (cont’d) 6. Identify and describe the major types of wholesalers 7. Distinguish among the major types of retailers 8. Identify the categories of shopping centers and the factors that determine how shopping centers are classified 9. Explain the five most important physical distribution activities 14 | 3

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Channels of Distribution  Define Channel of Distribution (Marketing Channel) Middleman (Marketing Intermediary) Merchant Middleman Functional Middleman Retailer Wholesaler Middleman 14 | 4

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Channels for Consumer Products  Be prepared to discuss the Distribution Channels for Consumer Products Producer to Consumer (Direct Channel) Producer to Retailer to Consumer Producer to Wholesaler to Retailer to Consumer Producer to Agent to Wholesaler to Retailer to Consumer  When might a manufacturer use multiple channels?  What are appropriate products for each marketing channel? 14 | 5

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Channels for Business Products  Be prepared to discuss the Distribution Channels for Business Products Producer to Business User Producer to Agent Middleman to Business User 14 | 6

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Level of Market Coverage  Know the three levels of Intensity of Market Coverage Intensive Distribution Selective Distribution Exclusive Distribution  Be able to give an example of a product that would be best suited to each level of intensity 14 | 7

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Partnering Through Supply- Chain Management  Define Supply-Chain Management What is Category Management? How has Technology enhanced the implementation of supply-chain management? 14 | 8

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Vertical Marketing Systems  What is Vertical Channel Integration?  Be prepared to discuss Vertical Marketing System (VMS) in its various forms Administered Contractual Corporate 14 | 9

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing Intermediaries: Wholesalers  Discuss Justifications for Marketing Intermediaries  How does an intermediary improve efficiency?  What services do Wholesalers provide to retailers?  What services do Wholesalers provide to manufacturers? 14 | 10

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Wholesalers  Define the different types of wholesalers Merchant Wholesalers -Full-Service Wholesalers -General Merchandise Wholesaler -Limited-Line Wholesaler -Specialty-Line Wholesaler -Limited-Service Wholesalers Commission Merchant Agent Brokers Manufacturer’s Sales Branch Manufacturer’s Sales Office 14 | 11

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing Intermediaries: Retailers  Define Retailers  Why are retailers important?  Know the different Classes of In-Store Retailers 14 | 12 Independent RetailerSuperstore Chain RetailerSupermarket Department StoreWarehouse Club Discount StoreOff-Price Retailer Catalog ShowroomTraditional Specialty Store Warehouse ShowroomCategory Killer Convenience Store

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Kinds of Nonstore Retailing  Define Nonstore Retailing Direct Selling Direct Marketing Catalog Marketing Direct-Response Marketing Telemarketing Television Home Shopping Online Retailing Automatic Vending 14 | 13

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Planned Shopping Centers  What is a Planned Shopping Center?  Be familiar with the different types of planned shopping centers Lifestyle Shopping Center Neighborhood Shopping Center Community Shopping Center Regional Shopping Center 14 | 14

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Physical Distribution  Define Physical Distribution  Define and be able to discuss Inventory Management Holding Costs Stock-Out Costs Order Processing Warehousing -What are the activities that occur in warehouses? -What are the types of warehouses? Materials Handling 14 | 15

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Transportation  Define Transportation Carrier Common Carriers Contract Carriers Private Carriers Freight Forwarders 14 | 16

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Modes of Transportation  Know the different modes of transportation Railroads Trucks Airplanes Waterways Pipelines  What are the advantages and disadvantages of each?  Think of an example of a product that would be best suited to each type of transportation 14 | 17