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1-2 McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 15 Wholesaling and Logistics Management

1-3 Understand wholesaling and describe the three basic categories of wholesalers. Identify and discuss the roles of different types of full-service and limited-function wholesalers. Explain differences among the functions of agents, brokers, and commission merchants. Understand the differences between manufacturers’ sales branches and offices. After studying this chapter you should be able to:

1-4 Appreciate how slow growth rates and globalization will affect wholesaling in the future. Define logistics management and explain its key role in marketing. Understand logistics activities. Discuss how some of the key ethical and legal issues affect logistics. After studying this chapter you should be able to:

1-5 Wholesaling and Logistics Management Wholesalers: Intermediaries in the marketing channel that sell to customers other than individual or house hold consumers. Logistics Management: The planning, implementing, and movement of goods, services, and related information from point of origin to point of consumption. Wholesalers: Intermediaries in the marketing channel that sell to customers other than individual or house hold consumers. Logistics Management: The planning, implementing, and movement of goods, services, and related information from point of origin to point of consumption.

1-6 Wholesaling Wholesaling: All marketing activities associated with selling products to purchasers that resell the products, use them to make another product, or use them to conduct business activities. Value-Added Resellers (VARS): Sell to small and medium-sized business customers.

1-7 Types of Wholesalers

1-8 Merchant Wholesalers Are also called “Distributors” and can be: Full-service wholesalers Limited-function wholesalers More then 375,000 merchant wholesalers are based in the U.S.!

1-9 Full-Service Wholesalers TYPES: General Merchandise Wholesalers Limited-line Wholesalers Specialty-line Wholesalers Rack Jobbers

1-10 Limited-Function Wholesalers TYPES: Truck Jobbers Drop Shippers Cash-and-Carry Wholesalers Catalog Wholesalers Wholesale Clubs

1-11 Agents, Brokers, and Commission Merchants Agents: Manufacturers’ agents, also called “manufacturers’ representatives” or “reps” Auction Houses Import Agents Export Agents Almost 48,000 agent, broker, and commission merchant organizations operate at the wholesale level!

1-12 Agents, Brokers, and Commission Merchants Brokers Commission Merchants Manufacturers’ Sales Branches and Offices

1-13 Development in Wholesaling Slow Growth Building Relationships Globalization

1-14 Logistics Management Logistics Management: Managing the movement of goods, services, and related information from point of origin to point of consumption.

1-15 Importance of Logistics to Marketing Customer Expectations of Suppliers’ Logistics Systems: Timely pickups for outgoing orders. On-time delivery. Prompt claim settlement for lost or damaged goods. Accurate invoicing. Interactive Website for tracking & customer service. Well-trained drivers and customer support staff. Process for analyzing and correcting service failures. Centralized, accessible customer service. Good communication with customers. Responsiveness form all supplier departments.

1-16 Key Activities in Logistics Warehousing: Private Warehouses Public Warehouses Distribution Centers Materials Handling: Bar Coding RFID Inventory Control: JIT QR SCM EDI Warehousing: Private Warehouses Public Warehouses Distribution Centers Materials Handling: Bar Coding RFID Inventory Control: JIT QR SCM EDI

1-17 Order Processing The objective is to ensure that customers: Get what they order When they want it Are properly billed Have appropriate support for product use or instillation

1-18 Transporting Railroads carry approximately 40 percent of all U.S. freight. Trucks can deliver almost anywhere, particularly important for customers that lack a rail siding. Air Freight is tops in speed but highest in transportation cost. Railroads carry approximately 40 percent of all U.S. freight. Trucks can deliver almost anywhere, particularly important for customers that lack a rail siding. Air Freight is tops in speed but highest in transportation cost.

1-19 Transporting Pipelines transport chemicals, gases, liquefied fossil fuels, and petroleum products. Water is a good, low-cost alternative for large quantities of bulky products that must be shipped long distances. Intermodal involves the use of two or more modes of transportation.

1-20 Ethical and Legal Issues in Logistics Deregulation Ethical Issues Safety Issues Shippers have a responsibility to protect their employees and the general public from unsafe practices and materials!