1. The American Economy Goods and Services ~~~~~ Distributing Goods
Chapter Eighteen
The American Economy
Goods and Services
~~~~~
Distributing Goods

3. Distribution production distribution
businesses and industries produce goods and services that supply people's needs
after goods are made, they must be delivered to the people who want them
distribution
the process of moving goods from manufacturers to markets
two sides
transportation
moves goods
marketing
convinces people to buy goods
has always been important in such a vast land as the U.S.
early in its history a good system of transportation was necessary to unify the young country
experienced a long period of road, canal, and railroad building
development made it possible for American businesses to sell their goods throughout the country

4. Railroads chief method of transportation for nearly a century
greatly helped American industry
helped create a single, large market for products
long freight trains rolled from coast to coast carrying raw materials and finished products
brought new goods to every U.S. city, to most towns, and within reach of many farms
gave businesspeople a means of rapid travel and communication
mid-1900s
found it difficult to compete with trucks, buses, cars, and airplanes
1960s s
many railroads went out of business
Congress created Amtrak
main provider of long-distance passenger trains
today
many tracks and trains in the railroad system are in poor condition
U.S. trains not as fast as more modern trains in some countries
still important to carry bulk cargo - coal and grain

5. Air Transportation first flight in 1903 1910s - 1940s today problems
Wright brothers
1910s s
primarily used for military purposes, mail transport, crop dusting
today
change from propeller to jet engines
have grown rapidly in passenger transportation
modern research, equipment, and management methods have made airlines in the U.S. among the best in the world
carries all first-class mail between U.S. cities located over a certain distance apart
important in quickly transporting freight long distances
small packages, large industrial machinery, automobiles
problems
small load capacity
large airports necessary
expensive aviation fuel
increased security issues

6. The Highway System automobile trucks roads problems
leading means of transportation in the U.S.
carry about 85 percent of passengers
more than all other kinds of transportation combined
trucks
leading means to transport goods
roads
U.S. maintains a vast highway system
now has more than 4 million miles of roads
interstate highway system reaches every part of the country
toll roads
highways where drivers must pay a fee to use the roads
freeways
multi-lane roads used free of charge
buses, cars, and trucks travel the highways at all hours
problems
traffic jams, accidents, air pollution, heavy use of fuels and oil
high fuel costs = higher prices

7. Water Transport waterways advantages problems
rivers, canals, lakes, oceans
boats, barges, ferries, container ships
moves smaller amounts than other methods
advantages
easy access for manufacturers and consumers located nearby
problems
weather issues
drought, floods, ice, storms and hurricanes 7

8. Delivering Services
many different types of businesses in the service sector
tourism, restaurants, retail, entertainment, personal care
news media, leisure industry, education, health care, consulting, investment, legal advice
service delivery
in person
retail stores
telephone
Internet

9. Mass Marketing selling goods in large quantities one-price system
modern supermarkets and large department stores use this kind of large-scale selling
one-price system
prices are stamped or bar-coded onto products
standard practice almost everywhere
self-service shopping
efficient and inexpensive way to sell goods
saves time and labor
customers select items themselves
clerk scans the purchases at a cash register
some stores offer self-service checkout
standard packaging
goods come from factories already wrapped, packaged, weighed, measured, etc.
bargaining
for large items such as houses, boats, and automobiles
bar-coding
used to collect information about products
keeps track of how many items are being sold and the stock on hand

10. Wholesalers and Retailers
products may pass through several hands from the factory to the customer
wholesaler
also called distributors
buys large quantities of goods from a factory
owns a large warehouse where goods are stored
sells the goods to retail stores
perform the service of linking the factory and the retailer
retailers
sells the goods directly to the public
customers must pay for this transfer of goods
prices increase with every step
chain stores, large department stores, and supermarkets often have their own warehouses and have no need for distributors
they can sometimes offer goods at lower prices
distribution and marketing of goods costs a great deal of money
efficiency in mass distribution reduces the prices of the items you buy

11. Shopping Malls shopping center chain stores specialty shops
large complexes featuring different types of stores,
surrounded by parking areas or access to public transportation
anchor stores are usually a large supermarket or department store
there are often dozens of other stores and shops
highly efficient marketing
customers can drive in, park their cars, and buy almost everything they need
many stores can afford to sell goods at lower prices because malls draw more customers
chain stores
owned and operated by a company that has many of the same kind of store
may purchase its goods directly from a factory or farm, or it may have its own production centers
can offer its products at lower cost because it buys or produces those goods in large quantities
specialty shops
sell only certain kinds of goods or offer a particular kind of service
women's or men's clothing, books, toys and games, coffee shops
internet sellers
shop online for goods and services

12. Advertising brand names makes mass marketing possible
informs people about products and tries to
persuade them to buy these products
cons
some forms of advertising do not accurately represent products
encourages people to buy products that they do not need
shoppers are sometimes confused when several producers claim that their product is best or most effective
pros
competition among mass producers, marketers, and advertisers helps keep the quality of products high and prices low
national advertising makes it possible for producers to sell their products throughout the country
useful way for a producer to inform shoppers about a new product
brand names
a product that is widely advertised and distributed
people often buy brand-name products they have heard
about most favorably or most often