1. Business Copyright 2005 Prentice- Hall, Inc. 12-1

2. 12-2 Chapter 12 Distributing Products

3. Business Copyright 2005 Prentice- Hall, Inc. 12-3 Chapter Outline The Distribution Mix The Distribution Mix Wholesaling Wholesaling Retailing Retailing Physical Distribution Physical Distribution

4. Business Copyright 2005 Prentice- Hall, Inc. 12-4 Intermediaries Wholesaler- Sells Products To Retailers For Re-SaleWholesaler- Sells Products To Retailers For Re-Sale Retailer- Sells Products Directly To ConsumerRetailer- Sells Products Directly To Consumer

5. Business Copyright 2005 Prentice- Hall, Inc. 12-5 Channels Distribution- Network Through Which Product Passes On Its Way To The End UserDistribution- Network Through Which Product Passes On Its Way To The End User DirectDirect

6. Business Copyright 2005 Prentice- Hall, Inc. 12-6 Channels Of Distribution

7. Business Copyright 2005 Prentice- Hall, Inc. 12-7 Direct Distribution No IntermediariesNo Intermediaries Producer Uses Own Sales ForceProducer Uses Own Sales Force Used By Many Internet CompaniesUsed By Many Internet Companies

8. Business Copyright 2005 Prentice- Hall, Inc. 12-8 Retail Distribution Producer Sells To RetailerProducer Sells To Retailer Growing Area In Internet SalesGrowing Area In Internet Sales

9. Business Copyright 2005 Prentice- Hall, Inc. 12-9 Wholesale To Consumer Once Most Prevalent Nondirect MethodOnce Most Prevalent Nondirect Method Requires Large Amount Of Floor SpaceRequires Large Amount Of Floor Space Space Is Too ExpensiveSpace Is Too Expensive

10. Business Copyright 2005 Prentice- Hall, Inc. 12-10 Sales Agents/Brokers Agents/Brokers Represent ProducerAgents/Brokers Represent Producer Agents/Brokers Paid On CommissionAgents/Brokers Paid On Commission Agents May Represent Several Similar Producers/Product LinesAgents May Represent Several Similar Producers/Product Lines

11. Business Copyright 2005 Prentice- Hall, Inc. 12-11 Nondirect Distribution Pros Intermediaries Provide Added ValueIntermediaries Provide Added Value Value Grows With Each LinkValue Grows With Each Link Cons Markup At Each Link In Chain Higher Consumer Prices

12. Business Copyright 2005 Prentice- Hall, Inc. 12-12 Value-Adding

13. Business Copyright 2005 Prentice- Hall, Inc. 12-13 Agent Distribution Agent Is Sole IntermediaryAgent Is Sole Intermediary Agent Distributes To Consumer & BusinessAgent Distributes To Consumer & Business

14. Business Copyright 2005 Prentice- Hall, Inc. 12-14 Industrial Distribution Usually Direct From Producer To Industrial BuyerUsually Direct From Producer To Industrial Buyer Goods Usually Purchased In Large QuantitiesGoods Usually Purchased In Large Quantities

15. Business Copyright 2005 Prentice- Hall, Inc. 12-15 Wholesale Distribution Of Industrial Products Used Mostly For Accessory EquipmentUsed Mostly For Accessory Equipment Intermediaries Breakdown Large Quantities To Manageable SizeIntermediaries Breakdown Large Quantities To Manageable Size

16. Business Copyright 2005 Prentice- Hall, Inc. 12-16 Wholesale Distribution To Business Retailers Intermediaries Similar To Traditional WholesalersIntermediaries Similar To Traditional Wholesalers Consumers Use Discount Stores That Buy In Volume And Sell In Small Quantities With Small MarkupConsumers Use Discount Stores That Buy In Volume And Sell In Small Quantities With Small Markup

17. Business Copyright 2005 Prentice- Hall, Inc. 12-17 Distribution Strategies Intensive Selective Exclusive

18. Business Copyright 2005 Prentice- Hall, Inc. 12-18 Channels Conflict- Channel Members Disagree About Roles/RewardsConflict- Channel Members Disagree About Roles/Rewards Leadership/Captain- Most Powerful Member of Distribution ChannelLeadership/Captain- Most Powerful Member of Distribution Channel

19. Business Copyright 2005 Prentice- Hall, Inc. 12-19 Merchant Wholesalers Full-ServiceFull-Service Limited-FunctionLimited-Function Drop ShippersDrop Shippers Rack JobbersRack Jobbers

20. Business Copyright 2005 Prentice- Hall, Inc. 12-20 Agents/Brokers Independent RepresentativesIndependent Representatives Work On CommissionWork On Commission Do Not Take Ownership Or PossessionDo Not Take Ownership Or Possession Have Extensive Knowledge Of MarketHave Extensive Knowledge Of Market

21. Business Copyright 2005 Prentice- Hall, Inc. 12-21 E-Intermediary FunctionsFunctions –Collect Information About Sellers For Consumers –Deliver Internet Products To Buyers Syndicated SellersSyndicated Sellers Shopping AgentsShopping Agents Business-to-Business BrokersBusiness-to-Business Brokers

22. Business Copyright 2005 Prentice- Hall, Inc. 12-22 Product Line Retailers Department StoresDepartment Stores SupermarketsSupermarkets Specialty StoresSpecialty Stores

23. Business Copyright 2005 Prentice- Hall, Inc. 12-23 Bargain Retailers Discount HousesDiscount Houses Catalog ShowroomsCatalog Showrooms Factory OutletsFactory Outlets Warehouse/Wholesale ClubWarehouse/Wholesale Club Convenience StoresConvenience Stores

24. Business Copyright 2005 Prentice- Hall, Inc. 12-24 Nonstore/Electronic Retailing Direct-Response RetailingDirect-Response Retailing Mail Order- CatalogMail Order- Catalog TelemarketingTelemarketing Direct Selling- Door To DoorDirect Selling- Door To Door Multilevel MarketingMultilevel Marketing

25. Business Copyright 2005 Prentice- Hall, Inc. 12-25 Small Business & The Web

26. Business Copyright 2005 Prentice- Hall, Inc. 12-26 Electronic Retailing E-CatalogsE-Catalogs Electronic StorefrontElectronic Storefront CybermallsCybermalls Interactive MarketingInteractive Marketing Video MarketingVideo Marketing

27. Business Copyright 2005 Prentice- Hall, Inc. 12-27 Types Of Warehouses Private- Owned By Single Manufacturer, Wholesaler, RetailerPrivate- Owned By Single Manufacturer, Wholesaler, Retailer Public- Independently Owned & OperatedPublic- Independently Owned & Operated Storage- Used For Extended PeriodsStorage- Used For Extended Periods Distribution CentersDistribution Centers

28. Business Copyright 2005 Prentice- Hall, Inc. 12-28 Warehousing Costs Inventory ControlInventory Control Materials HandlingMaterials Handling

29. Business Copyright 2005 Prentice- Hall, Inc. 12-29 Factors In Selecting Transportation Mode CostCost Nature Of ProductNature Of Product DistanceDistance SpeedSpeed Customer Wants/NeedsCustomer Wants/Needs

30. Business Copyright 2005 Prentice- Hall, Inc. 12-30 Transportation Modes TrucksTrucks RailroadsRailroads PlanesPlanes WaterWater PipelinesPipelines

31. Business Copyright 2005 Prentice- Hall, Inc. 12-31 Transportation Modes Changes Intermodal- BirdybackIntermodal- Birdyback ContainerizationContainerization Distribution & E-Customer Satisfaction- Order FulfillmentDistribution & E-Customer Satisfaction- Order Fulfillment

32. Business Copyright 2005 Prentice- Hall, Inc. 12-32 Transportation- Hubs Supply-SideSupply-Side PrestagingPrestaging DistributionDistribution