Chapter
Fourteen
Wholesaling,
Retailing, and
Physical
Distribution
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16 | 1
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
© 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.
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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
© 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.
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Channels of Distribution

Define
• Channel of Distribution (Marketing
Channel)
• Middleman (Marketing Intermediary)
• Merchant Middleman
• Functional Middleman
• Retailer
• Wholesaler Middleman
© 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.
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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?
© 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.
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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
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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
© 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.
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Partnering Through SupplyChain Management

Define Supply-Chain Management
• What is Category Management?
• How has Technology enhanced the
implementation of supply-chain management?
© 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.
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Vertical Marketing Systems

What is Vertical Channel Integration?

Be prepared to discuss Vertical Marketing
System (VMS) in its various forms
• Administered
• Contractual
• Corporate
© 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.
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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?
© 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.
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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
© 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.
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Marketing Intermediaries: Retailers

Define Retailers

Why are retailers important?

Know the different Classes of In-Store
Retailers
Independent Retailer
Superstore
Chain Retailer
Supermarket
Department Store
Warehouse Club
Discount Store
Off-Price Retailer
Catalog Showroom
Traditional Specialty Store
Warehouse Showroom
Category 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.
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Kinds of Nonstore Retailing

Define
• Nonstore Retailing
• Direct Selling
• Direct Marketing
• Catalog Marketing
• Direct-Response Marketing
• Telemarketing
• Television Home Shopping
• Online Retailing
• Automatic Vending
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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
© 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.
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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
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Transportation

Define
• Transportation
• Carrier
• Common Carriers
• Contract Carriers
• Private Carriers
• Freight Forwarders
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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
© 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.
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