Wholesaling and Retailing Chapter 15

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Wholesaling and RetailingChapter 15

• Functions of Physical Distribution
• Wholesalers
• Retailers

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Physical Distribution Process

• physical flow of goods
• importance
• many tasks may be performed

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Physical Distribution Functions

• order processing
• warehousing
• inventory management and control
• transportation
• materials handling
• information systems

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Wholesaler Functions
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Wholesaling Functions

• Services to manufacturers
• sales force
• inventory maintenance
• arrange transportation of goods
• provide market information
• grant credit to customers
• (and thus take associated risk)
• assume risk for product by taking title

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Wholesaling Functions

• Services to customers
• making goods available
• maintain inventory
• (thus reducing customers costs)
• arrange transportation of goods
• provide market information
• provide financing
• order goods

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Types of Wholesalers

• full-function wholesalers
• limited-function wholesalers
• agents/brokers

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Types of Wholesalers
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Types of Retailers

• Retailers can be classified by
• size of establishment
• merchandise lines carried
• level of service offered
• method of operation
• form of ownership
• location of facilities

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Retail Classifications Three Examples
Classification Dimension
JCPenny
Timberland (Footwear)
Home Shopping Network
Size of store Merchandise lines Level of service
Method of operation Form of ownership Location
of store
Large General merchandise Self-selection Store
and mail-order Corporate chain Secondary shoppin
g district - in a regional shopping center

Small Limited line Limited to full service Stor
e Corporate chain Main business thoroughfare
- in a
neighborhood shopping center
Nonstore General merchandise self-selection Pho
ne mail-order
Independent Television-based
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Retail Product Strategies

• General Merchandise Retailing
• carry a wide product mix
• differentiated by the variety of products they
  offer
  
• Limited-Line Retailing
• offer fewer types of products than are sold by
  general merchandise retailers
  
• stock many more choices in each product line
• Scrambled Merchandising
• a strategy in which a retailer carries product
  lines that are not related to its main product
  focus

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Service Continuum
High
C O S T S
Low
self-service self-selection limited
service full service
Level of Service
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Nonstore Retailing

• Catalogs
• Vending machines
• Interactive kiosks
• Television home shopping
• Interactive television
• Computer-based retailing on the Internet

Coca-Cola is a registered trademark.
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Retail Management Decisions

• target market selection
• merchandise mix decisions
• pricing
• store image/ambience