Fifteen

1
Chapter Fifteen
Distributing Products Efficiently and
Competitively Supply Chain Management
2
Channel of Distribution

• Marketing Intermediaries
• Wholesaler
• Retailer
• Brokers
• Role of Intermediaries
• Create Efficiency
• Value vs. Cost

3
The Supply Chain (Figure 15.6)
4
Utility
Form
Possession
Time
Service
Place
Information
OPEN 24 HRS
5
Wholesale Intermediaries

• Merchant Wholesalers
• Rack Jobbers
• Cash-and-Carry
• Drop Shippers
• Business to Business (B2B)

XYZ Warehouse
6
Percent of B2B Commerce from Internet
Excludes Service Industries
Source Forrester Research Inc.
7
Retail Competition

• Price
• Service
• Location
• Selection
• Entertainment

8
Is it Becoming aWal-Mart World?
There are 2,985 stores in the U.S.
Source Wal-Mart Annual Report 2000
9
Retail Store Distribution

• Intensive

• Selective

• Exclusive

10
Identify a Retailer in Your Area

• Specialty Store
• Factory Outlet
• Superstores
• Catalog Showroom

• Supermarket
• Convenience Store
• Discount Store
• Department Store
• Category Killer

11
The Wheel of Retailing
2. Retail Outlet
3. Retail Outlet

• Higher Prices
• Higher Status

• Adds Service
• Raises Prices
• Better Location

Passage of Time
4. New Outlet Enters
1. Retail Outlet Starts

• Low Price
• Limited Service

• Low Price
• Limited Service
• Out-of-way Location

12
Non-Store Distribution

• E-tailing
• Telemarketing
• Vending Machines, Kiosks, Carts
• Internet
• Direct Selling
• Multilevel Marketing
• Direct Marketing

13
E-Business Expectations
Share of company revenues CEOs say come from
e-business Now vs. In 5 years
Source USA Today
14
Has The Internet Changed Your Shopping Habits?
Survey of Americans who have high Internet use
vs. those with low use
high use 15 hours per week
Source USA Today
15
What Online Shoppers Bought Per Month in 2000
In thousands of dollars
Source Forrester Research
16
What does it take to persuade consumers to buy
online?
Survey of 1,944 Web users that had not made an
online purchase
Source CIO Web Business, 10/1/1999
17
Channel Cooperation

• Corporate Distribution
• Contractual Distribution
• Administered Distribution
• Supply Chain Management

18
Contractual Distribution

• Franchise Systems
• Wholesaler-Sponsored Chains
• Retail Cooperatives

19
Distribution/Storage Mode

• Railroad
• Motor Vehicles
• Water
• Pipeline

• Air
• Intermodal
• Storage
• Materials Handling