chapter 15 the future of business gitman & mcdaniel 5 th edition the future of business gitman...
TRANSCRIPT
Ch
apte
r 15
THE FUTURE OF BUSINESSGitman & McDaniel
5th Edition
THE FUTURE OF BUSINESSGitman & McDaniel
5th Edition
Chapter
Distributing Products in aTimely and Efficient MannerDistributing Products in a
Timely and Efficient Manner
Prepared byDeborah Baker
Texas Christian University
Prepared byDeborah Baker
Texas Christian University
15
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 2Ch
apte
r 15
1 What is physical distribution?
2 What are distribution channels and their functions?
3 How are channels organized?
4 When would a marketer use exclusive, selective, or intensive distribution?
5 What is wholesaling, and what are the types of wholesalers?
6 What are the different kinds of retail operations and the components of a successful retailing strategy?
7 How can supply chain management increase efficiency and customer satisfaction?
8 What are the trends in distribution?
Learning Goals
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 3Ch
apte
r 15
Learning Goal 1
What is physical distribution?
1
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 4Ch
apte
r 15
Physical Distribution1
Management of the acquisition of raw materials to the factory
Management of the movement of products from the producer to industrial users and consumers
The RoleThe Roleofof
DistributioDistributionn
The RoleThe Roleofof
DistributioDistributionn
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 5Ch
apte
r 15
Supply Chain1
Suppliers ofRaw Materials
Suppliers ofRaw Materials
CD Factory
CD Factory
Wholesaleor
DistributionCenter
Wholesaleor
DistributionCenter
Retailers,Wholesalers,Distribution
Centers
Retailers,Wholesalers,Distribution
Centers
CustomersCustomers
Finished CDs
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 6Ch
apte
r 15
2 Learning Goal 2
What are distribution channelsand their functions?
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 7Ch
apte
r 15
2 Distribution Channels
IndustrialDistributorsIndustrial
Distributors
Independent wholesalers that buy related product lines from
manufacturers and sell them to industrial users.
Independent wholesalers that buy related product lines from
manufacturers and sell them to industrial users.
WholesalersWholesalersFirms that sell finished goods to
retailers, manufacturers, and institutions.
Firms that sell finished goods to retailers, manufacturers, and
institutions.
Agents andBrokers
Agents andBrokers
Agents are sales representatives of manufacturers and wholesalers, and brokers are entities that bring
buyers and sellers together.
Agents are sales representatives of manufacturers and wholesalers, and brokers are entities that bring
buyers and sellers together.
RetailersRetailersFirms that sell goods to consumers
and to industrial users for their own consumption.
Firms that sell goods to consumers and to industrial users for their
own consumption.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 8Ch
apte
r 15
2 Channels of Distribution
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 9Ch
apte
r 15
2Functions of Distribution
Channels
Ease the flow of goodsEase the flow of goods
Perform needed functionsPerform needed functions
Reduce the number of transactionsReduce the number of transactions
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 10Ch
apte
r 15
2Functions of Distribution
ChannelsWithout a marketing
intermediaryPublishers
Students
With a marketing intermediary
Publishers
Students
Bookstore
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 11Ch
apte
r 15
2Functions of Distribution
Channels
ChannelsChannelsease theease the
flow of goodsflow of goods
ChannelsChannelsease theease the
flow of goodsflow of goodsAccumulatingAccumulating
Sorting outSorting out
AllocatingAllocating
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 12Ch
apte
r 15
3 Learning Goal 3
How are channels organized?
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 13Ch
apte
r 15
3 Vertical Marketing Systems
Basic Types Basic Types ofof
VerticalVerticalMarketingMarketingSystemsSystems
Basic Types Basic Types ofof
VerticalVerticalMarketingMarketingSystemsSystems
CorporateCorporate
AdministrativeAdministrative
ContractualContractual
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 14Ch
apte
r 15
3 Corporate Distribution Systems
Backward IntegrationBackward Integration
Occurs when a wholesaler or retailer gains control over the
production process
Occurs when a wholesaler or retailer gains control over the
production process
ForwardIntegrationForward
Integration Occurs when a manufacturer
acquires a marketing intermediary closer to the customer
Occurs when a manufacturer acquires a marketing intermediary
closer to the customer
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 15Ch
apte
r 15
4
When would a marketer useexclusive, selective, or intensive distribution?
Learning Goal 4
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 16Ch
apte
r 15
4 The Intensity of Market Coverage
SelectiveDistributionSelective
Distribution
A manufacturer selected a limited number of dealers in an area (but more than one or two) to market
its products.
A manufacturer selected a limited number of dealers in an area (but more than one or two) to market
its products.
IntensiveDistributionIntensive
DistributionA manufacturer tries to sell its products wherever there are
potential customers.
A manufacturer tries to sell its products wherever there are
potential customers.
ExclusiveDistributionExclusive
DistributionA manufacturer selects only one
or two dealers in an area to market its products.
A manufacturer selects only one or two dealers in an area to market
its products.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 17Ch
apte
r 15
4 The Intensity of Market Coverage
Exclusive Selective Intensive
Jaguarautomobiles
Sharp TV
Sharp TV Sharp
TV
Wrigley’s gumWrigley’s gum
Wrigley’s gumWrigley’s gum
Wrigley’s gumWrigley’s gum
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 18Ch
apte
r 15
What is wholesaling, and what What is wholesaling, and what are the types of wholesalers?are the types of wholesalers?
What is wholesaling, and what What is wholesaling, and what are the types of wholesalers?are the types of wholesalers?
Learning Goal 55
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 19Ch
apte
r 15
5
ManufacturerManufacturer Wholesalingintermediaries
Wholesalingintermediaries
Agents andbrokers
Agents andbrokers
Merchantwholesalers
Merchantwholesalers
Retailers orindustrial users
Retailers orindustrial users
Customers
Full-service
Limited-service
Oftenselective
orexclusive
distribution
Oftenintensivedistribution
The Two Categories of Wholesalers
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 20Ch
apte
r 15
Learning Goal 66
What are the different kinds ofWhat are the different kinds ofretail operations and the components retail operations and the components
of a successful retailing strategy?of a successful retailing strategy?
What are the different kinds ofWhat are the different kinds ofretail operations and the components retail operations and the components
of a successful retailing strategy?of a successful retailing strategy?
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 21Ch
apte
r 15
Types of Retail Operations6
In-Store RetailingIn-Store Retailing Nonstore RetailingNonstore Retailing
Department store
Specialty store
Convenience store
Supermarket
Discount store
Off-price retailer
Factory outlet
Catalog store
Hypermart
Vending machine
Direct selling
Direct-response marketing
Home shopping networks
Internet retailing
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 22Ch
apte
r 15
Components of a Successful Retailing Strategy6
Define a target marketDefine a target market
Develop a product offering
Create an image and a promotional strategy
Choose a location
Set prices
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 23Ch
apte
r 15
Creating a Store’s Atmosphere6
Fixture type and densityFixture type and density
Merchandise type and densityMerchandise type and density
Employee type and densityEmployee type and density
SoundSound
OdorsOdors
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 24Ch
apte
r 15
Learning Goal 77
How can supply chain managementHow can supply chain managementincrease efficiency and customerincrease efficiency and customer
satisfaction?satisfaction?
How can supply chain managementHow can supply chain managementincrease efficiency and customerincrease efficiency and customer
satisfaction?satisfaction?
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 25Ch
apte
r 15
Responsibilities of Supply Chain Managers
7
Make channel strategy decisions
Coordinate the sourcing and procurement of raw materials
Schedule production
Process orders
Manage inventory
Transport and store supplies and finished goods
Coordinate customer service activities
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 26Ch
apte
r 15
Major Modes of Transportation7
Railroads
Motor carriers
Pipelines
Water transportation
Airways
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 27Ch
apte
r 15
Transportation Decisions7
Criteria Criteria for for
Mode ofMode ofTransportationTransportation
Criteria Criteria for for
Mode ofMode ofTransportationTransportation
ReliabilityReliability
Transit TimeTransit Time
CostCost
CapabilityCapability
AccessibilityAccessibility
TraceabilityTraceability
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 28Ch
apte
r 15
7
Highest LowestHighest Lowest
Relative costRelative cost
Transit timeTransit time
ReliabilityReliability
CapabilityCapability
AccessibilityAccessibility
TraceabilityTraceability
AirAir
WaterWater
PipePipe
WaterWater
TruckTruck
AirAir
TruckTruck
RailRail
TruckTruck
RailRail
RailRail
TruckTruck
RailRail
PipePipe
RailRail
TruckTruck
AirAir
RailRail
PipePipe
TruckTruck
AirAir
AirAir
WaterWater
WaterWater
WaterWater
AirAir
WaterWater
PipePipe
PipePipe
PipePipe
Ranking Modes of Transportation
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 29Ch
apte
r 15
Learning Goal 88
What are the trends in distribution?What are the trends in distribution?What are the trends in distribution?What are the trends in distribution?
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 30Ch
apte
r 15
Trends in Distribution8
Information SharingInformation Sharing
Category Management Category Management