Summary
Summary Chapter 16 - Business Management 114
- Course
- Institution
Summary of 3 pages for the course Business Management 114 at SUN
[Show more]
Seller
Follow
BMX
Content preview
Chapter 16 – Wholesaling, Retailing and PhysicalDistribution
Channels of Distribution – Sequence of marketing organizations that
move product from producer to ultimate user.
Middleman
Merchant Middleman – takes title of goods before selling them
Functional Middleman – helps transfer of ownership but
doesn’t take ownership
Channels for Consumer Products
Producer to Consumer (direct channel)
1. Almost all services and practically no goods
2. Producer controls quality
Producer to retailer to consumer
1. Retailer is merchant middleman
2. Often furniture, perishables and high-end fashion.
Producer to wholesaler to retailer to consumer
1. Traditional channel
2. Mainly convenience goods
Producer to agent to Wholesaler to retailer to Consumer
1. Agents = functional middleman
2. Small producers wanting to reach large amount of
suppliers
3. Seasonal products e.g. Christmas
Producers often use multiple channels. A different channel is
used for each market segment.
Channels for business products
Producer to business
1. Heavy machinery, airplanes and major equipment
2. Short channel allows timely services like delivery,
installation and repairs
Producer to Agent middleman to Business User
1. Used for supplies, accessories to equipment small tools
2. Agent independent and usually represents the seller.
Levels of Market coverage
Intensive Distribution – many retail outlets used. Highest
possible exposure.
Selective distribution – only portion of outlets used in each
geographical area
Exclusive Distribution – Only single distribution outlet in large
geographical area
, Marketing Intermediaries (wholesalers)
Justifications for market Intermediaries
They preform essential services
Would increase the records manufactures have keep
Market would be much more inefficient and price would not
decrease as wholesalers keep it as low as possible in order to
stay in business while producers do not have to do this.
Reduces the amount contacts, exchanges between producer
and buyers thus more efficient
Independent retailer – firm that operates only on retail outlet
Chain retailer – Firms operates more than one outlet
Classes of in-store retailers
Department stores
Large establishment with several sectors/departments
Must employ at least 25 members of staff and sell home
furnishings, appliances, family apparel, household linens
and dry goods
Discount Stores
In areas with low rent and self-service. In order to sell
products at less than normal selling price.
Catalog showroom
Retailer with well known brands and sells then at discount
prices through catalog
Warehouse Showrooms
Retailer with a large low cost building; warehouse material
handling technology, vertical merchandise displays, large
on premises inventory; minimal service.
Convenience Stores
Small food store sells limited variety but is open well
beyond normal business hours
Supermarket
Large self-service store that sell primary food and
household products
Minimum sales per year = 2 million
Superstores
Like supermarket with additional product lines e.g.
hardware, clothing etc.
Warehouse Clubs
Large scale members only establishments that combine
cash and carry wholesaling with discount retailing
Traditional Specialty stores
Narrow product mix with deep product lines e.g tekkie
town
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller BMX. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.76. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53022 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now