chapter 15

Retailers

Organizations that sell to ultimate consumers

Channel of distribution

consists of a set of marketing intermediaries, such as agents, brokers, wholesalers, and retailers, that join together to transport and store goods in their path (or channel) from producers to consumers

electronic retailing

consists of selling goods and services to ultimate consumers online

social commerce

form of electronic commerce that involves using social media, online media that supports social interaction, and user contributions to assist in the online buying and selling of products and services

types of utility

form, time, place, possession, information, service

Rack jobbers

furnish racks or shelves of merchandise like music, toys, hosiery and health and beauty aids, to retailers

direct marketing

includes any activity that directly links manufacturers or intermediaries with the ultimate consumer. ex. direct mail catalog sales, and telemarketing as well as online marketing

merchant wholesalers

independently owned firms that take title take title to the goods they handle. About 80 percent of wholesalers fall in this category. 2 types of merchant wholesalers

telemarketing

is the sale of goods and services by telephone, many companies use it to supplement or replace in-store selling and complement online selling

Wholesalers

marketing intermediaries that sells to other organizations, such as retailers, manufacturers, and hospitals. Wholesalers are part of the B2B system

agents/brokers

marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don't take title to the goods -- that is, at no point do they own the goods. think of real estate agents as an example

contractual distribution system

members are bound to cooperate through contractual agreements. ex. franchise, retailer cooperatives, wholesaler sponsored

corporate distribution system

one firm owns all the organizations in the channel of distribution

administered distribution system

a system in which producers manage all the marketing functions at the retail level

supply chain

all the linked activities various organizations must perform to move goods and services from the sources of raw materials to ultimate consumers

selective distribution

uses only a preferred group of the available retailers in an area

intensive distribution

puts products into as many retail outlets as possible including vending machines

direct selling

reaches consumers in their homes or workplaces

cash and carry wholesalers

serve mostly smaller retailers with a limited assortment of products

drop shippers

solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer

retail cooperatives

the arrangement is much like a wholesaler-sponsored chain except it is intitiated by the retailers. The same degree of cooperation exists and the stores remain independent.

Basic Points about intermediaries

1. marketing intermediaries can be eliminated but their activities can't. someone has to do the job, but intermediaries do it the best 2. Intermediaries survive because they perform marketing functions faster and cheaper than others 3. Intermediaries add costs to products, but these costs to products, but these costs are usually more than offset by the values they create

exclusive distribution

is the use of only one retail outlet in a given geographic area. The retailer has exclusive rights to sell products and therefore likely to carry a large inventory, give exceptional service, and pay more attention to this brand than to others

marketing intermediaries

organizations that assist in moving goods and services from producers to businesses (B2B) and from businesses to consumers (B2C). They're called intermediaries because they're in the middle of a series of organizations that join together to help distribute goods from producers to consumers

logistics

planning, implementing, and controlling of the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet consumer requirements at a profit

materials handling

the movement of goods within a warehouse, from warehouses to factory floor, and from the factory floor to various workstations

wholesaler-sponsored chains

things like ace hardware where each store signs an agreement to use the same name and participate as a unified system of stores even though each is individually owned and managed

franchise systems

things like mcdonalds, KFC where franchisee agrees to all rules regulations and procedures established by the franchisor. Consistent quality and level of service you find in most franchised organizations