Chapter 4

Subsidiary

A company that is owned by a larger company. Ex: a large multi-unit chain organization may own a company that produces meat items used by the organization.

"Cash and carry"

A purchasing alternative in which the buyer travels to the supplier's site (ex: grocery store), selects desired products, and pays for them at the time of purchase. *ex: Smart & Final, Restaurant Depot*

Specialty line supplier

A supplier who offers a deep selection of relatively few products. Ex: those who sell fresh seafood and who sell dairy products. *i.e.: Great Buns Bakery, Supreme Lobster, Desert Gold Foods, Anderson Dairy*

Broad line supplier

A supplier who provides a wide variety (hundreds or even thousands) of products; also called "one-stop" shopping supplier. *i.e.: US Foods, Sysco*

Sourcing

Activities undertaken to determine which, often from among many, suppliers will be requested to quote prices for the products and services to be purchased by the hospitality organization. *how we find people*

Supplier

Any business (large or small, located within or away from the community) which sells products to a hospitality organization. *Other names: vendor, supplier, distributor, broker, manufacturer*

Service Provider

Any business which sells services to a hospitality organization.

Wholesale buying clubs

Businesses that, for a membership fee, allow buyers to purchase products in large quantities and often in large purchase unit sizes at prices less than their retail competitors. *ex: Sam's Club and Costco*

Distributor

Buy, stock, sell, deliver goods to individual operations (also called purveyors, suppliers, wholesalers and vendors).

Cooperative (pool) buying

Different organizations combining orders.

Source

Farmers, ranchers, fishing companies - raw materials.

Importer

Handles importation of offshore goods (food & non food)

Man. Rep's

On M&P's payroll as sales representatives to promote proprietary products, handles samples & complaints.

Franchisee

One who owns (or leases) the property and building, and who purchases the right to use a franchisor's brand name and operating procedures for a fixed period of time in return for agreed-upon sales royalties and other fees.

Franchisor

One who owns and manages a brand and sells the rights to use it, to franchisees. *ex: Burger King*

Manufacturers & Processors

Processed goods into usable forms (value added). *some sources manufacture their own raw materials*

Secondary suppliers (part of supplier tiering)

Provide a relatively small amount of a specific product.

Sales/Marketing/Brokers

Represent multiple manufacturers and processors, seeks buyers for M&P's goods, brokers usually never buy or handle goods, handles samples, promotions & complaints.

End user/Operator

The hospitality industry in general, the second to last entity prior to the final consumer/guest/customer.

Primary suppliers (part of supplier tiering)

The preferred sources from whom most products needs are obtained.