Transcript Unit 4 Review.ppt

Chapter 21
channels of
distribution
Section 21.1
Distribution
Section 21.2
Distribution Planning
Section 21.1
Distribution
• Explain the concept of channel of distribution.
• Identify channel members.
• Compare different channels of distribution.
Section 21.1
Distribution
Distribution: How It Works
To make a place decision,
marketers must decide on a channel
of distribution.
channel of distribution
The path a product takes from its producer
or manufacturer to the final user.
Section 21.1
Distribution
Distribution: How It Works
Merchant intermediaries take title of
goods and services. Agent
intermediaries do not.
intermediary
Middleman business involved in sales
transactions that move products from the
manufacturer to the final user.
Section 21.1
Distribution
Distribution: How It Works
Wholesalers
Rack Jobbers
Drop Shippers
wholesaler
A business that obtains goods from manufacturers
and resells them to organizational users, other
wholesalers, and retailers, also called distributors.
rack jobber
One who manages inventory and merchandising for
retailers by counting stock, filling the shelves when
needed, and maintaining store displays.
drop shipper
One who owns the goods he or she sells, but does
not physically handle the actual products.
Section 21.1
Distribution
Distribution: How It Works
Retailers
Brick-and-Mortar
Retailer
E-Tailing
retailer
A business that buys goods from wholesalers or
directly from manufacturers and resells them to
consumers.
brick-and-mortar retailer
A traditional retailer who sells goods to customers
from a physical store.
e-tailing
Online retailing that involves retailers selling products
over the Internet to customers.
Section 21.1
Distribution
Distribution: How It Works
Descriptions for
Rack Jobbers,
Drop Shippers,
Brick-and-Mortar,
and E-Tailers.
Section 21.1
Distribution
Distribution: How It Works
Channels of
Distribution
Direct
Distribution
Indirect
Distribution
direct distribution
A channel of distribution that occurs when the
producer sells goods or services directly to the
customer with no intermediaries.
indirect distribution
A channel of distribution that involves one or more
intermediaries.
Section 21.1
Distribution
Distribution: How It Works
Comparing Distribution Channels for Consumer
Products and for Industrial Products
Section 21.2
Distribution Planning
Main Components of Distribution Planning
Section 21.2
Distribution Planning
Understanding Distribution Planning
Describe Each Type of Distribution
Chapter 22
physical distribution
Section 22.1
Transportation
Section 22.2
Inventory Storage
Section 22.1
Transportation
• Describe the nature and scope of physical distribution.
• Identify transportation systems and services that move products from
manufacturers to consumers.
Section 22.1
Transportation
The Nature and Scope of Physical Distribution
Physical Distribution
Key link between a business and its customers
Goods can be stored in convenient locations
Also known as logistics
Each link in the system affects the other links
Needs to be as efficient and cost effective as possible
physical distribution
Activities for delivering the right
amount of product to the right place at
the right time.
Section 22.1
Transportation
The Nature and Scope of Physical Distribution
Three Factors Affecting Transportation Costs
Section 22.1
Transportation
Types of Transportation Systems
Percentage of Freight Shipped by Each Type of
Single-Mode Transportation in the United States
Section 22.1
Transportation
Types of Transportation Systems
Advantages of
Truck Transportation
Disadvantages of
Truck Transportation
Convenient door-to-door
delivery
Cost more than rail and
water carriers
Rapid delivery reduces the
need for large inventories
Susceptible to delays
Section 22.1
Transportation
Types of Transportation Systems
Trains transport nearly 15 percent of the total
ton-miles of freight shipped in the United States.
Rates charged for less-than-carload shipments are
more expensive.
ton-mile
Movement of one ton (2,000 pounds) of freight one mile.
carload
Minimum number of pounds of freight needed to fill a boxcar.
Section 22.1
Transportation
Types of Transportation Systems
Advantages of
Railroad Transportation
Low cost
Requires less energy than
motor carriers
Seldom slowed by bad
weather
Disadvantages of
Railroad Transportation
Lack of flexibility of
delivery locations
Section 22.1
Transportation
Types of Transportation Systems
Advantages of
Pipelines
Low operational costs
Safety record
Low instances of damage
or theft
Not subject to weather
delays
Disadvantages of
Pipelines
Leaks can damage the
environment
Section 22.1
Transportation
Types of Transportation Systems
Advantages of
Marine Shipping
Low cost
Disadvantages of
Marine Shipping
Slow
Freight must be off-loaded onto
railroad cars or motor carriers
Affected by bad weather
Section 22.1
Transportation
Types of Transportation Systems
Advantages of
Air Cargo Services
Disadvantages of
Air Cargo Services
Speed
High cost
Reduced inventory
expenses and storage
costs
Mechanical breakdowns
Weather delays
Section 22.2
Inventory Storage
Inventory storage allows a business to keep its
products in a safe location until they are
needed or ready to be sold.
Chapter 23
purchasing
Section 23.1
The Role of the Buyer
Section 23.2
The Purchasing
Process
Section 23.1
The Role of the Buyer
Write Two or Three Sentences
Describing These Markets
Section 23.1
The Role of the Buyer
Getting Ready to Sell
Organizational buyers must
have knowledge about:
§ The products they buy
§ The manufacturing and service operations
of their firm
organizational buyer
One who purchases goods for business
purposes, usually in greater quantities
than that of the average consumer.
Section 23.1
The Role of the Buyer
Getting Ready to Sell
Wholesaler and Retail Buyers
Forecasting customers’ needs and buy necessary products
Planning far in advance of the selling season
wholesale and retail buyers
Buyers who purchase goods for resale.
Section 23.1
The Role of the Buyer
Getting Ready to Sell
Six-Month Merchandise Plan
Goal of the current year is derived from last year’s sales
Buyers ensure there is enough stock for planned sales
The end-of-month (EOM) stock figure is related to the
beginning-of-the-month (BOM) figure
Buyers take into account planned retail reductions
During the buying season, a buyer may want to know the
open-to-buy (OTB)
six-month merchandise plan
The budget that estimates planned
purchases for a six-month period.
open-to-buy (OTB)
The amount of money a retailer has left for
buying goods after considering all purchases
received, on order, and in transit.
Section 23.1
The Role of the Buyer
Getting Ready to Sell
Four Common Causes of Retail Reduction
Section 23.1
The Role of the Buyer
Getting Ready to Sell
Benefits of
Centralized Buying
Coordinates Buyers’
Efforts
Creates a
Unified Image
Power to
Negotiate Prices
centralized buying
The buying process for all branches
in a chain-store operation done in a
central location.
Section 23.1
The Role of the Buyer
Getting Ready to Sell
Benefits of
Decentralized Buying
More
Sales Potential
More
Local Control
decentralized buying
The buying process in which local
store managers or designated buyers
are authorized to make special
purchases for their individual stores.
Section 23.2
The Purchasing Process
Understanding the Process
Three Types of Purchase Situations
New-Task
Purchase
(want slip)
Modified
Rebuy
Straight
Rebuy
want slip
Customer request for an item or items
not carried in the store.
Section 23.2
The Purchasing Process
Understanding the Process
Criteria for Selecting Suppliers
Section 23.2
The Purchasing Process
Understanding the Process
Negotiated Terms
Prices
Dating Terms
Delivery
Arrangements
Discounts
Chapter 24
stock handling and
inventory control
Section 24.1
Stock Handling
Section 24.2
Inventory Control
Section 24.1
Stock Handling
• Describe the receiving process.
• Explain stock handling techniques used in receiving deliveries.
Section 24.2
Inventory Control
Inventory Management
The inventory managed by a
business depends on the type
of business.
inventory
Amount of merchandise on hand at any particular time,
including raw materials, parts from suppliers, manufactured
subassemblies, work-in-process, packing materials, or
finished goods.
Section 24.1
Stock Handling
Key Steps in the Stock Handling Process
Section 24.1
Stock Handling
Stock Handling
Checking Methods
and Facts About
Each Method
Section 24.2
Inventory Control
Inventory owned by a business represents a
capital investment until the products are sold.
Effective inventory management and accurate
inventory systems increase profits.
Section 24.2
Inventory Control
Notes on Inventory Systems
Section 24.2
Inventory Control
Inventory Management
What Can Inventory Management Prevent?
Storing the wrong merchandise
Too high inventories
Too low inventories
Misuse of storage space
Increased personnel costs
Increased interest and insurance expenses
inventory management
The process of buying and storing materials and products while
controlling costs for ordering, shipping, handling, and storage.
Section 24.2
Inventory Control
Stock Control
Different Types of Stock Lists and Details About Each
Section 24.2
Inventory Control
The Impact of Technology
Real-Time Inventory Systems
Standardized Shipping
Container Marking (SCM)
Radio Frequency
Identification (RFID)
Warehouse Management
Systems (WMS)
Universal Product
Codes (UPCs)
Quick Response Delivery
(QRD)
Electronic Data
Interchange (EDI)
real-time inventory system
A system that uses Internet technology that connects
applications, data, and users in real time.