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Chapter 17. Managing Retailing, Wholesaling, and Market Logistics. Marketing Management Tenth Edition Philip Kotler. Objectives. Retailing Wholesaling Market Logistics. Four Levels of Retail Service. Self-service Self-selection Limited-service Full-service. Broad. Breadth of

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Chapter 17

Managing Retailing,

Wholesaling, and

Market Logistics

Marketing Management

Tenth Edition

Philip Kotler


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Objectives

  • Retailing

  • Wholesaling

  • Market Logistics


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Four Levels of Retail Service

  • Self-service

  • Self-selection

  • Limited-service

  • Full-service


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Broad

Breadth of

product line

Narrow

Value added

Low

High

Retail Positioning Map

Bloomingdale’s

Wal-Mart

Tiffany

Kinney

Shoe


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Classification Of Retailer Types

Narrow Product Line, Deep Assortment

Wide Variety of Product Lines i.e. Clothing, Home Furnishings, & Household Items

Wide Variety of Food, Laundry, & Household Products

Limited Line of High-Turnover Convenience Goods

Broad Product Line, Low Margin, High Volume

Inexpensive, Overruns, Irregulars, and Leftover Goods

Large Assortment of Routinely Purchased Food & Nonfood Products, Plus Services

Broad Selection, Fast Turnover, Discount Prices

Store Type Length and Breadth of Product Assortment

Specialty Stores

Department Stores

Supermarkets

Convenience Stores

Discount Stores

Off-Price Retailer

Superstores

Catalog Showroom


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Types of NonStore Retailing

Direct Selling

Direct Marketing

NonStore Retailing Accounts for More Than 12% of All Consumer Purchases, and is trending up.

Automatic Vending

Buying Services


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Wheel of Retailing

Mid Price

Mid Status

Mid Margin

Low Price

Low Status

Low Margin

High Price

High Status

High Margin

New Entrants


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Why are Wholesalers Used?

Wholesaler

Functions

Selling and

Promoting

Management

Services & Advice

Market

Information

Buying and

Assortment Building

Bulk Breaking

Risk Bearing

Financing

Warehousing

Transporting


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Higher Distribution Costs/ Higher Customer Service Levels

Lower Distribution Costs/ Lower Customer Service Levels

Goals of the Logistics System


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Transportation Least Cost. Water, Truck, Rail, Pipeline & Air

Logistics Systems

Order Processing

Submitted

Processed

Shipped

Costs

Minimize Costs of

Attaining Logistics

Objectives

Logistics

Functions

Warehousing

Storage

Distribution

Inventory

When to order

How much to order

Just-in-time


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Rail Least Cost.

Nation’s largest carrier, cost-effective

for shipping bulk products, piggyback

Truck

Flexible in routing & time schedules, efficient

for short-hauls of high value goods

Water

Low cost for shipping bulky, low-value

goods, slowest form

Pipeline

Ship petroleum, natural gas, and chemicals

from sources to markets

Air

High cost, ideal when speed is needed or to

ship high-value, low-bulk items

Transportation Modes


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1. Speed. Least Cost.

2. Dependability.

3. Capability.

4. Availability.

5. Cost.

Checklist for Choosing

Transportation Modes


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Speed Dependability Capability Availability Cost

(Door-to-

door

delivery

time)

(Meeting

Schedules

on Time)

(Ability to

Handle

Various

Products)

(No. of

Geographic

Points

Served)

(Per

Ton-

Mile)

Rating Transportation Modes

Rail 3 4 2 2 3

Water 4 5 1 4 1

Truck 2 2 3 1 4

Pipeline 5 1 5 5 2

Air 1 3 4 3 5

Source: See Carl M. Guelzo; Introduction to Logistics Management Englewood Cliffs, NJ:

Prentice Hall, 1986), p. 46.


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Review Cost

  • Retailing

  • Wholesaling

  • Market Logistics


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