1. Nickels
Cover
Nickels
McHugh

2. Distributing Products Quickly and Efficiently
Chapter
Distributing Products Quickly and Efficiently 15
15-2

3. Channel of Distribution
Marketing Intermediaries
Wholesaler
Retailer
Agents/Brokers
Role of Intermediaries
Create Efficiency
Value vs. Cost

4. Utility
Form
Possession
Time
Information
Service
Place

5. Wholesale Intermediaries
Merchant Wholesalers
Full-Service
Limited-Function
Rack Jobbers
Cash-and-Carry
Drop Shippers
Business to Business (B2B)

6. Percent of B2B Commerce from Internet
*Excludes Service Industries
Source: Forrester Research Inc.

7. They All Started in 1962 Company 1st Store Objective Wal-Mart Target
Rogers, Ark.
July 1962
Slash prices. Makeup difference in volume
Target
Roseville, MN
May 1962
Discount retailer with strong sense of value
Kmart
Garden City, MI
March 1962
Bring discount store concept to suburban malls
Source: Business 2.0, June 2003, p. 38.

8. Over 100 Million Customers Weekly
Wal-Mart
2003 – 4,773 Stores 962,000 associates U.S. 282,000 international #1 Retailer over $250 Billion in sales
Over 100 Million Customers Weekly
Source: Business 2.0, June 2003, p. 38.

9. Wal-Mart’s Top Selling Products
Sales in Millions
Source: Owen Thomas “Lord of the Things”, Business 2.0, March 2002, p. 32.

10. Target 2002 Revenues > $43 Billion Profits = 1.7 Billion
1,107 Stores in 47 State Employs > 192,000
Source: Business 2.0, June 2003, p. 38.

11. Kmart 1,115 Kmarts in 49 states 170,000 associates
Average Kmart stocks > 100,000 SKUs (stock keeping units)
Successfully emerged from bankruptcy in 2003
Source: Business 2.0, June 2003, p. 38.

12. Top Convenience Stores
Top Five Supermarkets
Top Convenience Stores
Wal-Mart
Kroger
Ahold
Abertson’s
Costco
Quik Trip
7-Eleven

13. Home Depot 2002 Sales $58.2 Billion Lowe’s 2002 Sales $26 Billion
Shopping Centers
Category Killers
Home Depot Sales $58.2 Billion
Lowe’s Sales $26 Billion
46,336 Shopping Centers in U.S Million Adults visited shopping centers

14. Is It Becoming a Wal-Mart World?
*There are 3,400 stores in the U.S.
Source: Wal-Mart Annual Report 2003

15. The Wheel of Retailing 2. Retail Outlet 3. Retail Outlet Passage of
Adds Service
Raises Prices
Better Location
Higher Prices
Higher Status
Passage of
Time
4. New Outlet Enters
1. Retail Outlet Starts
Low Price
Limited Service
Low Price
Limited Service
Out-of-way Location

16. Retail Store Distribution
Intensive
Selective
Exclusive

17. Non-Store Distribution
E-tailing
Telemarketing
Vending Machines, Kiosks, Carts
Direct Selling
Multilevel Marketing
Direct Marketing

18. Top Internet Shopping Sites
Site Hits in Millions
Week Ending 12/1/02
Source: USA Today, “Snapshots”

19. Why Buy Gifts Online?
Source: “Dreaming of a Green Christmas”, Newsweek, November 11, 2002, p. E24

20. Why People Don’t Shop Online
It isn’t secure
It will jeopardize my privacy
Usually must pay shipping charges
Not enough selection
Can’t touch/try things first
No satisfaction guarantee
Returns are a hassle
Won’t arrive on time
Hard to find things online
Enjoy getting out of house to shop
Source: blink,

21. Necessary Website Features
Source: “Dreaming of a Green Christmas”, Newsweek, November 11, 2002, p. E24

22. Channel Cooperation Corporate Distribution Contractual Distribution
Administered Distribution
Supply Chain Management

23. The Supply Chain

24. Logistics Physical Distribution Inbound Materials Outbound Reverse
Information

25. Transportation & Storage Modes
Railroad
Motor Vehicles
Water
Pipeline
Air
Intermodal
Warehousing
Storage
Distribution