1. 16-1

2. 16-2 Wholesaling and Physical Distribution Chapter 16 McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

3. 16-3 Chapter Goals McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. Nature and economic justification of wholesaling Role of wholesaling in the distribution process Differences across three categories of wholesaling middlemen Major types of merchant wholesalers, agent middlemen, and manufacturer’s sales facilities Nature and purpose of physical distribution Systems approach to physical distribution How physical distribution can strengthen a marketing program and reduce costs Five subsystems within physical distribution

4. 16-4 Wholesaling WHOLESALING All activities related to the sale of goods and services to businesses and other organizations WHOLESALING All activities related to the sale of goods and services to businesses and other organizations For resale, use in producing other products, operating an organization For resale, use in producing other products, operating an organization

5. 16-5 Economy of Transactions in Wholesaling

6. 16-6 Size of the Wholesale Market

7. 16-7 Profile of the Wholesaling Middleman

8. 16-8 Share of Wholesale Trade

9. 16-9 Full-Service Wholesalers’ Services

10. 16-10 Agent Wholesaling Middlemen Manufacturers’ Agents Manufacturers’ Agents Selling Agents Selling Agents Brokers Auction Company Auction Company

11. 16-11 Which Type of Middlemen to Use?

12. 16-12 Physical Distribution PHYSICAL DISTRIBUTION LOGISTICS All activities involved in moving the right product to the right place at the right time PHYSICAL DISTRIBUTION LOGISTICS All activities involved in moving the right product to the right place at the right time

13. 16-13 Physical Distribution Gain Differential advantage Coordinated logistics Supply Chain Management Fulfillment In E-commerce Reduce costs

14. 16-14 Strategic Use of Physical Distribution Create Time and Place Utilities Create Time and Place Utilities Reduce Distribution Costs Reduce Distribution Costs Improve Customer Service Improve Customer Service Stabilize Prices Stabilize Prices Control Shipping Costs Control Shipping Costs Influence Channel Decisions Influence Channel Decisions

15. 16-15 Physical Distribution Inventory Control Inventory Control Order Processing Order Processing Customer Service Electronic Data Interchange

16. 16-16 Economic Order Quantity

17. 16-17 Inventory Location and Warehousing Types of Warehouses PrivatePublic Materials Handling

18. 16-18 Comparison of Transportation Methods

19. 16-19 Comparison of Transportation Methods

20. 16-20 Transportation Package- delivery Package- delivery Intermodal Transportation Intermodal Transportation Freight Forwarders Freight Forwarders Major Modes Major Modes

21. 16-21 Key Terms and Concepts McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. Wholesaling Wholesaling middlemen Merchant wholesaler Agent wholesaling middleman Manufacturer’s sales facility Manufacturer’s sales branch Manufacturer’s sales office Full-service wholesaler Truck jobber Drop shipper Manufacturers’ agent Broker Selling agent Auction company Import-export agents Physical distribution Fulfillment

22. 16-22 Key Terms and Concepts McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. Online category manager Supply chain management Total cost concept Contract logistics Physical distribution management Electronic data interchange (EDI) Economic order quantity (EOQ) Just-in-Time Market response system Collaborative, planning, forecasting, and replenishment (CPER) Enterprise resource planning (ERP) systems Private warehouse Public warehouse Distribution center

23. 16-23 Key Terms and Concepts McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. Containerization Intermodal transportation One-stop shipping Freight forwarder Package-delivery firms