Chapter 15 – Distributing Products
15-1
Distributing Products
chapter
=
what’s new in this edition 15.3
brief chapter outline and learning goals 15.3
lecture outline and lecture notes 15.6
PowerPoint slide notes 15.41
lecture links 15.59
lecture link 15-1: WHY THERE ARE NO INDIAN WAL-MARTS 15.60
lecture link 15-2: WHATEVER HAPPENED TO DOOR–TO-DOOR DELIVERY? 15.60
lecture link 15-3: WHOLESALE CLUBS THRIVE IN THE RECESSION 15.60
lecture link 15-4: WHAT INTERMEDIARIES TO USE WHEN GOING 15.61
INTERNATIONAL
lecture link 15-5: THE MARKETING FIRM STOCKING AMERICA’S GROCERIES 15.61
lecture link 15-6: HOW RETAILERS COMPETE 15.62
lecture link 15-7: PARTY ON 15.64
lecture link 15-8: WHEN THE SUPPLY CHAIN BREAKS 15.64
lecture link 15-9: THE HIGH-TECH FUTURE OF FREIGHT 15.66
15
Chapter 15 – Distributing Products
15-2
critical thinking exercises 15.67
critical thinking exercise 15-1: TOP 100 RETAILERS 15.67
critical thinking exercise 15-2: FORMS OF UTILITY 15.69
critical thinking exercise 15-3: DISTRIBUTION CHANNELS 15.69
critical thinking exercise 15-4: RETAIL DISTRIBUTION STRATEGY 15.70
critical thinking exercise 15-5: CAREERS IN DISTRIBUTION 15.72
critical thinking exercise 15-6: INTERNET AUCTIONS: BYPASSING THE 15.73
RETAILER
bonus cases 15.74
bonus case 15-1: UNITED STATIONERS: OFFICE-SUPPLY INTERMEDIARY 15.74
bonus case 15-2: STARTING AN ONLINE BUSINESS 15.76
bonus case 15-3: MULTILEVEL MARKETING 15.78
what’s new in
this edition
additions to the 10th edition:
• Getting to Know Tony Hsieh, CEO of Zappos
revisions to the 10th edition:
• Text was revised to eliminate redundancy and tighten discussions.
Chapter 15 – Distributing Products
15-3
deletions from the 9th edition:
brief chapter outline
and learning goals
c h a p t e r 15
Distributing Products
Getting To Know TONY HSIEH of ZAPPOS
learning goal 1
I. THE EMERGENCE OF MARKETING INTERMEDIARIES
learning goal 2
II. THE UTILITIES CREATED BY INTERMEDIARIES
A. Form Utility
Chapter 15 – Distributing Products
15-4
learning goal 3
III. WHOLESALE INTERMEDIARIES
A. Merchant Wholesalers
B. Agent and Brokers
learning goal 4
IV. RETAIL INTERMEDIARIES
A. Retail Distribution Strategy
learning goal 5
Explain the various kinds of nonstore retailing.
V. NONSTORE RETAILING
A. Electronic Retailing
learning goal 6
Explain the various ways to build cooperation in channel systems.
VI. BUILDING COOPERATION IN CHANNEL SYSTEMS
learning goal 7
Describe logistics and outline how intermediaries manage the transportation and storage of
goods.
Chapter 15 – Distributing Products
15-5
VII. LOGISTICS: GETTING GOODS TO CONSUMERS EFFICIENTLY
A. Trains Are Great for Large Shipments.
B. Trucks Are Good for Small Shipments to Remote Locations.
VIII. WHAT ALL THIS MEANS TO YOU
IX. SUMMARY
Chapter 15 – Distributing Products
Getting to Know TONY HSIEH of ZAPPOS
E-tailers sometimes fall short of brick-and-mortal rivals in customer service. That’s not the
case for Zappos. Hsieh wanted to make sure his site was different; he wanted to wow customers
with service. Call-center staffers have freedom to do whatever they can to remedy a situation.
His commitment to quality and service has grown Zappos into an online powerhouse.
I. THE EMERGENCE OF MARKETING INTERME-
DIARIES
A. THE IMPORTANCE OF DISTRIBUTION
1. There are hundreds of thousands of marketing in-
distribution network from producers to customers.
2. MARKETING INTERMEDIARIES are organiza-
tions that assist in moving goods and services
Although this automobile manufacturer builds its cars in South Korea, the 30,000 com-
ponents come from all over the world. For example, the airbags come from a Swedish
company that makes them in Utah. Its supply chain is truly interfirm and international.
Name that company.
15-8
PPT 15-5
Name That Company
(See complete PowerPoint slide notes on page 15.42.)
lecture link 15-1
WHY THERE ARE NO INDIAN
WAL-MARTS
There are millions of small shop owners in India who are
fighting to keep the big retail chains out of the country. (See
the complete lecture link on page 15.59 in this manual.)
PPT 15-6
What Are Marketing
Intermediaries?
(See complete PowerPoint slide notes on page 15.42.)
PPT 15-7
What Are Marketing
Intermediaries?
(See complete PowerPoint slide notes on page 15.43.)
Chapter 15 – Distributing Products
15-9
B. WHY MARKETING NEEDS INTERMEDIARIES
1. Not all manufacturers need marketing intermedi-
Chapter 15 – Distributing Products
15–10
thinking
green
(Text page 407)
PPT 15-8
Distribution and
Sustainability
(See complete PowerPoint slide notes on page 15.43.)
PPT 15-9
Types of Marketing Intermediaries?
(See complete PowerPoint slide notes on page 15.43.)
critical thinking
exercise 15-1
TOP 100 RETAILERS
This exercise asks students to use the Internet to research
the top 100 U.S. retailers. (See complete exercise on page
15.67 of this manual.)
PPT 15-10
Selected Channels of Distribution
TEXT FIGURE 15.1
Selected Channels of Distribution
for Consumer and Industrial Goods
and Services
(Text page 408)
(See complete PowerPoint slide notes on page 15.44.)
PPT 15-11
Why Marketing Needs
Intermediaries
(See complete PowerPoint slide notes on page 15.44.)
PPT 15-12
How Intermediaries Create
Exchange Efficiency
TEXT FIGURE 15.2
How Intermediaries Create
Exchange Efficiency
(Text page 409)
(See complete PowerPoint slide notes on page 15.44.)
Chapter 15 – Distributing Products
INTERMEDIARIES, we could greatly reduce the
cost of the things we buy.
2. The text uses the example of a breakfast cereal
Chapter 15 – Distributing Products
bonus case 15-1
UNITED STATIONERS: OFFICE-
SUPPLY INTERMEDIARY
This case focuses on Randall Larrimore of United Station-
ers. Larrimore modified the company’s distribution strategy to
compete with office-supply giants such as Office Depot and
Staples. (See the complete case, discussion questions, and
suggested answers beginning on page 15.74 of this manual.)
PPT 15-13
Three Key Facts about Marketing
Intermediaries
(See complete PowerPoint slide notes on page 15.45.)
PPT 15-14
Distribution’s Effect on Your Food
Dollar
TEXT FIGURE 15.3
Distribution’s Effect on Your
Food Dollar
(Text page 410)
(See complete PowerPoint slide notes on page 15.45.)
Chapter 15 – Distributing Products
learning goal 2
II. THE UTILITIES CREATED BY INTERMEDIARIES
A. UTILITY, in economics, is the want-satisfying ability,
B. FORM UTILITY is taking raw materials and changing
their form so that they become useful products.
Chapter 15 – Distributing Products
critical thinking
exercise 15-2
FORMS OF UTILITY
This exercise presents a series of businesses and asks the
students to describe how they create each type of utility. (See
the complete exercise on page 15.69 of this manual.)
PPT 15-15
Intermediaries Create Utility
(See complete PowerPoint slide notes on page 15.45.)
lecture link 15-2
WHATEVER HAPPENED TO
DOOR-TO-DOOR DELIVERY?
Many new developments have been made the door-to-door
salesperson obsolete. (See the complete lecture link on page
15.60 in this manual.)
PPT 15-16
How Marketers Use Utility
(See complete PowerPoint slide notes on page 15.46.)
PPT 15-17
How Marketers Use Utility
(See complete PowerPoint slide notes on page 15.46.)
PPT 15-18
How Marketers Use Utility
(See complete PowerPoint slide notes on page 15.46.)
Chapter 15 – Distributing Products
G. SERVICE UTILITY
1. Intermediaries create SERVICE UTILITY; adding
A. DIFFERENCES BETWEEN WHOLESALERS AND
1. Some producers will sell only to wholesalers.
1. FULL-SERVICE WHOLESALERS perform all of
Chapter 15 – Distributing Products
progress
assessment
(Text page 412)
PPT 15-19
Progress Assessment
(See complete PowerPoint slide notes on page 15.47.)
PPT 15-20
Wholesale Intermediaries
(See complete PowerPoint slide notes on page 15.48.)
lecture link 15-3
WHOLESALE CLUBS THRIVE IN
THE RECESSION
Wholesale clubs are drawing in penny pinchers during our
economic downturn. (See the complete lecture link on page
15.60 in this manual.)
lecture link 15-4
WHAT INTERMEDIARIES TO USE
WHEN GOING INTERNATIONAL
What intermediaries are needed to reach the international
customer? (See the complete lecture link on page 15.61 of this
manual.)
critical thinking
exercise 15-3
DISTRIBUTION CHANNELS
This exercise asks students to identify the channels of dis-
tribution of manufacturers in their areas. (See the complete
exercise on page 15.69 of this manual.)
PPT 15-21
Types of Wholesale Intermediaries
(See complete PowerPoint slide notes on page 15.48.)
TEXT FIGURE 15.4
A Full-Service Wholesaler
(Text page 414)
This text figure shows the functions performed by a full-
service wholesaler.
Chapter 15 – Distributing Products
15–17
4. CASH-AND-CARRY WHOLESALERS are
wholesalers that serve mostly smaller retailers
Chapter 15 – Distributing Products
15–18
PPT 15-22
Types of Limited-Function
Wholesalers
(See complete PowerPoint slide notes on page 15.48.)
PPT 15-23
Roles of Agents and Brokers
(See complete PowerPoint slide notes on page 15.49.)
lecture link 15-5
THE MARKETING FIRM
STOCKING AMERICA’S
GROCERIES
Jacksonville-based Acosta is responsible for getting big re-
tailers to stock their clients’ products. (See complete lecture
link on page 15.61 of this manual.)
PPT 15-24
Retailing in the U.S.
(See complete PowerPoint slide notes on page 15.49.)
SPOTLIGHT ON
small
business
(Text page 416)
PPT 15-25
Pop! Goes the
Retail Store
(See complete PowerPoint slide notes on page 15.49.)
Chapter 15 – Distributing Products
Fastest-Growing Retail Categories
(See complete PowerPoint slide notes on page 15.50.)
learning goal 4
IV. RETAIL INTERMEDIARIES
B. RETAIL DISTRIBUTION STRATEGY
1. Different products call for different retail distribu-
only a preferred group of retailers in an area
PPT 15-27
How to Prevent Coupon Fraud
(See complete PowerPoint slide notes on page 15.50.)
PPT 15-28
How to Prevent Return Policy
Fraud
(See complete PowerPoint slide notes on page 15.50.)
lecture link 15-6
HOW RETAILERS COMPETE
Retailers compete for the consumer’s dollar in five major
ways. (See the complete lecture link on page 15.62 of this
manual.)
PPT 15-29
Types of Retail Stores
TEXT FIGURE 15.5
Types of Retail Stores
(Text page 415)
(See complete PowerPoint slide notes on page 15.51.)
PPT 15-30
Retail Distribution Strategies
(See complete PowerPoint slide notes on page 15.51.)
critical thinking
exercise 15-4
RETAIL DISTRIBUTION
STRATEGY
This exercise asks students to give examples of each cate-
gory of distribution strategy. (See complete exercise on page
15.70 of this manual.)
PPT 15-31
Pick a Strategy . . .
(See complete PowerPoint slide notes on page 15.51.)