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Chapter: 18
MANAGING RETAILING,
WHOLESELING AND
LOGISTICS
RETAILING
Retailing is a distribution channel function
where one organization buys products from
supplying firms or manufactures the product
themselves and then sells these directly to
consumers. A retailer is a reseller who obtains
product from one party in order to sell to
another from which a consumer purchases
products. Retailing is a first moving challenging
industry. Example: Wal-Mart, AMAZON.COM,
McDonalds.
TYPES OF RETAIL
There are two types of retail. They are given belowStore Retail: Store retail is a place of business
usually owned and operated by a retailer but
sometimes owned and operated by a manufacturer
or by someone other than a retailer in which
merchandise is sold primarily to ultimate
consumers. Example: SEARS
Non-store retail: Non-store retailing is the selling
of a retail facility. It is a generic term describing
retailing taking place outside of shops and stores.
Example: Smart shop, yahoo shop, TV network.
SERVICE OF RETAILERS
CORPORATE RETAILING
Corporate retailing is corporately owned
retailing. Although many retail stores are
indecently owned, an increasing number are
part of a corporate retailing organization. These
organizations achieve economic of scale,
greater purchasing power, wider brand
recognition, and better- trained employees than
independent stores can usually gain alone.
WHOLESALING
Wholesaling includes all the activities in selling
goods or services directly to those who buy for
resale or business use.
TYPES OF WHOLESALING
There are six types of wholesaling. They are Merchant Wholesalers: Independently owned, take title to the
merchandise they handle. They can provide full service or limited
service.
Full-Service Wholesalers: Provide full service like maintain sales
force, offer credit, make deliveries etc.
Limited-Service Wholesalers: Provide limited service, like cash
and carry wholesalers sell FMCGs to small retailers for cash.
Brokers and Agents: Do not take title of goods. They facilitate
buying and selling on commission basis.
Manufacturers and Retailers Branches and Offices: Wholesaling
operations conducted by sellers or buyers themselves rather though
independent wholesalers.
Specialized Wholesalers: Auction companies, agricultural
assemblers they buy agricultural output of many farms.
Franchising
Contractual association between a franchisor
and franchises, popular in a number of product
and service areas. Ex: Pizza-Hut.
Growth of Intertype Competition:
Procurement
After deciding on the product assortment strategy,
the retailer must establish merchandise sources,
policies and practices. In the corporate
headquarters of a supermarket chain, specialist
buyers are responsible for developing brand
assortment and listening the presentation from
their suppliers sales people. Retailers are rapidly
improving their skills in demand forecasting,
merchandise selection, stock control, space
allocation and display.
Market logistics
Market logistics involves planning the
infrastructure to meet demand, then
implementing and controlling the physical flows
of materials and final goods from point of origin
to point of use to meet customer requirements
at a profit.
Market-Logistics Decisions
Four major decisions must be made with regard to market logistics
ORDER PROCESSING: Most companies today are trying to shorten
the order-to-payment-cycle the t is the elapsed time between an
order receipt, delivery and payment. This cycle involves many
steps, including order transmission by the salesperson, order entry
and customer credit check, inventory and production scheduling,
order and invoice shipment and receipt of payment.
WAREHOUSING: Every company has to store finished goods until
they are sold, because production and consumption cycles rarely
match. The storage function helps to smooth discrepancies between
production and quantities desired by the market. The company
must decide on the number of inventory stocking limitations. To
reduce warehousing and inventory duplication costs, the company
might centralize its inventory in one place and use fast
transportation to fulfill orders.
END