Encyclopedias and vacuum cleaners were traditionally

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Unformatted text preview: a business and a business plan. The restaurant industry, for example, is what we call “pulverized,” which, like the dry cleaning industry, is made up of many small participants. The fast-food business, on the other hand, is composed of a few national brands participating in thousands of branded outlets, many of them franchised. HURDLE: THE BOOK 9.2 ON BUSINESS PLANNING Economists talk of consolidation in an industry as a time when many small participants tend to disappear and a few large players emerge. In accounting, for example, there are a few large international firms whose names are well known and tens of thousands of smaller firms. The automobile business is composed of a few national brands participating in thousands of branded dealerships. In computer manufacturing, for example, there are a few large international firms whose names are well known, and thousands of smaller firms. Distribution Patterns Explain how distribution works in your industry. Is this an industry in which retailers are supported by regional distributors, as is the case for computer products, magazines, or auto parts? Does this industry depend on direct sales to large industrial customers? Do manufacturers support their own direct sales forces, or do they work with product representatives? Some products are almost always sold through retail stores to consumers, and sometimes these are distributed by distribution companies that buy from manufacturers. In other cases, the products are sold directly from manufacturers to stores. Some products are sold directly from the manufacturer to the final consumer through mail campaigns, national advertising, the Internet, or other promotional means. In many product categories there are several alternatives, and distribution choices are strategic. Encyclopedias and vacuum cleaners were traditionally sold door-to-door, but are now also sold in stores and direct from manufacturer to consumer through radio, television, and Sunday newspaper print ads. Many products are distributed through direct business-to-business sales, and in long-term contracts such as t...
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