CLEP Principles of Marketing Study Notes

Whether or not wholesalers are involved distribution

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Whether or not wholesalers are involved, distribution of goods requires wholesaling activities , which typically include: Warehousing Transporting
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Financing Major wholesaling - activities include warehousing, transporting, and financing. Inventory control and promotion are also often included. Customer Service Standard – different customers requiring different levels of service. Wholesalers often play a part in the sorting process, by accumulating products and redistributing them in smaller units. Sorting process consists: Sorting, Accumulating, Assorting Intermediaries often handle some or all of the sorting process, with wholesalers typically doing the sorting and accumulating, and retailers doing the assorting . Out of the marketing mix, producers often choose to control product, pricing, and promotion, while shifting physical distribution functions, such as transportation, warehousing, and financing over to wholesalers . Suboptimization – cost-reducing actions in 1 distribution function that increase overall cost of other distribution functions. Physical Distribution is the one of the "Four P's" which many producers don't directly control themselves. Independent wholesalers can usually more efficiently handle distribution functions, while also acting as an extension of the producer's sales force. Order Processing Electronic Data Interchange (EDI) – allows company to integrate order processing, production, inventory, transportation into 1 system. Materials Handling Unit Loading – Group boxes on pallet/skid . Containerization – consolidating items in 1 container. Warehousing Types of Warehouses: 1. Public (best suited for seasonal use) – when company stores large volumes of goods on a regular basis) 2. Distribution Centers – main function is to re-distribute stock, not store it. 3. Bonded Storage 1. Order Lead Time – 2. Reorder Point – new orders need to be placed to avoid stock out. 3. Stock Out – shortage of product due to too few in inventory. 4. Usage Rate – rate at which inventory sold per time period. 5. Safety Stock – extra inventory 6. Economic Order Quantity (EOQ) 7. Just-In-Time (JIT) – making products available when needed. Transportation Modes MegaCarriers
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Whether or not wholesalers are involved distribution of...

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