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Part SixDistribution Decisions16 Wholesaling and Physical DistributionObjectives1. To understand the nature of wholesaling in the marketing channel2. To explain wholesalers’ functions3. To understand how wholesalers are classified4. To recognize how physical distribution activities are integrated into marketing channels and overall marketing strategies2Copyright 169。 Houghton Mifflin Company. All rights reserved.Objectives5. To examine the major physical distribution functions of order processing, inventory management, materials handling, warehousing, and transportation6. To discuss the strategic implications of physical distribution systems3Copyright 169。 Houghton Mifflin Company. All rights reserved.Chapter Outline? The Nature of Wholesaling? Types of Wholesalers? The Nature of Physical Distribution? Functions of Physical Distribution? Strategic Issues in Distribution4Copyright 169。 Houghton Mifflin Company. All rights reserved.The Nature of Wholesaling? Wholesaling– Transactions in which products are bought for resale, for making other products, or for general business operations? Wholesaler– An individual or anization that facilitates and expedites wholesale transactions? Handles the physical distribution of goods? Furnishes channel information to facilitate and manage the supply channel5Copyright 169。 Houghton Mifflin Company. All rights reserved.6Copyright 169。 Houghton Mifflin Company. All rights reserved.The Nature of Wholesaling (cont’d)? Services Provided by Wholesalers– Serve as an extension of the producer’s sales force through contact with suppliers and retailers– Lend financial assistance for the distribution channel? Transporting and warehousing inventories? Assuming credit risks of buyers/customers? Purchasing producers’ entire output: converting producer’s output immediately to working capital? Channeling information from and to sellers and buyers7Copyright 169。 Houghton Mifflin Company. All rights reserved.The Nature of Wholesaling (cont’d)? Advantages in Utilizing Wholesalers– Have closer contact with retailers– Are less expensive and more efficient than maintaining an independent sales force– Can spread selling costs over more products– Can assist in selecting optimum inventory– Are experts in negotiating final purchases– Are knowledgeable about sources of supply– Perform physical distribution activities efficien