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Objectives

Retailing

Wholesaling

Market Logistics

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Four Levels of Retail Service

Self-service

Self-selection

Limited-service

Full-service

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Retail Positioning Map

Bloomingdales

KinneyShoe

Wal-Mart

Tiffany

Broad

Narrow

B

readth

of

pr

oductline

Value added

LowHigh

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Class if ication Of Retai ler Types

Specialty Stores

Department Stores

Supermarkets

Convenience Stores

Off-Price Retailer

Superstores

Catalog Showroom

Wide Variety of Product Lines i.e. Clothing,Home Furnishings, & Household Items

Wide Variety of Food, Laundry, & HouseholdProducts

Limited Line of High-Turnover ConvenienceGoods

Inexpensive, Overruns, Irregulars, andLeftover Goods

Large Assortment of Routinely PurchasedFood & Nonfood Products, Plus Services

Broad Selection, Fast Turnover, Discount

Prices

Narrow Product Line, Deep Assortment

Store Type Length and Breadth of ProductAssortment

Discount Stores

Broad Product Line, Low Margin, HighVolume

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Types of NonStore Retailing

Direct Selling

Direct Marketing

Buying Services

NonStore RetailingAccounts for More

Than 12% of All

ConsumerPurchases, and istrending up.

Automatic Vending

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Low Price

Low Status

Low Margin

Mid Price

Mid Status

Mid Margin

High Price

High Status

High Margin

Wheel of Retailing

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Why are Wholesalers Used?

Wholesaler

Functions

Management

Services & Advice

Selling and

Promoting

MarketInformation

Buying andAssortment Building

Risk Bearing Bulk Breaking

Transporting

Financing Warehousing

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Goals of the Logistics System

Provide a Targeted Level of Customer Service atthe Least Cost.

Maximize Profits, Not Sales.

Higher Distribution Costs/Higher Customer Service

Levels

Lower Distribution Costs/

Lower Customer Service

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InventoryWhen to order

How much to orderJust-in-time

CostsMinimize Costs ofAttaining Logistics

Objectives

WarehousingStorage

Distribution

Order ProcessingSubmittedProcessed

Shipped

Logistics

FunctionsTransportationWater, Truck,

Rail,Pipeline & Air

Logistics Systems

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Rail

Nations largest carrier, cost-effectivefor shipping bulk products, piggyback

TruckFlexible in routing & time schedules, efficient

for short-hauls of high value goods

WaterLow cost for shipping bulky, low-value

goods, slowest form

Pipel ine

Ship petroleum, natural gas, and chemicalsfrom sources to markets

A irHigh cost, ideal when speed is needed or to

ship high-value, low-bulk items

Transportation Modes

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1. Speed .

2. Dependabil i ty.

3. Capabil i ty.

4. Avai labi l i ty.

5. Cost .

Checkl is t for Choosing

Transpo rtat ion Modes

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Rating Transportation Modes

Rail 3 4 2 2 3

Water 4 5 1 4 1

Truck 2 2 3 1 4

Pipeline 5 1 5 5 2

Air 1 3 4 3 5

Source:See Carl M. Guelzo; In t rodu ct ion to Logis t ics ManagementEnglewood Cliffs, NJ:

Prentice Hall, 1986), p. 46.

(Door-to-door

deliverytime)

(MeetingScheduleson Time)

(Ability toHandleVarious

Products)

(No. ofGeographic

Points

Served)

(PerTon-

Mile)

Speed Dependability Capability Availability Cost

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Review

Retailing

Wholesaling

Market Logistics