Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e- Place and Development
of Channel Systems
Text © The McGraw−Hill
Companies, 2002312 Chapter 11
Many middlemen who operate from Internet websites focus on accumulating.
Specialized sites for everything from Chinese art to Dutch flower bulbs bring
together the output of many producers.
Bulk-breaking involves dividing larger quantities into smaller quantities as prod-
ucts get closer to the final market. Sometimes this even starts at the producer’s level.
A golf ball producer may need 25 wholesalers to help sell its output. And the bulk-
breaking may involve several levels of middlemen. Wholesalers may sell smaller
quantities to other wholesalers or directly to retailers. Retailers continue breaking
bulk as they sell individual items to their customers.Adjusting assortment discrepancies by sorting and assorting
Different types of specialists adjust assortment discrepancies. They perform two
types of regrouping activities: sorting and assorting.
Sorting means separating products into grades and qualities desired by different
target markets. For example, an investment firm might offer its customers a chance
to buy shares in a mutual fund made up only of stocks for certain types of compa-
nies—high-growth firms, ones that pay regular dividends, or ones that have good
environmental track records.
Similarly, a wholesaler that specializes in serving convenience stores may focus
on smaller packages of frequently used products, whereas a wholesaler working with
restaurants and hotels might handle only very large institutional sizes.
Sorting is also a very important process for raw materials. Nature produces what
it will—and then the products must be sorted to meet the needs of different target
markets.
Assortingmeans putting together a variety of products to give a target market
what it wants. This usually is done by those closest to the final consumer or user—
retailers or wholesalers who try to supply a wide assortment of products for the
convenience of their customers. A grocery store is a good example. But some assort-
ments involve very different products. A wholesaler selling Yazoo tractors and
mowers to golf courses might also carry Pennington grass seed, Scott fertilizer, and
even golf ball washers or irrigation systems—for its customers’ convenience.Sometimes these discrepancies are adjusted badly—especially when consumer
wants and attitudes shift rapidly. When cellular phones suddenly became popular,
an opportunity developed for a new specialist. Cellular phone dealers came on the
scene to help customers figure out what type of cellular phone and service would
meet their needs. After all, the traditional phone companies didn’t initially offer
these services. However, it cost the sellers of cellular services about $300 per cus-
tomer to sell through dealers. As the market grew and the competition for customersTo reach its place objectives,
Sprint sells PCS phones and its
wireless services through 12,000
outlets, including retail chains like
Staples and its own Sprint PCS
Centers.
Watch for changes