Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e

13. Retailers, Wholesalers
    and Their Strategy
    Planning

Text © The McGraw−Hill

Companies, 2002

Retailers, Wholesalers, and Their Strategy Planning 377

Progress—or fail

Perhaps good-bye

to some

Many modern wholesalers are

adopting new technologies to

become more effective. For

example, CrossLink’s satellite

communication system tracks the

temperature of refrigerated

deliveries and notifies the central

office if there is any risk that

products will be spoiled.

in Chapter 11. Progressive wholesalers are becoming more concerned with their

customers and with channel systems. Many are using technology to offer better

service. Others develop voluntary chains that bind them more closely to their

customers.

Modern wholesalers no longer require all customers to pay for all the services

they offer simply because certain customers use them. Many offer a basic service at

minimum cost—then charge additional fees for any special services required.

Most modern wholesalers have streamlined their operations to cut unnecessary

costs and improve profits. In fact, wholesalers pioneered many of the recent logistics

innovations we discussed in Chapter 12. They use computers to track inventory and

reorder only when it’s really needed. Computerized sales analysis helps them identify

and drop unprofitable products and customers. This sometimes leads to a selective

distribution policy—when it’s unprofitable to build relationships with too many small

customers. Then they can fine-tune how they add value for their profitable customers.

Many wholesalers are also modernizing their warehouses and physical handling

facilities. They mark products with bar codes that can be read with hand-held scan-

ners—so inventory, shipping, and sales records can be easily and instantly updated.

Computerized order-picking systems speed the job of assembling orders. New stor-

ing facilities are carefully located to minimize the costs of both incoming freight

and deliveries. Delivery vehicles travel to customers in a computer-selected sequence

that reduces the number of miles traveled. And wholesalers who serve manufactur-

ers are rising to the challenge of just-in-time delivery.

Not all wholesalers are progressive, and some less efficient ones will fail. Effi-

ciency and low cost, however, are not all that’s needed for success. Some wholesalers

will disappear as the functions they provided in the past are shifted and shared in

different ways in the channel. Cost-conscious buyers for Wal-Mart, Lowe’s, and

other chains are refusing to deal with some of the middlemen who represent small