KOHLS

1
KOHLS UHL CHAPTER 6

• FOOD DISTRIBUTION

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Review
Kohls Uhl Chapter 5 Food Processing

• A. Food Processors Use The 4 P's To Develop
  Market Strategies
• B. Fewer, But Larger Food Processors
• C. Location For Food Processing Has Changed Over
  Time
• D. Law Of Market Areas Defines Market Boundaries

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AG MARKETING CONCEPTS

• Wk 1 Kohls Chap 1 Intro To Food Marketing
• Wk 2 Kohls Chap 2 Analyzing Food Markets
• Kohls Chap 3 Ag Prod Marketing
• Wk 3 Kohls Chap 4 Food Consumption
• Kohls Chap 5 Food Processing
• WK 4 KOHLS CHAP 6 FOOD DISTRIBUTION
• Kohls Chap 7 International Marketing
• Wk 5 Kohls Chap 8 Price Analysis
• Kohls Chap 9 Mkt Competition
• Friday Midterm

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Kohls Uhl Chapter 6 Food Distribution
Learning Objectives After This Lesson, The
Student Should Be Able To

• Discuss The Importance Of A Food Distribution
  Systems.
• Discuss How The Wheel Of Retailing Relates To The
  Development Of Food Distribution
• 3. Discuss The Relative Importance Of The
  Different Kinds Of Distribution

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Concept Importance
Kohls Uhl Chapter 6 Food Distribution

• Would You The Farmer, Want To Delivery Every
  Thing You Produced Directly To The Thousands Of
  Consumers?

Would You The Consumer, Want To Go Directly To
The Producer, For Everything You Purchase?
No
Would This Be Efficient?
Solution A Food Distribution System
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Kohls Uhl Chapter 6 Food Distribution

• Discussion PointsI. Direct
• II. Through Stores
• A. Wholesaling
• B. Retailing
• C. History
• D. Current Situation
• III. Through Food Service

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I. Marketing Direct W/O Middleman
Learning Objective
Discuss The Importance Of A Food Distribution
Systems
6-1
Lvstk Farmer
Grain Farmer
Produce
Produce
Mill
Slaughter
Package
Wrap/Freeze
Consumer C
Consumer A
Consumer B
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Marketing With Middlepersons
Learning Objective
Discuss The Importance Of A Food Distribution
Systems
6-1
Lvstk Farmer
Grain Farmer
Production
Collecting Market
Elevator
Auction
Process/Pack
Mill/Bake
Slaughter
Central Dispersal Market Super Mkt
Consumer C
Consumer A
Consumer B
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Middlepersons
Learning Objective
Discuss The Importance Of A Food Distribution
Systems
6-1

• Individuals Or Businesses Who Specialized In
  Performing Value (Utility) Adding Functions As
  Goods Moved From Producer To Consumer

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Food Sales
Learning Objective
Discuss The Importance Of A Food Distribution
Systems
6-1
Food Stores
Food Service
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A. Food Wholesaler
Learning Objective
Discuss The Importance Of A Food Distribution
Systems
6-1
II. Through Stores (53 Sold)

• 1. Between Processor Retailer
• 2. 10 Of Food Cost
• 3. Add Place Possession Utility
• 4. Types Of Wholesalers

Possession
Title
A. Merchant
Yes
Yes
B. Broker
Yes
No
C. Agent
No
No
D. Manuf Rep
No
No
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5. Merchant Wholesalers
Learning Objective
Discuss The Importance Of A Food Distribution
Systems
6-1

• A. 75 Of Number
• B. 60 Of Sales
• C. Full Serv Provide Retailer
• 1). Inventory Control
• 2). Adv Promotion
• 3). Site Selection
• 4). Pricing
• 5). Loans

D. Limited Service
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Learning Objective
Discuss The Importance Of A Food Distribution
Systems
6-1

• E. Specialty Vs General Line

1). Meat
2). Dairy
3). Produce
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F. Wholesale Ownership Patterns
Learning Objective
Discuss The Importance Of A Food Distribution
Systems
6-1

• 1). Big Chain Distribution Centers
• A). Multi-state B). Multi-store

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Learning Objective
Discuss The Importance Of A Food Distribution
Systems
6-1
2). Small Chain Distribution Centers A).
Regional B). 2- 11 Stores
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Learning Objective
Discuss The Importance Of A Food Distribution
Systems
6-1

• 3). Cooperative Wholesaler

A). Retailers Own Wholesaler B). IGA, Super Val
4). Independent Food Wholesaler
A). Typically Smaller
B). Specialty
5). Trends A). Bigger Size B). Number
Constant C). Reasonable Profits
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B. Food Retailers Sales To Home
Learning Objective
Discuss The Importance Of A Food Distribution
Systems
6-1

• 1. Importance
• A. Largest Retail Sector 25
• B. 7 Of Consumer's Income
• C. Interact With Consumer
• D. 1st To Detect Change In Buying Habits
• E. Channel Captain Control
• F. Controls Access To Customer
• G. Major Decisions In Food Industry

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2. Functions
Learning Objective
Discuss The Importance Of A Food Distribution
Systems
6-1

• A. Assemble Thousand Of Items
• 1) gt16,000 In Typical Store
• 2) Turn Over Of 2,000 Items/Yr
• B. Display

C. Advertise Promote 1). Discount Cards
2). Newspaper Ads 3). Demonstrations 4).
Samples 5). Coupons 6). Loss-leaders
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C. History (Wheel Of Retailing)
Discuss How The Wheel Of Retailing Relates To
Food Distribution
Learning Objective
6-2
What Goes Around, Comes Around

• 1. Early General Store

A. Had Food Non-food Items
B. One Stop Shopping
2. Ma Pop Grocery Store
A. In Neighborhood
B. Food Only
C. Credit
D. Custom Cut Meat
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3. Chain Store Movement
Discuss How The Wheel Of Retailing Relates To
Food Distribution
Learning Objective
6-2

• A. 11 Related Stores
• B. Started W/ AP 1858

C. Peaked About 1929 D. Market Share 1948 38
-- 1992 65 E. Motivated By Efficiency F. Types
Of Chains 1). Corporate 2). Coop
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Discuss How The Wheel Of Retailing Relates To
Food Distribution
Learning Objective
6-2

• 4. Supermarket Movement
• A. Customer, Market Driven
• B. 1st SELF SERV STORE 1916
• C. Grew Rapidly On West Coast
• D. Universal By 1950
• E. Influencing Factors
• 1). Suburbanization
• 2). Dev Of Shopping Centers

3). Customer Mobility 4). Rising Consumer
Incomes 5). Mass Media Advertising
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5. Supermarkets (gt2.5 Mil/Yr/Store)
Discuss How The Wheel Of Retailing Relates To
Food Distribution
Learning Objective
6-2

• A. Merchandise, Not Service
• B. Low Cost
• C. 70 Of Food Store Sales
• D. Description
• 1). Departmentalized
• 2). Cash Carry
• 3). Self-service
• 4). Full-line

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6. Super Stores
Discuss How The Wheel Of Retailing Relates To
Food Distribution
Learning Objective
6-2

• A. Carry Everything Like Gen Store
• B. In Competition With
• 1). Convenience Stores
• 2). Discount Food Stores
• 3). Conventional Supermarket
• C. 0ne Stop Shopping

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Wheel Of Retailing- General-
Discuss How The Wheel Of Retailing Relates To
Food Distribution
Learning Objective
6-2
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Wheel Of Retailing- Food -
Discuss How The Wheel Of Retailing Relates To
Food Distribution
Learning Objective
6-2
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D. Current Situation
Discuss How The Wheel Of Retailing Relates To
Food Distribution
Learning Objective
6-2

• 1. Competition
• A. Sm Independents Driven Out
• B. Mobility Gives Many Choices
• 2. Pricing
• A. Retail Price Set More By Goals Than By
  Farm Price
• B. Pricing Strategies
• 1). Market Basket Pricing
• 2). Variable Price
• 3). Everyday Low Pricing

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3. Store Mixture
Discuss How The Wheel Of Retailing Relates To
Food Distribution
Learning Objective
6-2

• A. Conventional Supermarket

1. Mostly Food Items 2. Self-service
1. Prescrip Reg Drugs 2. 25 Non-food Items
B. Comb Fd Drug
1. More Departments 2. Large Size
C. Superstore
1. Very Low Service 2. Low Cost
D. Warehouse Store
1. Huge Variety 2. Huge Size
E. Hyper Mkt
1. Premium Quality 2. High Prices
F. Gourmet
1. Small, Neighborhood 2. Long Hours, Quick Serv
G. Convenience
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III. Food Service Sales 47
Discuss The Relative Importance Of The Different
Kinds Of Distribution
Learning Objective
6-3

• A . Restaurants

30 Of The 47
1. Chains
2. Local "Mom Pop"
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B. Fast Food
Discuss The Relative Importance Of The Different
Kinds Of Distribution
Learning Objective
6-3
33 Of The 47
1. 1/3 Of All Comm Hamburger

• 2. Uses 7.5 Of Us Potato Crop

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D. Other 12
Discuss The Relative Importance Of The Different
Kinds Of Distribution
Learning Objective
6-3
C. Institutions 24 Of The 47
Nursing Homes
Schools
Hospital
Jail
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F. Evolution - Trend
Discuss The Relative Importance Of The Different
Kinds Of Distribution
Learning Objective
6-3
Attitude
Location
I'll Grow I Cook
1. At Home On Farm
They Grow I'll Cook
2. At Home In City
They Cook Ill Warm
3. At Home In City
They Cook Ill Eat
4. Away From Home In City
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Summary
Kohls Uhl Chapter 6 Food Distribution

• A. Three Types Of Wholesalers Exhibit 4 Ownership
  Patterns
• B. Food Retailing Has Undergone Many Changes Over
  The Years
• C. Many Types Of Food Retailers Compete For Food
  Dollar
• D. Food Retailer Is "Channel Captain" -- The Boss
• E. Food Away From Home Is 1/3 Of All Food Sales
  With Restaurants, Fast Food, Institutions About
  Equal

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Self Test Food Distribution Kohls Chap 6
A. Customer Mobility B. IGA C. Institutional
Food Sales D. Kroger E. Mom Pop Stores F.
Retailer G. Retailer Function H. Super Store
I. Wheel Of Retailing J. None Of The Above
J

• __1. Title Possession
• __ 2. Channel Captain
• __ 3. Modern General Store
• __ 4. Coop Wholesaler
• __ 5. What Goes Around,
• Comes Around
• __ 6. Custom Cut Meat
• __ 7. Supermarket Movement
• __ 8. Chain Store Age
• __ 9. Assemble, Display, Promote
• __10. Can't Get Food For Themselves

F
H
B
I
E
A
D
G
C
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NEXT FOOD MARKETING TOPIC

• INTERNATIONAL FOOD MARKETING