Part 5 Place Dynamics
328
Bulk-breaking is the process of
separating a large quantity of goods into
smaller quantities for resale. Intermediaries
buy goods in bulk, and then break down the
bulk into smaller quantities of goods. For
example, it is easier and less costly to ship
a bushel of apples than 100 separate apples.
The grocery store will buy apples by the
bushel, and then display them and sell them
to customers a few at a time.
A manufacturer might decide to sell
its goods in bulk directly to a retailer.
This situation occurs with huge retailers
that buy large quantities of goods from
one manufacturer. For example, Walmart
buys many of its goods directly from
manufacturers. Walmart then handles all
the bulk-breaking tasks. First the goods are
broken into smaller quantities and delivered
to each Walmart store. Then the retailer
displays the goods, which the customers can
buy in even smaller quantities.
Other producers sell their products in
bulk to wholesalers. The wholesalers then
break down the bulk and sell the products
to retailers.
List five products that you buy singly, that is,
one at a time. List five products that you buy
two or three at a time. Name a product that you
buy in large quantities. How many do you buy
at a time? For each product, how many do you
think the retailer buys at a time?
3
Reality Check
Some Four P Marketing
Activities
Retailers are probably the intermediaries
with which you are most familiar. Retailers
do not make the goods they sell. Retailers
are service businesses. They buy goods from
wholesalers or producers. Retailers then offer
these goods for sale to consumers. Retailers
often perform some or all of the Four Ps of
marketing.
n Product. Although retailers do not make
the products they sell, they decide which
goods to sell. The selection of goods to
sell is very important to the success of
One Transaction, Many Customers
Apple
Orchard
Grocery
Store
Many Customers
26-12
The retailer, in this case the grocery store,
handles transactions with many customers. Thus
one supplier can reach many more customers
than if each customer had to go to the supplier’s
location. The retailer also saves the supplier the
tasks of handling each individual customer’s
transaction.