Page 209 - Foundations of Marketing

176 Part 3 | Customer Behavior and E-Marketing

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Illinois, Texas, Ohio, Pennsylvania, New Jersey, and Florida. Although some products are
sold directly to end users, many manufacturers sell their products to wholesalers, which in turn
sell the products to other firms in the distribution system. Thus, wholesalers are very important
in helping producers get their products to customers.
Retailers purchase products and resell them to final consumers. There are more than
1 million retailers in the United States, employing nearly 14.5 million people and gen-
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erating approximately $ 3.9 trillion in annual revenues. The United States continues to
be a powerful force in retailing. Half of the top 10 largest retail companies in the world
are based in the United States. These retailers are Walmart, The Kroger Co., Costco,
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The Home Depot Inc., and Walgreen Co. Some retailers—Home Depot, PetSmart, and
Staples, for example—carry a large number of items. Supermarkets may handle as many
as 50,000 different products. In small, individually owned retail stores, owners or manag-
ers make purchasing decisions. In chain stores, a central office buyer or buying committee
frequently decides whether a product will be made available for selection by store manag-
ers. For many products, however, local managers make the actual buying decisions for a
particular store.
When making purchase decisions, resellers consider several factors. They evaluate the
level of demand for a product to determine the quantity and the price at which the product
can be resold. Retailers assess the amount of space required to handle a product relative to
its potential profit, sometimes on the basis of sales per square foot of selling area. Because
customers often depend on resellers to have products available when needed, resellers
typically appraise a supplier’s ability to provide adequate quantities when and where they
are needed. Resellers also take into account the ease of placing orders and whether produc-
ers offer technical assistance or training programs. Before resellers buy a product for the
first time, they will try to determine whether the product competes with or complements
products they currently handle. These types of concerns distinguish reseller markets from
other markets.

Emerging Trends

Made in America Is Hot Business Trend

A steady rise in popularity of “made in America” prod- made in America—mainly to keep U.S. jobs from moving
ucts is boosting demand for all kinds of consumer and abroad. This strong interest has prompted Walmart to
industrial products—and for the suppliers that sell to announce plans to buy $ 50 billion worth of U.S.-made
the marketers of U.S.-made items. The list of American- merchandise during the next decade.
made consumer products includes K’Nex building toys, Apple is riding the made-in-America trend by invest-
Tervis drink tumblers, Allen Edmonds shoes, and some ing $ 100 million to increase U.S. production of some of
Apple Macintosh computers. Industrial products made in its Macintosh computers. Even the tens of millions of
America include Excel hand dryers for commercial use, Apple iPhones, iPods, iPads, and other items assembled
Estex tool bags for energy utility use, and Council Tool in China every year incorporate made-in-America com-
axes for forestry use. ponents such as computer chips made in Texas and
Not only are U.S.-made products enjoying a resur- screen glass made in Kentucky. Watch for more economic
gence, they often command a price premium. According ripples as the trend toward made-in-America products
to a recent survey, more than 80 percent of U.S. consum- boosts demand for an ocean of goods and services from
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ers are willing to pay a higher price for products that are U.S. businesses.

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