Determining The Place And Functions Of The Cash And Carry Wholesaler In The South African Distribution Channel

7493 words - 30 pages

SYNOPSISThe traditional South Africancash and carry wholesaler has survived for more than twenty years in its present form but is showing signs of being influenced by a strong innovative process. Factors such as smaller packaging, credit, delivery and consumer marketing, which go against the principles of the traditional cash and carry wholesaler, are taking root. Innovation is being spurred on by changes in the target market, specifically as a result of the inclusion of the spaza shop target market. The research shows that the spaza shop is a vital future market of the cash and carry wholesaler.In the research undertaken, the opinions of cash and carry wholesalers were gathered on various aspects of the role of the cash and carry wholesaler in the South African distribution channel. The main findings are that mutual competition has increased and this is threatening the survival of the smaller cash and carry wholesalers. The large retailer was identified as the main competitor of the cash and carry wholesaler. Intensive competition forces the cash and carry wholesaler to modify its marketing functions. Modifications have already been made to the packaging, credit, and delivery functions. Consequently, the cash and carry wholesaler performs more functions typical of the large retailer and full-service wholesaler. There are indications that a new type of cash and carry wholesaler is developing with characteristics of both the large retailer and the full-service wholesaler.It can be concluded that the cash and carry wholesaler definitely fulfils a vital role in the South African distribution channel. The existence of the cash and carry wholesaler in the distribution channel depends largely on its ability to adapt its marketing functions to keep abreast with changing target markets.1.1INTRODUCTIONThe wholesale sector of the economy is often known as the invisible industry because the final consumer does not usually purchase directly from the wholesaler and therefore has little contact with it. The cash and carry wholesaler is a typical wholesaler that performs essential marketing functions between the manufacturer and the retailer, and therefore provides a link between the two. The retailer, in turn, is the link between the cash and carry wholesaler and the consumer in the distribution channel. The retailer can therefore be regarded as the cash and carry wholesaler's primary target market.This article aims to determine the place and function of the cash and carry wholesaler in the South African distribution channel.The cash and carry wholesaler's place in the South African distribution channel will now be outlined under the following headings: definition, origin, development, future, competitive position, right of existence and target markets.1.2.1 Definition of the cash and carry wholesalerA cash and carry wholesaler is a typical wholesaler that sells a limited range of products, and according to Skinner (2005:405), does not perform all the...

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