Distribution And Supply Chain Management Flashcards
What can the marketing channel be defined as?
A group of individuals and organizations, each with its own objectives, working together to direct the flow of products from producers to consumers
- can be considered as supply chains when all members of the channel are connected and integrated
What are some implications about distribution?
- one of the most important strategic decisions as without distribution firms can’t get their products to consumers
- failure of distribution typically leads to sales loss
- important in providing time, place and possession Utility for consumer and business buyers.
- are expensive, so must balance the needs of the firm with the needs of customers
What two components makes up distribution?
- Marketing channels
2. Physical distribution
What are the trends in distribution and marketing channels?
- Growth of electronic commerce
- Shifting power in the channel (power shifted from producer to retailer brands)
- Outsourcing functions (transportation)
- Growth of direct and non store retailing (eBay and Amazon)
- Increase of dual distribution channels
What are the type of distribution channels for consumer goods?
- Producer to consumer
- Producer to retailer to consumer
- Producer to wholesaler to retailer to consumer
- Producer to agent to wholesales to retailer to consumer
What is the role of channel intermediaries in improving distribution efficiency?
- Direct distribution: no channel intermediaries
2. Distribution using channel intermediary between producers and consumers
What are the types of distribution?
- Exclusive distribution: when a firm chooses to use a single vendor to serve the market ex: Gucci sell only in certain stores (marketing channel structure)
- Selective distribution: when the distribution is given to a limited number of outlets serving a given region ex: IKEA (distribution and supply chain structure)
- Intensive distribution: having their product as widely available as possible ex: coca cola (distribution and supply chain structure)
Why internationalize distribution?
- saturation of home markets (no more demand)
- industrial concentration in home markets
- restrictive legislation in home markets
- economic position of home markets
- convergence of consumer tastes
How do you internationalize?
- organic growth: establish brand internationally, useful for intercontinental growth
- acquisition: purchasing an established brand, receive established customer base
- franchise: quick growth for simple format retailing, capitalize on franchise knowledge and experience of local area, requires high level of control by franchiser
- joint venture
What are the two types of retail changes?
- natural selection change: this retailers that best adapt to their environment are ms or likely to be successful
- the wheel of retailing: cycles;
Entry phase:
-innovative retailer, low status/price, limited product range, low service (ALDI)
Trading up phase: - traditional retailer: higher price, extended range, higher margins, prestige locations (Tesco)
Vulnerability phase:
-mature retailer: declining ROI, slow growth and high price (M&S)
What is the influence of location and gravitation?
- location influence revenue and costs and therefore profit
- gravitation is the pulling power of the retailer
- gravitation influences the layout of retail centers
What are the influences on location?
- customer (census data, geo-demographic data)
- competition
- planning legislation
- transportation facilities
- geographical considerations
What are the influences on retail gravitation?
- size of outlet or centre
- retail mix
- level of choice
- level of synergy
- availability of parking - Differentiation
- unique product or prestige brand - Accessibility
- lines of transportation
- psychology of distance
- transport cost as a proposition of spend
What are consumer purchase decisions influenced by?
- location of store
- merchandise mix
- price
- promotion
- service levels
- customer (type, state, mood, attitudes, risk perpcetions)
- atmosphere (temperature, Colour, aroma, sound)
- design
- location of goods within store
How do layout and display affect purchasing decisions? And how do they typically locate products?
- it encourages purchase and customer flow
- ‘produce’ at entrance
- staples in remote positions
- high margin/ impulses buys near staples
- high margin buys in prize selling positions
- complementary goods together or apart
- heavy/bulk goods near end of trip
