Distribution Management Reviewer PDF

DISTRIBUTION MANAGEMENT REVIEWER TOPIC 1 THE SUPPLY CHAIN CONSISTS OF UPSTREAM AND DOWNSTREAM PARTNERS. UPSTREAM – SET OF FIRMS THAT SUPPLY RAW MATERIALS COMPONENTS, PARTS, INFORMATION, FINANCES, AND EXPERTISE NEEDED TO CREATE A PRODUCT OR SERVICE. DOWNSTREAM – TRADITIONALLY FOCUSED, LOOK TOWARD...

DISTRIBUTION MANAGEMENT REVIEWER TOPIC 1 THE SUPPLY CHAIN CONSISTS OF UPSTREAM AND DOWNSTREAM PARTNERS. UPSTREAM – SET OF FIRMS THAT SUPPLY RAW MATERIALS COMPONENTS, PARTS, INFORMATION, FINANCES, AND EXPERTISE NEEDED TO CREATE A PRODUCT OR SERVICE. DOWNSTREAM – TRADITIONALLY FOCUSED, LOOK TOWARD THE CUSTOMER, MARKETING CHANNEL PARTNERS SUCH AS WHOLESALERS, AND RETAILERS FORM A VITAL CONNECTION BETWEEN THE FIRM AND ITS CUSTOMERS. VALUE DELIVERY NET WORK – COMPOSED OF THE COMPANY, SUPPLIERS, DISTRIBUTORS AND ULTIMATELY, CUSTOMERS WHO “PARTNER” WITH EACH OTHER TO IMPROVE THE PERFORMANCE OF THE ENTIRE SYSTEM IN DELIVERING CUSTOMER VALUE. DISTRIBUTION CHANNEL OR MARKETING CHANNEL – SET OF INTERDEPENDENT ORGANIZATIONS THAT HELP MAKE A PRODUCT OR SERVICE AVAILABLE FOR USE OR CONSUMPTION BY THE CONSUMER OR BUSINESS USER. CHANNEL LEVEL – EACH LAYER OF MARKETING INTERMEDIARIES THAT PERFORMS SOME WORK IN BRINGING THE PRODUCT AND ITS OWNERSHIP CLOSER TO THE FINAL BUYER. BOTH THE PRODUCER AND THE FINAL CONSUMER PERFORM SOME WORK, THEY ARE PART OF EVERY CHANNEL. TOPIC 2 CHANNEL BEHAVIOR AND ORGANIZATION CHANNEL BEHAVIOR – A MARKETING CHANNEL CONSISTS OF FIRMS THAT HAVE PARTNERED FOR THEIR COMMON GOOD. EACH CHANNEL MEMBERS DEPENDS ON THE OTHERS. CHANNEL CONFLICT – DISAGREEMENTS AMONG MARKETING CHANNEL MEMBERS ON GOALS, ROLES, AND REWARDS. TYPES OF CHANNEL CONFLICTS HORIZONTAL CONFLICTS – OCCURS AMONG FIRMS AT THE SAME LEVEL OF THE CHANNEL. VERTICAL CONFLICTS – CONFLICTS BETWEEN DIFFERENT LEVELS OF THE SAME CHANNEL, IS EVEN MORE COMMON. TYPES OF CHANNEL ORGANIZATION VERTICAL MARKETING SYSTEM (VMS) – CONSISTS OF PRODUCERS, WHOLESALERS, AND RETAILERS ACTING AS A UNIFIED SYSTEM. CONVENTIONAL MARKETING CHANNEL – CONSISTS OF PRODUCERS DIRECTLY TO WHOLESALER, DIRECTLY TO RETAILER, AND TO CONSUMER. MAJOR TYPES OF VERTICAL MARKETING SYSTEM CORPORATE VMS – INTEGRATES SUCCESSIVE STAGES OF PRODUCTION AND DISTRIBUTION UNDER SINGLE OWNERSHIP. CONTRACTUAL VMS – CONSISTS OF INDEPENDENT FIRMS AT DIFFERENT LEVELS OF PRODUCTION AND DISTRIBUTION WHO JOIN TOGETHER THROUGH CONTRACTS TO OBTAIN MORE ECONOMIES OR SALES IMPACT THAN EACH SHOULD ACHIEVE ALONE. FRANCHISE ORGANIZATION – THE MOST COMMON TYPE OF CONTRACTUAL RELATIONSHIP. o MANUFACTURER- SPONSORED RETAILER FRANCHISE SYSTEM o MANUFACTURER- SPONSORED WHOLESALER FRANCHISE SYSTEM o SERVICE- FIRM- SPONSORED RETAILER FRANCHISE SYSTEM ADMINISTERED VMS – LEADERSHIP IS ASSUMED NOT THROUGH COMMON OWNERSHIP OR CONTRACTUAL TIES BUT THROUGH THE SIZE AND POWER OF ONE OR A FEW DOMINANT CHANNEL MEMBRES. HORIZONTAL MARKETING SYSTEMS – IN WHICH TWO OR MORE COMPANIES AT ONE LEVEL JOIN TOGETHER TO FOLLOW A NEW MARKETING OPPORTUNITY. COMPANIES MIGHT JOIN FORCES WITH COMPETITORS OR NONCOMPETITORS. THEY MIGHT WORK WITH EACH OTHER ON A TEMPORARY OR PERMANENT BASIS. MULTI CHANNEL DISTRIBUTION SYSTEMS – OCCURS WHEN A SINGLE FIRM SETS UP TWO OR MORE MARKETING CHANNELS TO REACH ONE OR MORE CUSTOMER SEGMENTS. IT OFFER MANY ADVANTAGES TO COMPANIES FACING LARGE AND COMPLEX MARKET. CHANGING CHANNEL ORGANIZATIONS – CHANGES IN TECHNOLOGY AND THE EXPLOSIVE GROWTH OF DIRECT AND ONLINE MARKETING ARE HAVING A PROFOUND IMPACT ON THE NATURE AND DESIGN OF MARKETING CHANNELS. ONE MAJOR TREND IS TOWARD DISINTERMEDIATION. DISINTEMEDIATION- OCCURS WHEN PRODUCT OR SERVICE PRODUCERS CUT OUT INTERMEDIAREIES AND GO DIRECTLY TO FINAL BUYERS OR WHEN RADICALLY NEW TYPES OF CHANNEL INTERMEDIARIES DISPLACE TRADITIONAL ONES. TOPIC 3 CHANNEL DESIGN DECISIONS SETTING CHANEL OBJECTIVES, FACTORS THAT MAY INFLUENCE COMPANY’S CHANNEL OBJECTIVES THE NATURE OF THE COMPANY ITS PRODUCTS ITS MARKETING INTERMEDIARIES ITS COMPETITORS AND THE ENVIROMENT NUMBER OF MARKETING INTERMEDIARIES INTENSIVE DISTRIBUTION – STOCKING THE PRODUCT IN AS MANY OUTLETS AS POSSIBLE. EXCLUSIVE DISTRIBUTION – GIVING A LIMITED NUMBER OF DEALERS THE EXCLUSIVE RIGHT TO DISTRIBUTE THE COMPANY’S PRODUCT IN THEIR TERRITORIES. SELECTIVE DISTRIBUTION – THE USE OF MORE THAN ONE BUT FEWER THAN ALL THE INTERMEDIARIES WHO ARE WILLING TO CARRY THE COMPANY’S PRODUCTS. EVALUATING THE MAJOR ALTERNATIVES 1. ECONOMIC CRITERIA 2. CONTROL CRITERIA 3. ADAPTABILITY CRITERIA TOPIC 4 CHANNEL MANAGEMENT DECISIONS TOPIC 5 MARKETING LOGISTICS AND SUPPLY CHAIN MANAGEMENT MARKETING LOGISTICS or PHYSICAL DISTRIBUTION – INVOLVES PLANNING IMPLEMENT AND CONTROLLING THE PHYSICAL FLOW OF GOODS, SERVICES AND RELATED INFORMATION FROM POINTS OF ORIGIN TO POINTS OF CONSUMPTION TO MEET CUSTOMER REQUIREMENTS AT A PROFIT. NATURE AND IMPORTANCE OF MARKETING LOGISTICS MARKETING LOGISTICS – INVOLVES NOT ONLY OUTBOUND DISTRIBUTION (MOVING PRODUCTS FROM THE FACTORY TO RESELLERS AND ULTIMATELY TO CUSTOMERS) BUT ALSO INBOUND DISTRIBUTION (MOVING PRODUCTS AND MATERIALS FROM SUPPLIERS TO THE FACTORY) AND REVERSE DISTRIBUITION (MOVING BROKEN, UNWANTED OR EXCESS PRODUCTS RETURNED BY CONSUMERS OR RESELLERS) CUSTOMER-CENTERED LOGISTICS THINKING or SUPPLY CHAIN MANAGEMENT – MANAGING UPSTREAM AND DOWNSTREAM VALUE-ADDED FLOWS OF MATERIALS, FINAL GOODS AND RELATED INFORMATION AMONG SUPPLIERS, THE COMPANY, RESELLERS, AND FINAL CONSUMERS. GOAL OF MARKETING LOGISTICS– SHOULD BE TO PROVIDE A TARGETED LEVEL OF CUSTOMER SERVICE AT THE LEAST COAST. MAJOR LOGICTIS FUNCTIONS WAREHOUSING – STORE GOODS FOR MODERATE TO LONG PERIODS, DESIGNED TO RECEIVE GOODS FROM VARIOUS PLANTS AND SUPPLIERS, TAKE ORDERS, FILL THEM EFFICIENTLY AND DELIVER GOODS TO CUSTOMERS AS QUICKLY AS POSSIBLE. INVENTORY MANAGEMENT – JUST IN TIME LOGISTICS, PRODUCERS AND RETAILERS CARRY ONLY SMALL INVENTORIES OR PARTS OR MERCHANDISE, OFTEN ENOUGH FOR ONLY A FEW DAYS OF OPERATIONS. TRANSPORTATION – CHOICE OF TRANSPO CARRIERS AFFECT THE PRICING OF PRODUCTS, DELIVERY, PERFORMANCE, AND THE CONDITION OF GOODS WHEN THEY ARRIVE, ALL OF WHICH WILL AFFECT CUSTOMER SATISFACTION. LOGISTICTS INFORMATION MANAGEMENT – COMPANIES MANAGE THEIR SUPPLY CHAINS THROUGH INFORMATION. CHANNEL PARTNERS OFTEN LINK UP TO SHARE INFORMATION AND MAKE BETTER JOINT LOGISTICS DECISIONS. COMPANIES NEED SIMPLE, ACCESSIBLE, FAST AND ACCURATE PROCESSES FOR CAPTURING, PROCESSING, AND SHARING CHANNEL INFORMATION. INTEGRATED LOGISTICS MANAGEMENT – RECOGNIZES THAT PROVIDING BETTER CUSTOMER SERVICE AND TRIMMING DISTRIBUTION COSTS REQUIRE TEAMWORK, BOTH INSIDE AND COMPANY AMONG ALL THE MARKETING CHANNEL ORGANIZATIONS. CROSS-FUNCTIONAL TEAMWORK INSIDE THE COMPANY – THE GOAL OF INTEGRATED SUPPLY CHAIN MANAGEMENT IS TO HARMONIZE ALL OF THE COMPANY’S LOGISTICS DECISIONS. THIRD PARTY LOGISTICS (3PL) – AN INDEPENDENT LOGISTICS PROVIDER THAT PERFORMS ANY OR ALL OF THE FUNCTIONS REQUIRED TO GET A CLIENTS PRODUCT TO MARKET. ASSIGNMENT 1 EXPLAIN GARDENIA DISTRIBUTION SYSTEM 1. Primary Channel – Supermarkets and Grocery Stores Freshly baked breads of Gardenia are provided to supermarkets and grocery stores, primarily the channel they are dealing with. In this channel, the Company, Gardenia, strictly follows the daily supply mechanism for the safety of freshness so that customers are assured of being offered fresh bread all the time. This changeover of stocks every day is an integral part of distribution policy in Gardenia's, which offers only the best products at the consumer's table. Innovation in Product Display: Gardenia came up with a packaging where the breads are displayed upright in supermarkets and grocery stores, giving more visibility to the products, increasing the number of customers, and making them different from their competitors. The multi-channel distribution: This is their main indirect channel where they get mass-market consumers through substantial retail networks. 2. Secondary Channels – Small Variety Stores (Sari-Sari Store) Gardenia expanded into smaller convenience stores, often called in the Philippines "sari-sari stores," and other smaller retail outlets. Such stores serve a customer that would like to buy in smaller quantities or is simply accustomed to shopping in neighborhood stores and not in larger supermarkets. The penetration of this segment also helped Gardenia reach different consumer groups and expand coverage to smaller, even more localized markets. Variety stores, especially the smaller ones, offer convenience and accessibility in residential areas-an added support that augments the more formal supermarket channel. Multi-channel distribution concept: This is another indirect channel but for a different market segment – customers who may not visit large grocery chains but prefer localized shopping experiences. By doing this, Gardenia makes sure that its product is available in every corner of the market. 3. Direct Channels – House-to-House Selling and Institutional Sales Direct channels adopted by Gardenia include door-to-door sales as well as institutional sales, say in schools, offices, or even cafeterias, so that a niche customer base not always shopping at supermarkets or even convenience stores can be tapped. This channel would also enable them to reach consumers who have barriers to accessing supermarkets or who will rather shop from home, at a more personal level. If Gardenia sells directly to consumers, it ensures that they get close to their customers, hence freshness and satisfaction for the customer. Multi-channel distribution concept: The direct-to-consumer channel is similar to that of direct sales in a multi-channel system, where the company bypasses intermediaries and touches base with the end consumer. 4. Geographic Expansion and Market Segmentation Gardenia's distribution strategy also conformed to a sequential market penetration approach, which is the core of multi-channel distribution systems. They geographically extended the business from the provincial markets, from the urban market of Metro Manila to the other geographical areas - Luzon and Vis-Min regions. The picture describes the "jar-full" concept of Gardenia, where they penetratingly enteRed one distribution channel (such as supermarkets) and continued to another – like smaller stores, house- to-house, or new geographies. This segmented and phased way made them dominate different channels in a strategic manner. Multi-channel distribution concept: It portrays the segmented manner in which they focused on one specific channel or a particular geographic market thoroughly, thereby maximizing market share, and then spread to new channels or geographies. 5. Logistics and Delivery Logistics and delivery are one of the key aspects of Gardenia's successful distribution: it has a speed and an efficiency before getting to the various details which focus greatly on logistics. For instance, their mechanism makes sure that stale bread is withdrawn and replaced with new bread daily, ensuring that all products remain fresh within all channels. It is essential for perishable products such as bread, and Gardenia's organizational system has been established for the refilling of all their distribution channels, whether it is the supermarket, variety stores, or direct selling. What this it also depicts is that Gardenia itself is agile enough to be able to respond to a changing market in order to satisfy its demand-a vital component of an effective multi-channel distribution. In conclusion, Gardenia uses a multichannel distribution system effectively. They combine all the modern channels and get to the consumer directly with supermarkets, convenience stores, house- to-house sales, and institutional channels. Maintaining daily logistics, innovative product display and segmented market penetration resonates with the principles of a multi-channel distribution strategy. This has allowed them to dominate the bread market as they offer their products through a wide range of retail and direct channels to make sure they capture every possible customer segment. Assignment 2 Instructions Describe the three "I's" that helped in Mr. Cruel's Successful career. Describe the strategy in launching challenger brands. Discuss product life cycle. How should a company support each product in the different phases? 1. The Three "I's That Have Helped the Success of a Career of Mr. Cruel Interact: This is most critical. Interacting with a wider team than just your own departments helps leaders solve complex problems together and opens opportunities by widening the circle of influence. Inspire: "Mr. Cruel really drove the point home of inspiring people within an organization. Encourage and motivate key players and employees you're closer in power-to the bottom line; then, by extension, and organically, brand ambassadors are going to come from inside, and the brand will grow.". Innovation: Innovation is not about bringing something new; the unnecessary elements also should come that do not add any value. According to Mr. Cruel, the inspiration for innovation needed in bringing innovation to the table is to inspire people who are against the conventional way of doing business. 2. Launch Strategy for Challenger Brands According to Mr. Cruel, to launch a challenger brand, you need to know what is going against your business on much deeper levels, internal ones, as well as the external. He emphasizes entrepreneurial intensity, organizational strength, and the focus on the right set of problems. For example, the case history of FMCG and strategic focus on core strategies such as C2 Green Tea and Vitamilk Soya Drink are illustrations of how a new brand can flourish in the marketplace based on strengths for differentiation. 3. Product Life Cycle: The products, in the successive phases of the product life cycle-which includes introduction, growth, maturity, and decline-should be accompanied by competitive firms: Introduction: Invest in awareness and demand creation for the product. Right communication and consumer insight understanding mean success. Growth: Improve the offer, fine-tune marketing strategies on early consumer feedback to build deeper market penetration Maturity: Stand still in market share with differentials, cost optimizations and continued product as well as marketing relevance. Acceptance: With this, companies are now faced with the choice of embracing innovations that will propel the life cycle of the product or strategic withdrawal from the market and shifting the resources to new opportunities.