distribution decision

distribution decision
MT1: Distribution Channels Case
Choose an organization: Describe Distribution Channels, Benefits/Costs of intermediaries

Choose a firm that produces tangible products (NOT a retailer) that are ultimately sold to final consumers and is part of a distribution channel involving at least one other independent organization as an intermediary and uses at least two different sales channels (e.g., direct sales, retail).

1. Describe the organization, its target market, its positioning and its current competitive situation. Also discuss the products that it produces (NOTE: If the company is very large and produces many diverse product lines, narrow focus to just one division or product line of that company).

2. Classify and describe the multi-channel distribution system for the product line and assess the appropriateness of its design in relation to its desired service output levels (e.g., lot size, waiting time, spatial convenience,…).

3. Discuss how the organization benefits by using one or more intermediaries.

4. Describe the costs and potential risks that the firm must encompass by using these intermediaries. Explain how the distribution system does or could operate as either a vertical (VMS) or horizontal (HMS) marketing system and the benefits associated with that system strategy, or why a VMS or HMS doesn’t make sense for the channel.

Please give a great deal of consideration to your selection of the organization and the product that will be used in your case. Your selection must meet the following criteria:

* The organization should produce a physical product that is eventually sold to final consumers.

* The organization must be part of a distribution system that includes a minimum of one intermediary.

The organization must sell its products through two or more channels (e.g., retail, online sales, telephone sales, sales force).

MT 2: Industrial Distribution Channel Case
Choose an organization that creates products that are sold to other businesses and uses at least two different sales channels (the organization may or may not use any intermediaries).
1. Briefly describe the organization, its target market, its competitive situation, and the products that it produces (NOTE: If the company is very large and produces many diverse product lines, you should narrow your focus to just one division or product line of that company).
2. Classify and describe the multi-channel distribution system for the product line and assess the appropriateness of its design in relation to its desired service output levels (e.g., lot size, waiting time, spatial convenience).
3. Discuss the role that business-to-business e-Commerce plays in the marketing channel associated with the selected organization (e.g., eCommerce involving business-to-business transactions).
4. Explain how the distribution system does or could operate as an integrated logistics system (i.e., use of information technology to accomplish and/or coordinate such logistical processes as ordering, warehousing, inventory, shipping) and the benefits associated with that system strategy, or why a ILS doesn’t make sense for the organization.
Please give a great deal of consideration to your selection of the organization and the product that will be used in your case. Your selection must meet the following criteria:

• The organization should produce physical product that is eventually sold to businesses (if it sells to both businesses and consumers, just concentrate on the business-to-business channel).

• The organization must sell its products through two or more channels (e.g., online sales, telephone sales, sales force).

• The organization must make use of eCommerce in one way or another.

MT3: Internal marketing
How does the concept of internal marketing fit into a holistic marketing approach? Explain.
Share an example of a recent research article from a leading marketing journal that deals with the topic of internal marketing.

Channel Margins- Optional Exercise
This exercise is based on the Channel Margins learning tool from the Harvard Business School. The purpose of this tool is to determine how margins are allocated among channels and what the implications are for overall strategy.

http://hbsp.harvard.edu/multimedia/flashtools/channelmargins/index.html

Read the introduction and the conceptual overview of channel margins (note: there is a scroll bar on those pages – it’s easy to miss it). You are already familiar with these main concepts, as they are discussed in detail in Kotler-Keller.

Review the sample problem 1 of ZAP Company and how ZAP product moves through various channels. Help Denis to re-evaluate his pricing and distribution based on the feedback from retailer SuperBuy.

Click on Tool. Since we know how much a consumer pays for ZAP – change the input to Customer.

a) In the tool fill in the numbers from the case. Note that the case provides Customer $$, and all the margins. The tool will automatically calculate unit cost for the manufacturer and price paid by each of the channel member. Report Unit Cost for manufacturer and explain what that means.
b) Now calculate selling price for the manufacturer if Denis in fact changes the price to 22.99 without changing the % margins for any of his channels.
c) What implications will this move have on ZAP’s cost strategy? What alternative would ZAP have if it can’t change the cost strategy?

Personal Application

Read the introduction and the conceptual overview of channel margins (note: there is a scroll bar on those pages – it’s easy to miss it). You are already familiar with these main concepts, as they are discussed in detail in Kotler-Keller. How could your organization use this tool? Should it?
What kinds of improvements, if any, could you expect from using this tool?
How do other Main Topics discussed this week apply to your organization?
Multimedia – Hasbro

This week’s multimedia presentation is on entertainment industry giant Hasbro.

Hasbro is a worldwide leader in entertainment products and services, such as GI Joe, Monopoly, and the Easy Bake Oven. It is a $3 billion company with brands in 100 countries and it launches 1,000 new products each year. Even with big brands and successful products, Hasbro knows that if its marketing and distribution strategies are not executed correctly, the products will fail. World-class logistics and an efficient supply chain are critical for Hasbro to remain competitive and work with powerful retail stores.

While you are watching this case, consider: How has Hasbro adapted to changes in buying patterns through channels of distribution?

 
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