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INTERNET EXERCISES
Chapter 15: Channel and Distribution Strategy
Exercise 1 – Distribution is the Hidden Aspect of
Marketing
Exercise 2 – Small Retailers Need Wholesalers
Exercise 1 – Distribution is the Hidden Aspect
of Marketing
Vignette: Foodservice distributors are wholesale companies
who receive products like pork, prunes, carrots, pizza, and pie filling
from manufacturer/producers, warehouse these products, and then accept
and deliver orders to restaurants and other institutions. They help get
the product from the producer to the intended consumer. This activity
is fundamental to meeting customer needs.
Featured URL:
www.flanagan.ca
Achieving Distribution is Essential to Implementing Marketing
Strategy
Flanagan Foodservice Inc. in Kitchener, Ontario stocks about 12,000 products
in 160,000 square feet of warehouse space. It is a $130-million per year
business. Dan Flanagan, the president of the company, says that “A
restaurant isn’t about to get delivery from, say, Heinz, and another
from a meat producer and another from a vegetable source. We consolidate.
We bring it all in and then ship whatever the restaurant wants in one
big order.” Foodservice distribution is a very demanding and very
service-oriented business because the companies in this industry must
deal with both suppliers and customers, and must make everything work
to the benefit of both. From the standpoint of food producers, foodservice
distributors are one of the key means available to them of getting their
products into the hands of their intended consumers.
Activity
-
Tour the featured Web site for Flanagan Foodservice Inc. Read the
“Company Profile”, and note the products it carries (under
“Quality Selection”) and the areas it services (under
“Service Areas”).
-
Review Figure 15.3 in the text. Based on the information provided
above and on the Web site, which of the 10 alternative distribution
channels can Flanagan be a member of? Which of these alternative distribution
channels is likely used by the producers of the meat products that
Flanagan carries?
-
Looking at Figure 15.6 in the text, which of the seven possible wholesaling
functions is it likely that Flanagan performs for the producers of
the meat products that Flanagan carries?
-
Flanagan Foodservice Inc. probably takes title to the products it
carries and thus should be classified as a merchant wholesaler. Looking
at Table 15.3 in the text, and given the information provided in the
Web site about its delivery system and truck fleet, which type of
merchant wholesaler does Flanagan appear to be?
Flanagan is an independently owned and operated business. If it were
to become part of a vertical marketing system, which type of VMS could
it be part of: corporate, administered, or contractual?
Resources
Companies that specialize in helping firms optimize their channel
management:
Blast Radius: –
a multinational consulting firm that “delivers high-impact solutions
for automating marketing, sales, and customer service” using Internet
technologies
CHANNELCORP: – a Vancouver-based consulting
company that “specializes in assisting computer and telecommunications
hardware, software and peripherals vendors to transform their product
and service distribution channels into a substantial source of competitive
advantage”
McKinsey & Company:
– a well-established North American marketing consulting firm; this
portion of the McKinsey Web site focuses on sales and channel management
issues
Exercise 2 – Small Retailers Need Wholesalers
Featured URL: www.macdonaldsconsolidated.com
Small Retailers and Big Wholesalers Need Each Other
Macdonalds Consolidated is a wholesale grocery distribution firm with
offices in Calgary, Edmonton, Vancouver, and Winnipeg. It is a wholly
owned subsidiary of Safeway Foods, a major food chain in Western Canada.
However, it not only distributes food and nonfood products to all of Safeway’s
stores, it also deals with independent food retailers in its coverage
territory, and seeks to attract as many of these clients as it can to
broaden its business base and better ensure its long-term business survival.
Activity
-
Tour the featured Web site for Macdonalds Consolidated. Which of
the seven possible wholesaling functions listed in Figure 15.6 does
it appear that it will perform for its independent retail clients?
- Look at the “Programs” portion of this Web site and assess
the marketing support that Macdonalds is offering to its independent
retailers. Would you recommend improving this support? If so, how?
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