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MKTSLP3: Distribution

In SLP03 for your chosen organization, you will discuss its distribution systems. Be sure to refer to the taught materials thereby illustrating your learning.

In that regard, using the issues as subtitles in your paper, please address the following issues, :

12) Describe how products get from manufacturer through the “DISTRIBUTION channel” to the final consumer, if your organization manufactures a product or products.

13) Describe LOGISTICS or how products are transported (land, sea, air, etc.)– or even how component parts are obtained for manufacturing, if your organization manufactures a product or products.

14) Describe the retail PHYSICAL FACILITY to including its location, its exterior and interior appearance, and related “place” issues such as the decision-rules used to decide where products are located in the facility, if your organization is a retailer.

15) With regard to the product(s) (good(s) and/or service(s)) your organization offers, does your organization have a COMPETITIVE ADVANTAGE with its DISTRIBUTION channels or issues? Your answer should be a “Yes” or a “No” followed by your defense of why you chose Yes or No. Be sure to include references to the background materials to support your response.

Please remember: All SLP discussions about competitive advantage must be specific, that is, directed toward each competitor. A simplistic example is that Burger King may have competitive advantage over KFC in terms of location, but it does not have competitive advantage over McDonald’s. Of course, you would elaborate more and explain why your organization does or does not have competitive advantage in distribution/place relative to each particular competitor.

P&G bought Gillette in 2005. As an example of competitive advantage, consider where P&G distributes its products (drugstores, supermarkets, mom and pop stores, and convenience stores). Now consider where Gillette sells its products (drugstores, supermarkets, mom and pop stores, and convenience stores). At least from a channels perspective, it made a lot of sense for P&G to purchase Gillette.

In addressing the questions, at a minimum use DISTRIBUTION STRATEGY as your heading and use the CAPITALIZED and BOLD words in the Qs as subheadings.

Organization: McDonalds – Retail Food Giant Chain

DISTRIBUTION STRATEGY:

Ans. 12: DISTRIBUTION CHANNELS: In any organization, physical distribution or logistics management plays a very important role which starts from the manufacturer and ends towards the end user after passing through the chain of value added processes. While meeting up to the distribution of products McDonalds must be able to facilitate selling by being physically nearer to the customers. The firm must break the bulk from the manufacturer’s site and cater to the minute requirements of consumers by assembling products into variety of ranges to meet the needs of the buyers, match and strike a balance between segments of supply and demand. The logistics deal with handling the following parts of the physical distribution: Sub distribution which includes reselling, re-transport, handling of materials, accounting procedures while Stock holding comprises of providing and allocating warehouse space, storing the inventory and able to handle risks (Ramaswamy, V. et al, 2002).

            Speaking about the whole supply chain management the primary support activities start from inbound logistics where in entry of raw material takes place into the production unit for manufacturing and later it enters the outbound logistics which includes warehouses and transportation where by the marketing of the products and services takes place along with the sales and support activities which ultimately help the goods to be delivered to the end user (Kotler, 2005).

Ans. 13: LOGISTICS: Transportation plays an important role as it determines and affects the product pricing, delivery performance of on-time transportation, and the status of the goods which directly or indirectly will have an effect on customer satisfaction. N While shipping the goods to the warehouses or dealers or the customers the firm can select one of the modes of transportation viz. rail, trucks, road, air, water and gas

 depending on the nature of the product or service. The company will have to judge the modes based on certain parameters or criteria’s based on the speed of delivery, cost of transportation, reliability of the mode by looking into the nature of the product and the urgency required by the customer, flexibility at which each one would provide, and the kind of products the different modes would handle which could be either bulky, bulky and low vale, high value, perishable goods etc. It may also be seen that companies will try to adopt economies of scale by combining two or more transportation modes to maximize the returns in terms of cost, the concept known as containerization. Transportation has certain implications on other aspects of the supply chain management which are warehousing and inventory.

Ans. 14: RETAIL PHYSICAL ACTIVITY:

Location: For any retail store to be set up it is very much important to understand the location advantage of the firm which is a must to provide convenience to the end users. Selection of the location site is necessary for satisfying the consumer choices, for providing competitive advantage over other retailers, for identifying the recent considerations on social and structural trends in the surrounding environment.

Store Layout: A store in a way is also considered as a product because it is the interior and the exterior look of the store which will           attract maximum customers and thus will enhance the efficiency of the store. It should be designed in a manner by which it facilitates and increases the footfalls and movement of the consumers to exhibit better and greater store experience and to ask or the best presentation and display of the merchandise. The usage of space allocated, color, walls, floor coverings, lighting, ambience, aesthetics, and music are some of the important parameters that can be controlled by the retailer which will lead to positive image and impact on the retailer. In order to provide a productive layout clear use of styled signages needs to be made there by allowing functional areas like changing rooms, restaurants, payment counters etc. are vital in this study of layout.

Place: The decisions on place are useful in understanding the location area which allows decisions on parking area, final accessibility, the investment that is required to be met, and the final property assets of the company are some of the issues which need to be analyzed while assessing the retail location strategies and the decisions related to it (Gilbert, D. 2003).

Ans. 15: COMPETITIVE ADVANTAGE:

            Yes, McDonalds has a competitive advantage over its competitor KFC. Studying the Competitive Advantages of KFC and McDonalds, the biggest food giant chains in the retail industry, their environments cannot be analyzed in isolation as a result of which what makes the one competitor different from the other is very much important task to be looked upon. McDonalds has a better edge over KFC because of their uniqueness in the areas of market leadership, image building, buyer-supplier relationships and financial resources there by involving the customers into the value culture of their fast food chain. McDonalds follow a system of providing Value, Quality, Cleanliness, Speed and Customer Care. Although both the giants follow the localization aspect considering the local customs and believes of the local customers, their innovative techniques and health related product categories made a difference to the masses. A slight shift has been taken up with regards to their concentration on image and brand building towards maintenance and R&D research approaches. Unlike KFC, McDonalds again focuses and concentrates on “Value Menu” i.e. Value for Money. Also they are known for their areas of providing freebies, home delivery system and allocating ambience and convenience to the store format which is the reason for their success in the food industry. Their distribution system has been so powerful that they have adopted a penetration system by enhancing on the concept of price competitiveness.

References:

China Today (2004). “KFC and McDonald’s ¡ª a model of blended culture.” Retrieved on April 10, 2008, from China Today Web site: http://www.chinadaily.com.cn/english/doc/2004-06/01/content_335488.htm

Gilbert, D. (2003). “Retail Marketing Management”  Prentice Education

Kotler (2005), “Marketing Management”, the Millenium Edition, Tenth Ed, Prentice-Hall India, Delhi.

Read Between the P’s (2006). ‘Rice Burgers from McDonald’s – Glocal Initiatives!” Retrieved on April 10, 2008, from Read Between the P’s Web site: http://readbetweentheps.blogspot.com/2006/01/rice-burgers-from-mcdonalds-glocal.html

Ramaswamy VS, et al (2002). “Marketing Management – Planning, Implementation ; Control” Third Ed, Macmillan Business Books, Delhi.

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