Week 11

This week, we focused on Distribution Channels, while discussing supply chains, as well as different types of products. 


Fresh Patch


We began class by discussing Fresh Patch in terms of a Specialty Item.  Barbara and Mark want to turn Andrew Feld's product into a product sold in retail.  As a specialty product, we can expect that Fresh Patch will be sold in pet supply stores like Petco and PetSmart, as well as Home Improvement stores like Home Depot and Lowes.

Distributional Channels and Supply Chains

Supply Channels details where the product comes.  This includes receiving from raw materials and manufacturing the actual product. Distribution Channels, on the other hand, are a set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer.  As businesses expand and become larger, the distribution channel becomes more complex. Every time part of this channel handles a product, it costs the business money.  These intermediaries that the product goes through until it reaches the product cost money, but if dealt with efficiently, can drive down costs of the business.  Someone has to do jobs like transport and receiving products, but Distribution Channels are places where a business can generate a lot of savings.  However, costs can only be driven down if and only if the business is efficient in doing so.

Three fundamental functions of a Distribution Channel:

1. Logistical
Logistics is how businesses transport their products, either to other businesses,

or to retailers and customers.  Examples of logistical operations include UPS, Amazon, FedEx, and Wal-Mart. Amazon, for example, is a platform for small businesses and other people to deliver their products to customers.  They may use Amazon because it is well-known, trusted, and easier to get their product out there than if they were to put it up on their personal website.

2. Facilitating
Facilitating involves making efficient relationships with channel members.  Channel members are those in the marketing channel who negotiate with each other, buy and sell products, and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer into the hands of the final consumer. Agents and brokers facilitate the sales of products downstream by representing the interests of wholesalers, manufacturers, and retailers to potential customers.


3. Transactional
Activities involving transactions involve banking responsibilities. This includes actions like using a company credit card or obtaining a loan.



Distribution Intensity and Product Type(Review of classifying products)
Different product types have different distribution types.

Twinkies: Twinkies are a convenience product, as they are available most anywhere and identify with routine response behavior.  Their distribution type is intensive, because Twinkies are made to be available almost everywhere, including gas stations, vending machines, and grocery stores.

Suits/Televisions: Suits and televisions are shopping products.  When you are buying these products, you often compare the prices between similar brands.  There are different options, and you can accept their substitutes, but they are usually somewhat expensive. These are selective products.  they are available in different stores, like department stores, but are not as readily available as Twinkies are.


Rolex Watch/Jaguar Car: These are specialty products as they are in a narrow market and have few substitutes.  These might be found at a specialty jeweler and a luxury car dealership, not at a Macy's and mom and pop car dealer.