Reflection: Week 11

Tuesday: 

In Tuesday's class, we continued our discussion of Fresh Patch. We started the class by differentiating between a supply chain and a distribution channel. A Supply chain is the connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function. Put simply, the supply chain is where a product comes from such as obtaining raw materials and manufacturing the product. After defining supply chain, we moved into a discussion of what the term "logistics" means. To help us define the term, we named examples of companies that have mastered logistics. Some of those companies are:

-UPS
-FedEx

Amazon acts as a selling platform for other businesses

-Amazon

We then defined distribution channel and talked about how it differs from a supply chain. A distribution channel is a set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumer. It is important to analyze the distribution center of a business because every time the business handles the product, it costs them money. For example, we can infer that Andrew Feld, creator of Fresh Patch, operates under drop shipping in which the grass manufacturer directly ships the product to the consumer that placed the order. If Andrew were to establish an East Cost distribution center, he would be shifting the cost of packaging the product from cost of goods sold to operating expenses. The deciding factor in whether or not to establish an East Coast distribution center should be how much money, if any, Andrew can save by packaging the product himself.

Something else we discussed in Tuesday's class that I found interesting is how Fresh Patch's distribution channel will change now that sharks Barbara and Mark have made Andrew investment offers. We assumed that Fresh Patch would be sold in category-killer retailers like Pet Smart and Pet Co., which only carry products related to pets. Barbara most likely wants to ship Fresh Patch to Pet Smart or Pet Co's distribution center because they will/ can incur the distribution costs. As mentioned before, Andrew wants to handle his product as little as possible because each time he or his company handles the product, it costs him money.

Thursday: 

3 main functions of a distribution channel: why should a business use one? 

1. Logistics: Logistical operations entail how a business transports its products to retailers and customers. As discussed earlier in this blog post, some companies that use industry best-practice of logistical operations include UPS, FedEx, and Amazon.

2. Facilitating: Distribution channels make for efficient relationships with suppliers. Facilitating activities help make products available in retailers when consumers want them available.

3. Transactional: Transactional activities decide who will take on the responsibility of doing the business' banking.

In all, distribution channels are a very important marketing concept because they offer companies the opportunity to save a lot of money!

Distribution Intensity

After reviewing the three main functions of distribution channels, we moved into a review of classifying products by product type. Using pictures displayed in a PowerPoint presentation, we worked in small groups to classify the following products:
Specialty Product: Rolex watch, Jaguar automobile
Unsought: septic service
Convenience: Twinkies
Shopping: everyday suit, SMART TV

It was necessary to review product types because product type directly relates to the type of distribution that product will have. There are three main distribution intensities. They are:

When Twinkies went out of business, they became a dead product.

Intensive: the product is available anywhere and everywhere. Twinkies, a convenience product, are distributed by this means.

Selective: Selective distribution means that the product is available in a variety of stores. The product is easy to find, but consumers must be willing to take time to shop for it. The everyday suit and SMART TV are examples of products that are selectively distributed.

There are no Rolex stores in Western Massachusetts because that is not where their target customer lives.

Exclusive: Exclusive distribution means that few dealers within a selected area are allowed to distribute a particular product. Rolex watches and Jaguar brand automobiles are good examples of products that are distributed exclusively. High end Rolex watches cannot be found at the same store as your everyday suit. If Rolex watches were available everywhere, it would tarnish the name of the brand.