- Draw an
overview of the distribution channels for your product. Describe the
channels in terms of complexity and distance.
From what I could find out about Frito-Lay, and thus,
by extension, Doritos’ distribution channels; it seems they have three: Direct
store delivery, customer warehouse and third-party distributor networks. The
first one is short indirect, the second and third one are long indirect. (marketrealist, 2016) (PepsiCo, 2016)
Under the first system, they deliver products directly
to retail stores, which means they do all of the distributing work themselves.
The second system delivers the product from the manufacturing plants and
warehouses to customer warehouses and retail stores. The last of the three
systems distributes the products to restaurants, businesses, schools and
stadiums, which they do through third-party food service, vending distributors
and operators.
- Describe
which distribution functions are fulfilled through the different channel
members.
In the first system, they do everything themselves, so
all of the functions are filled by Doritos themselves except for the last part
of the journey, which is left up to the retail stores. Doritos produces the
product, transports it to the stores and after that it is up to the stores to
sell the product.
In the second system, Doritos delivers the products to
customer warehouses which means after that it is up to said warehouses to get
the product to the retail stores. So, with this system all of the logistical
functions are for the warehouses. They must sort it, allocate it and of course
transport the product to its final destination before it reaches the consumer;
the retail stores.
And with the last system it is the third-party
distributors which have to do the things that the customer warehouses took in
the second system. There are many third-party’s which they use though, so small
things may change depending on which kind of party it is.
Though I do feel like you cannot simply say which
functions are fulfilled because, some commercial functions such as promotion
will always be done by Doritos themselves, but other functions such as
assorting can be done by the entrusted third-parties. And sadly, from what I
could gather on the distribution that Frito-Lay uses, I couldn’t specifically
figure out which third-party companies they actually use. So, I am unable to
tell you exactly which of the third-party companies does what.
Nevertheless, I wish to give a general picture. The
first system I won’t discuss, since Doritos do everything themselves. But for
the second and third system I will endeavour to give a general picture. With
both systems, most of the financial functions lie with Doritos, most of the
logistic functions lie with the customer warehouses and third-parties and
lastly most of the commercial functions lie with the retailers.
- How can
your product’s image be influenced by the retail concept in which it is
sold? Clarify your answer!
Well, since retailing strategies are made to offer its
products and services in ways to optimize the customer satisfaction, I shall
assume it can both improve the customers image of your product, but if executed
badly it may also hurt the image they have.
Allow me to clarify. If, for instance, a retailer
makes a mistake when working on the customer orientation segment of the
retailing concept, like he misjudges the needs of the customer, the entire plan
would fall apart. the customer would, in this case, get something completed
unwanted, which they might consider strange. This, then, would hurt the image
of a certain product. If they do it properly, however, and give the customers
what they want, said customers will be positively ecstatic, which is good for
the product/company.
- Which
distribution strategy has been chosen for your product?
I feel like I’ve answered this already in the previous
questions, so I suppose I’ve made a mistake somewhere. I suppose, then, that I
will give an overview of what I have said previously.
Doritos uses three distribution strategies which are
the following:
1. Direct store
delivery
2. Customer
warehouse
3. Third-party
distributors
The first one is short indirect, the second and third
one are both long indirect. Doritos never uses the direct strategy because they
don’t own any stores, and so cannot reach their consumer directly.
Bibliography
marketrealist. (2016, December 6). PepsiCo: A
company overview. Retrieved from http://marketrealist.com:
http://marketrealist.com/2014/12/pepsicos-three-channel-distribution-network/
PepsiCo. (2016, December 7). PepsiCo 2015 annual report. Retrieved
from http://www.pepsico.com:
http://www.pepsico.com/docs/album/annual-reports/pepsico-2015-annual-report_final_s57dqszgmy22ggn.pdf?sfvrsn=0
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