Exam 15: Distributing Products

Even though all of the hardware stores that operate under the name of Hardie's Hardware are independently owned and managed, they have signed an agreement to participate in chain promotions, and cooperate as a unified system of stores. The Hardie's Hardware stores are using a distribution system known as a wholesaler-sponsored chain.

The basic transportation service criteria are speed, cost, dependability, flexibility, frequency, and reach.

Mardelay Industries has discovered a defect in one of its products that may result in injury to users. The company believes it must quickly develop and implement a recall program. It is likely that Mardelay soon will be placing a great deal of emphasis on:

With the current emphasis on product development, pricing, branding, and promotion, the physical distribution of materials and goods is no longer a major concern of marketing.

Childress Manufacturing wants to ship a large quantity of its goods across the country. They have contacted Grunwell Shipping, Inc. to find out what the shipment would cost. Grunwell has shown Childress how a combination of barges, trains, and trucks could be used to complete the shipment at low cost. Grunwell's strategy is an example of intermodal shipping.

Agents are marketing intermediaries who take title to the goods they distribute and provide credit to customers who need it.

Mini-Case "We've got a number of important issues to discuss today," began Dee Stribyute as she opened the weekly marketing manager's meeting for Lite Bite Foods. Lite Bite is a producer of low fat, low calorie snack foods. The other managers attending the meeting were her two top assistants, Mark Etter and Rhea Taylor. "First, sales were hurt last year when we had to recall our almond chocolate bars because of concerns about contaminated ingredients. We've got our work cut out for us to recover from that setback. Many stores quit carrying our products, and even the ones that continued to do so put less emphasis on displaying and promoting them. We've got to get our products into as many stores as possible. Consumers shouldn't have to go all over town trying to find our snacks. We also need to make sure that our products are displayed and promoted in a way that attracts attention." Dee looked at her assistants, and saw that they seemed ready to make some proposals. However, she decided to get another important issue out on the table before stopping to discuss solutions, so she continued with her comments. "The other big concern is the cost of moving our goods. Distribution costs are a major part of the overall cost of selling our goods. What can we do to make the flow of products from our kitchens to our ultimate consumers more efficient?" Having laid out her concerns, Dee sat down at the head of the table, saying to her assistants, "O.K. guys, I'm ready for suggestions." -Currently, Lite Bite uses a lot of intermediaries to help distribute its products. Collectively, the organizations that participate in getting finished goods from Lite Brite to the ultimate consumers of its products are all part of the:

Water transportation is the least expensive way to send goods overseas.

A freight forwarder breaks one large shipment into multiple small shipments so that it can be transported by trucks or aircraft with limited cargo capacities.

Water transportation has benefits and drawbacks; for example it is inexpensive but slow.

Direct selling is a distribution strategy that makes extensive use of the Internet and telephone.

Exclusive distribution is the use of only one retail outlet in a given geographic area.

Railroads are an energy-efficient mode of transporting many types of goods.

A distribution strategy that puts the product into as many retail outlets as possible is known as an intensive distributive strategy.

Marketers normally provide form, time, place, information and service utility, but they are seldom involved in providing possession utility.

Traditional retailers can stay competitive with online retailers by being part of a unified system of distribution.

Producers of shopping goods such as furniture, appliances, and clothing usually rely on an exclusive distribution strategy.

Many firms that want to use an intensive distribution strategy would find vending machines an attractive method of selling their goods.

An effective channel of distribution does more than simply ensure that goods are transported efficiently from producer to buyer.

Hi! Notes Card Shops has been approached by Novel Teas, a producer of herbal teas and exotic spices. Novel Teas wants to sell its products in the Hi! Notes stores under an administered distribution system. If Hi! Notes accepts Novel Teas proposal, it will perform many marketing services for the tea maker in exchange for a flat fee.