Week 11- Distribution and Products

Week 11

Tuesday

     On Tuesday, we talked a lot about supply chains and distribution channels. We talked about Fresh Patch again and discussed their supply chain. The distribution chain is different than the supply chain. The supply chain is the process by which you gain the supplies for your product. The distribution chain also includes the delivery of the product to the consumer. The distribution chain for Fresh Patch starts with an order on their website. Next Andrew receives that order. He then places an order with the producer of the grass in Ventura, California. The producer then ships the product to the consumer. By implementing an east coast distribution center, Andrew could shift his costs from shipping to the distribution center. On Tuesday we also talked about offshoring and nearshoring from chapter 13. Offshoring is the outsourcing of a business process from one country to another for the purpose of gaining economic advantage. Nearshoring is the transfer of an offshored activity from a distant to a nearby country. Both of these tactics are helpful to better the logistics of a company. Logistics is one of the most important aspects of a distribution channel and a successful company. One company that has succeeded because of good logistics is Walmart. Logistics is also a reason Amazon is so successful. It is easier for companies to sell their product through Amazon than it is through their own website. Amazon takes care of the shipping aspect of their business.

Thursday

     On Thursday we talked a lot about product types and where they can be found. We discussed how a Rolex or a Jaguar is a specialty product, a television or a suit is a shopping product, Twinkies are a convenience product, and a septic tank service is an unsought product. Specialty products are a particular item for which consumer search extensively and are very reluctant to accept substitutes. Shopping products are products that require comparison shopping because its usually more expensive than a convenience product. A convenience product is a cheap product that requires little shopping effort. An unsought product is a product that is unknown to the potential buyer or a known product they are not actively seeking. On Thursday we also discussed the intensity of distributions. Intensive includes products that are available everywhere. Selective includes products that are available in select places, such as televisions and suits. Exclusive includes products such as a the Rolex or Jaguar that are only available in very few stores. We also discussed the communication process that is mentioned in Chapter 15. An example of this process is shown in the model above. The sender would be a marketing manager or advertising manager. This advertisement is an encoded message. The channel for this message is media, salespeople, or stores. The decoding of the message is how the receiver perceives the message. The receiver is a customer, viewer, or client. Noise is something that affects the message. This could be something such as other advertisements or news articles that distract from the message. The feedback channel includes market research, sales results, and changes in market shares. This is then adjusted, recycled, and done again.

Smart Project

     For our Smart Project we are currently in the process of collecting data. We will then begin compiling the data as guided from the handout. Our discussions this week can related to our project in some ways. Our product, if we sold it to consumers would likely be a specialty product. It is not an item that is related to many others and so consumers who buy it would be looking specifically for it and not something else. Logistics would not really apply to our product. Our product would most likely be sold to businesses rather than consumers. We are having a joint meeting for our Smart Projects next Thursday, the 13th.